question archive If all 16 Flip Flop House stores buy 500,000 pairs each from the factory, calculate the following
If all 16 Flip Flop House stores buy 500,000 pairs each from the factory, calculate the following
Subject:EconomicsPrice:2.88 Bought3
If all 16 Flip Flop House stores buy 500,000 pairs each from the factory, calculate the following. The factory also has a cost of capital of 8%.
A) How much profit will the factory generate selling 500,000 pairs to each of the 16 stores?
B) What would be the IRR?
C) What would the NPV of the factory be at the sales level of 500,000 pairs per store?
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As this question does not have the required information to calculate any of the parts (i.e. the costs, cash outlay, returns on investment), we cannot answer it. It should be noted that the only piece of information we require that is provided is the required rate of return, which is described here as the cost of capital.
