## Answers

Answer 1) | |||||

Year 0 | Year 1 | Year 2 | |||

CAPEX | 3.6B | ||||

EBITDA | 9000*X-1.8B | 8000*0.5X-0.5B | |||

depreciation | 1.2B | 1.2B | |||

EBIT | 9000*X-3B | 8000*0.5X-1.7B | |||

Net income | (9000*X-3B)0.75 | (8000*0.5X-1.7B)*0.75 | |||

FCF | EBIT - Taxes + Depreciation & Amortization - Capex – Change in Working Capital, | ||||

(9000*X-3B)0.75+1.2B-1000*X | (8000*0.5X-1.7B)*0.75+1.2B-500*X | ||||

FCF | |||||

NPV= | (-3.6B)+(9000*X-3B)0.75+1.2B-1000*X/1.25+(8000*0.5X-1.7B)*0.75+1.2B-500*X/(1.25*1.25) | ||||

Answer 2) | |||||

If X=1 mn and launched in year 0 | |||||

FCF | (9000*1-3*1000)0.75+1200-1000*1 | ||||

4700 | |||||

NPV | 160 | ||||

If X=0.2 mn and launched in year 0 | |||||

FCF | (9000*0.2-3*1000)0.75+1200-1000*0.2 | ||||

100 | |||||

NPV | -3520 | ||||

If X=1 mn | If X=0.2 mn | ||||

0.6 | 0.4 | ||||

combined chances | 96 | -1408 | |||

Answer 3) | |||||

If X=0.9 mn and launched in year 1 | |||||

FCF | (8000*0.5*0.9-1700)*0.75+1200-500*0.9 | ||||

2175 | |||||

NPV | -1860 | ||||

If X=0.2 mn and launched in year 1 | |||||

FCF | (8000*0.5*0.2-1700)*0.75+1200-500*0.2 | ||||

425 | |||||

NPV | -3260 | ||||

So if they are thinking to launch than they should launch in year 0, year 1 will bring loss even if customer sentiments are high for the phone. |

#### Similar Solved Questions

1 answer

##### 2. For the reaction below: a. Predict the most stable product(s) and draw the mechanism Br...

2. For the reaction below: a. Predict the most stable product(s) and draw the mechanism Br OK b. Redraw the product/s) below and label all the non-equivalent carbons. How many sonals would you expect to see in the C NMR of the product? Predict the chemical shifts of each carbon below. c. Redraw the ...

1 answer

##### Question (on) 0.00 points 5 attempts leftC Check my work What is the molecular formula for...

Question (on) 0.00 points 5 attempts leftC Check my work What is the molecular formula for a hydrocarbon with 3 carbons that is (a) completely saturated; (b) an alkene; () an alkyne? Gr ?...

1 answer

##### The Dietary Reference Intakes also include recommendations for the percentage of carbohydrate, fat and protein necessary...

The Dietary Reference Intakes also include recommendations for the percentage of carbohydrate, fat and protein necessary for a balanced diet. These are called the AMDR, or Acceptable Macronutrient Distribution Ranges. What are the numbers for these ranges? 9. Carbohydrate 10. Fat 11. Protein Do you ...

1 answer

##### 3. 20 Consider an Edgeworth box are given by lgeworth box economy where preferences and endowments...

3. 20 Consider an Edgeworth box are given by lgeworth box economy where preferences and endowments (a) (5] Find all the Pareto optimal allocations. (b) 15] Using the normalization, p2 1, find the Walrasian equilibrium. (c) [5) Carefully state the first welfare theorem and verify that it holds. (d) [...

1 answer

##### ELECTRON ENERGY LEVEL DIAGRAMS TO3/503 Enter the cadidation state for the element with an atomic number...

ELECTRON ENERGY LEVEL DIAGRAMS TO3/503 Enter the cadidation state for the element with an atomic number of 24 that forms monatomic species that has the electron energy level diagram shown. Your input should be a sign followed by Arabic numeral. For example, you should enter2" for corresponding o...

1 answer

##### Mass Media Company Departmental Expense Allocations For the year ended December 31 Allocation Base Expense Account...

