Real Time Systems Inc

question 113

Multiple Choice

Real Time Systems Inc.is considering the development of one of two mutually exclusive new computer models.Each will require a net investment of $5,000.The cash flow figures for each project are shown below: Model B, which will use a new type of laser disk drive, is considered a high-risk project, while Model A is of average risk.Real Time adds 2 percentage points to arrive at a risk-adjusted discount rate when evaluating a high-risk project.The rate used for average risk projects is 12 percent.Which of the following statements regarding the NPVs for Models A and B is most correct?

• A) NPV_A = $380; NPV_B = $1,815.
• B) NPV_A = $197; NPV_B = $1,590.
• C) NPV_A = $380; NPV_B = $1,590.
• D) NPV_A = $5,380; NPV_B = $6,590.
• E) None of the above statements is correct.

---

Definitions:

Public Transportation

Systems of shared transportation options, such as buses and trains, available for use by the general public.

Suburbs

Residential areas located on the outskirts of a city or large town, characterized by lower population density compared to urban areas.

Marketing Mix

A set of controllable, tactical marketing tools (Product, Price, Place, Promotion) that a company uses to produce a desired response from its target market.

4Ps

Stands for Product, Price, Place, and Promotion, which are the four key components that make up the marketing mix used by businesses to achieve their marketing objectives.