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You are thinking about expanding your business into one of:
- Non-fungible tokens
- Crypto-currencies
- Designer handbags
- Sneaker trading
You have performed a cost-benefit analysis of each. How do you choose the best option?
Pick the option with the lowest NPV.
Pick the option with the highest NPV.
Pick the option with the lowest IRR.
Pick the option whose returns can be forecast deterministically.
2, Which is the best discount rate to use to calculate the NPV of an investment?
Your rate of return on a similar, alternative, investment |
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The interest rate needed to get a positive NPV |
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The IRR of the investment |
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5% |
3, Shopping for groceries, Eric puts eggs $3, milk $4, juice $6, potatoes $3, and cantaloupe $4 in his shopping cart. Then, he realizes he also needs to buy a $9.50 bag of cat food. The cat food makes the whole bag of groceries too heavy to carry home, so he’ll also need to pay $6 for delivery. What is the total, marginal cost of the cat food? (Enter your answer in dollars and cents, without the ‘$’.)