Mass Media Company Departmental Expense Allocations For the year ended December 31 Allocation Base Expense Account General Office Dept. TV Dept. Radio Dept. $ 60,000 5,000 $45,000 3,000 $20,000 2,000 Direct Expenses Salaries Payroll records Supplies Requisitions Indirect Expenses Rent expense Floor ...

1 answer

##### What is the danger of prescribing unwarranted antibiotics just to please a patient

what is the danger of prescribing unwarranted antibiotics just to please a patient...

1 answer

##### Translate the following C code to MIPS assembly code. Use a minimum number of instructions. Register...

Translate the following C code to MIPS assembly code. Use a minimum number of instructions. Register allocations - i $s0 - j $s1 - base of A[] $s2 - base of B[] $s3 2) A[3] = B[i] + B[j]; 3) i = 0; while (j != A[i]) { i++; }...

1 answer

##### The data table below provides the same line item data from state budgets in North Dakota;...

The data table below provides the same line item data from state budgets in North Dakota; however, now the data has been adjusted for inflation. All of the data is given in terms of 2003 dollars. Calculate the inflation adjusted per capita expenditure (amount paid per state resident in terms of 2003...

1 answer

##### The following data apply to the provision of psychological testing services: Sales price per unit (1...

The following data apply to the provision of psychological testing services: Sales price per unit (1 unit = 1 test plus feedback to client) $ 340 Fixed costs (per month): Selling and administration 18,000 Production overhead (e.g., rent of testing facilities) 15,000 Variable...

1 answer

##### 1 76 (6 points) A study was conducted to determine whether the final grade of a...

1 76 (6 points) A study was conducted to determine whether the final grade of a student in an introductory psychology course is linearly related to his or her performance on the verbal ability test administered before college entrance. The verbal scores and final grades for all 10 students in the cl...

1 answer

##### Mailings Review View Strong Subeitie 9-3 Stock Price vs. Intrinsic Value The intrinsic value of a...

Mailings Review View Strong Subeitie 9-3 Stock Price vs. Intrinsic Value The intrinsic value of a stock is $39/share. The market value is curently $40/share. Should an investor buy or sell the stock? 9-4 The Dividend Discount Model How can the price of a stock be estimated? 9-5 Constant Growth Stock...

1 answer

##### If the MPC is 0.6 and the APC is 0.9, the MPS equals 0.2. MPS plus...

If the MPC is 0.6 and the APC is 0.9, the MPS equals 0.2. MPS plus MPC equals 1. So MPS must be equal to 0.2. The MPC and MPS always add to be 1. Separately, neither MPC nor MPS can be less than 0 or greater than 1. 0.4. 1.7. 0.8...

1 answer

##### Please complete all questions. Question 5: Let us say that the U.S. pays import subsidy to...

Please complete all questions. Question 5: Let us say that the U.S. pays import subsidy to import sunflower seeds. Let the free market price of sunflower seeds be $10 per pound. An import subsidy of $2 increases the international price of sunflower seeds to $11.50 per pound. Quantity produced in f...

1 answer

##### Be sure to answer all parts. Enter your answer in scientific notation. = 212 kJ/mol for...

Be sure to answer all parts. Enter your answer in scientific notation. = 212 kJ/mol for the Calculate the pressure of o, in atm) over a sample of NiO at 25.00°C if AG reaction. For this calculation, use the value R= 8.3144 J/K'mol. Nio(s) = Ni(9) +-026) * 10 atm...

1 answer

##### 13. -/10 points SerCP7 19.P.037.soln. My Notes Ask Your Teacher L A cardiac pacemaker can be...

13. -/10 points SerCP7 19.P.037.soln. My Notes Ask Your Teacher L A cardiac pacemaker can be affected by a static magnetic field as small as 1.7 mT. How close can a pacemaker wearer come to a long, straight wire carrying 26 A? cmm...

1 answer

##### A four-resistor circuit is shown in the figure. The values of the resistors are as follows:...

A four-resistor circuit is shown in the figure. The values of the resistors are as follows: R1=3 Ohms, R2=R3=R4=4 Ohms. What is the equivalent resistance Req for this circuit? RA M M R1 R2 R3 O 0.8 ohms O 1.5 ohms 3.14 ohms 0.67 ohms 2.0 ohms...