Warner Bros. CEO Sam Correct Scenarios Michael We have created various scenarios each with a forecast for our expected sales volume, revenues, expenses, risks, etc. At a high level, here are how each of the scenarios looks like. Calculate NPV for Scenario A. Use the information provided on the right. Round to the nearest whole number. Correct! $447,713 Michael Michael On the right you see how the scenarios stack up. John So which scenario is the best case? B AA Categorize the scenarios. Hint: to see the table of scenarios click the Materials button in the top right corner. Area 2.1 Scenario Comparison ($) Initial Investment Scenario A Scenario B Scenario C Expected interest rate: 12% Forecasting period: 5 years PV annuity factor: 3.6048 2,000,000 2,000,000 2,000,000 Annual Net Income 545, 100 426,995 1,644,385 Annual Cash Flow 679, 015 -493,005 2,564,385 NPV 447,713 -3,777,184 7,244,095

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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CA
Warner Bros. CEO
Sam
Correct
Scenarios
Michael
We have created various scenarios each with a forecast for
our expected sales volume, revenues, expenses, risks, etc.
At a high level, here are how each of the scenarios looks
like.
Calculate NPV for Scenario A.
Use the information provided on the right. Round to the nearest
whole number.
Correct!
Michael
$447,713
Michael
On the right you see how the scenarios stack up.
John
So which scenario is the best case?
Categorize the scenarios.
Hint: to see the table of scenarios click the Materials button in the
top right corner.
Scenarios
Area 2.1
Scenario Comparison ($)
Initial
Investment
Scenario A
Scenario B
Scenario C
Expected interest rate: 12%
Forecasting period: 5 years
PV annuity factor: 3.6048
2,000,000
2,000,000
2,000,000
Annual Net
Income
545, 100
426, 995
1,644, 385
Annual Cash
Flow
679, 015
-493, 005
2,564, 385
NPV
447,713
-3,777, 184
7,244,095
Transcribed Image Text:CA Warner Bros. CEO Sam Correct Scenarios Michael We have created various scenarios each with a forecast for our expected sales volume, revenues, expenses, risks, etc. At a high level, here are how each of the scenarios looks like. Calculate NPV for Scenario A. Use the information provided on the right. Round to the nearest whole number. Correct! Michael $447,713 Michael On the right you see how the scenarios stack up. John So which scenario is the best case? Categorize the scenarios. Hint: to see the table of scenarios click the Materials button in the top right corner. Scenarios Area 2.1 Scenario Comparison ($) Initial Investment Scenario A Scenario B Scenario C Expected interest rate: 12% Forecasting period: 5 years PV annuity factor: 3.6048 2,000,000 2,000,000 2,000,000 Annual Net Income 545, 100 426, 995 1,644, 385 Annual Cash Flow 679, 015 -493, 005 2,564, 385 NPV 447,713 -3,777, 184 7,244,095
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