Study Guides
(238,477)

United States
(119,822)

Michigan State University
(1,990)

Marketing
(68)

MKT 300
(13)

Mr Chang
(1)

# MKT 300 S6 answers.docx

Unlock Document

Michigan State University

Marketing

MKT 300

Mr Chang

Fall

Description

Question 1
10 out of 10 points
What is the Rate of Return for the following investment and incremental cash flows?
Investment Forecast Incremental Cash Flow/Profit
Year 0 1 2 3 4 5
Marketing Mix:
Consumer Advertising ($100,000) $100,000 $20,000 $10,000 $0 $0
Answer
Selected Answer:
23%
Question 2
10 out of 10 points
Calculate the NPV for the following cash flows:
RRR = 12.00%
Year 0 1 2 3 4 5
($150,000) $25,000 $25,000 $5,000 $25,000 $150,000
Answer
Selected Answer:
$-3,188
Question 3
0 out of 10 points
Use S6 Project Re-appraisal to complete this question.
A marketing campaign that cost $75,000 to launch had forecast incremental cash flows of $50,000 in its
first year, $25,000 in its second year and $25,000 in its third year. With a shareholder RRR of 10% how much
shareholder value was it expected to create over the three years?
What actually happened is that it earned $25,000 in the first year. The campaign manager says that the
incremental projected cash flows for year two and three are now $15,000 and $5,000 and the program requires an
additional investment of
$25,000. How much capital will be destroyed by this campaign?
Answer
Selected Answer:
$9,899 and -$52,273
Question 4
10 out of 10 points
You purchased a Annuity for $150,000.During years 1-5 you received payments ofWhat would be your rate
of return?
Answer
Selected Answer:
5.4%
Question 5
10 out of 10 points
Calculate the NPV for the following cash flows:
RRR = 15.00%
Year 0 1 2 3 4 5
($100,000) $15,000 $15,000 $15,000 $25,000 $115,000
Answer Selected Answer:
$5,718
Question 6

More
Less
Related notes for MKT 300