Faldo Corp sells on terms that allow customers 45 days to pay for merchandise. Its sales last year were $325,000, and its year-e

Answer:

A differentiated market

Explanation:

When a company creates products for at least two distinct categories or demographics, it follows a differentiated marketing approach.

For example, a retailer might promote items in multiple towns appealing to various individuals, or a business may market a brand tailored to women across different age groups.

Answer:

IRR = 14.96%

The project should be rejected, because the calculated internal rate of return falls short of the required return (14.96% < 16%).

Explanation:

The internal rate of return (IRR) is an essential calculation in capital budgeting for assessing potential investment profitability. The IRR rule guides whether to pursue a project or investment, stipulating that if the IRR exceeds the minimum required return, the project should be accepted. Conversely, if it’s lower than the cost of capital or the requisite return, the project should be turned down.

The formula used is as follows:

$0 = (initial investment x -1) + CF1 / (1 + IRR) ^ 1 + CF2 / (1 + IRR) ^ 2 +... + CFX / (1 + IRR) ^ X

Initial Investment = Total initial investment costs year x-1

CFx = Cash Flow during period X

IRR = Internal rate of return

Due to the nature of the IRR formula, it cannot be computed analytically; it must be derived through trial and error or via specialized software for IRR calculation.

In this instance:

IRR = -27200 + 11200 / (1 + IRR) ^ 1 + 14200 / (1 + IRR) ^ 2 + 10200 / (1 + IRR) ^ 3

IRR = 14.96%

The company should not proceed with the investment, as the calculated IRR is less than what is required (14.96% < 16%).

Response

The solution and methods for the problem are included in the upcoming image.

Clarification

Please take into account the information supplied by the task. If you have any inquiries, feel free to contact me again. All the problems are addressed on a single page with references to the formulas.

​The donation of​ 5% of Target's annual revenue towards community initiatives exemplifies​ social responsibility.

This concept of social responsibility involves ethical obligations and civic duty. Through these contributions, Target enhances societal well-being while balancing its growth with community welfare.

Result:

The amount he should pay equals = $270,000

Explanation:

The sum due for the investment represents the present value of net income, discounted at a 12% return rate.

The occupancy percentage = 100 - 5= 95%

The net income equals occupancy rate × total income - expenses

                              = 95%× 3,600× 12 - 8,640= 32400

PV of net income = A/r

A = 32400, r = 12%

                            = 32400/0.12

                             =$270000

The amount he should pay equals = $270,000