Expert Answers

1. Compute the present value of the two investments in figure 2 based on the current non risk adjusted discount rate of 10 percent. which of the two is superior?

2.Compute the present value of investment Abased on a risk adjusted discount rate at 13 percent as applied to a new product in the domestic market.

3. compute the present value of investment b based on the adjusted discount rate of 17 percent as applied to introducing an established product in a foreign market.

4. which of the two is superior under the risk adjusted discount rate approach as utilized in question 2 and 3?

5. if the two projects were mutually exclusive, what would your decision be based on the analysis under the risk adjusted discount rate approach?

6. if the two projects were non-mutually exclusive, and there was no capital rationing, what would your decision be based on the analysis under the risk adjusted discount rate approach?

7. do you agree with tai ming arguments about the impact of international diversification on the discount rate?