2. The Anderson Machine Company's main product is a GPS tracking device that is only one squareinch in size but can be tracked on the internet from nearly any location in the world. Their device isrelatively new and is still working out some problems, but there are no other GPS trackers in theworld that are as small in size as Anderson's device. Investors in Anderson told the company theyexpected to earn a risk-adjusted return of 12% on their investment, and the device has beenprofitable with a 7% return on investment. From a VRIS perspective, which of the following is acorrect description of Anderson's situation? (F&E)The device is valuable, rare, and difficult to copy, but has a lot of substitutes so the company has a temporary competitiveadvantageThe device is valuable but not rare, so the company is experiencing competitive parityO None of these are correctThe device is valuable and rare and a source of competitive advantageThe device is not considered to be valuable and therefore needs to be improved or sold off

In the given case The product is relatively new but not a entire new innovation, there other other…

Answered: 2. The Anderson Machine Company's main…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 12P

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