Thompson Manufacturing is considering two investment proposals. The first involves a quality improvement project, and the second is about an advertising campaign. The cash flows associated with each project appear below: Quality Improvement Advertising Campaign
Intial cash inflow 100,000 100,000
Cash inflows
Year 1 10,000 80,000
Year 2 30,000 45,000
Year 3 125,000 10,000
Suppose the hurdle rate of the firm is 10%. Calculate the cash inflows of the "incremental project" by subtracting the cash flows of the second project from the cash flows of the first project. What is the IRR of the incremental project?

Responsible for setting the goals and planning for the future as well as leading and controlling the work of others. out the decisions of top management. often responsible for various departments such as the production, marketing, and accounting departments. process or function of planning organizing leading and controlling. the resources arranged in an orderly and functional way to accomplish goals and objectives. the company on track and making sure goals are met. for the daily operations of a business. examples of this are supervisors, office managers, and crew leaders. act or process of creating goals and objectives as well as the strategies to meet them. for the daily operations of a business. examples of this are supervisors, office managers, and crew leaders. how the firm is structured and who is in charge of whom. direction and vision

Two assets have the following expected returns and standard deviations when the risk-free rate is 5%: asset a e(ra) = 18.5% σa = 20% asset b e(rb) = 15% σb = 27% an investor with a risk aversion of a = 3 would find that on a risk-return basis. a. only asset a is acceptable b. only asset b is acceptable c. neither asset a nor asset b is acceptable d. both asset a and asset b are acceptable

The role of the credit department includes: a. evaluating customers' credit applications to determine whether they meet the company's approval standards. b. approving all credit applications in order to avoid losing sales. c. collecting cash from customers. d. following unwritten approval standards for processing customers' credit applications.