You are a consultant to a firm evaluating an expansion of its current business. The cash-flow forecasts for the project are: CF0= - 100 ; CF1-CF10=+15. On the basis of the behavior of the firm's stock, you believe that the beta of the firm is 1.4. Assuming that the rate of return available on risk-free investments is 4 percent and that the expected rate of return on the market portfolio is 12 percent, what is the net present value of the project?

The marketing manager for a company that manufactures pet foods wants to base the marketing strategy he implements for the company's products on the product life cycle stages. In order to do this, what should he do?

a. Add new ingredients to products that enter the maturity stage of the produAct life cycle. b. Change all private brands to generic brands once a product reaches the maturity stage. c. Create a line extension for every product the company makes as soon the product leaves the introduction stage of its product life cycle. d. Change the labels on its products as they change stages of the life cycle.

$1,000 received 5 years from today discounted at an annual rate of 10% has a smaller present value than $1,000 received 10 years from today discounted at an annual rate of 5%

Indicate whether the statement is true or false.