JNB Study Guide

Without using a calculator, which of the following is the closest estimate of the NPV of $10,000 received two years from now if the discount rate is 10%?

$8,000

In which stage of Stage gate do you conduct a more rigorous analysis of an opportunity? A. Design

Design

In which phase of Stage Gate would you most likely go interview users in search of unmet needs with a goal of finding new business opportunities?

Discovery

JNB now uses Stage Gate including 5 distinct stages.

False

Kelvin has a great eye and does all the graphic design work as the intern for his company. He helps his team with all of its PowerPoint presentations. In this example, which of the CATME dimensions is Kelvin using?

Having related KSAs

Which scenario do would you prefer?

IRR> WACC

Zaid makes a point to arrive on-time to his remote team meetings, with his camera turned on, and a positive attitude for completing the team project. In which of the CATME team dimensions does Zaid appear strong?

Interacting with teammates

New product development is important for which company stage?

NPD is essential to growth in all phases of a company's life cycle.

What is the primary goal of implementing an NPD process?

Reduce risk

Grummet Company is acquiring a new wood lathe with a cash purchase price of $80,000. The Wood Master Industries (the manufacturer) has agreed to accept $23,500 at the end of each of the next 4 years. Based on this deal, how much interest will Grummet pay over the life of the loan?

The future value four years from now is $94,000 ($23,500 x 4 payments). If the present value is $80,000, Grummet Company will pay $14,000 in interest.

You are explaining time value of money factors to your friend. Which factor would you explain as being larger?

The present value of $1 is larger than the future value of $1.

Which of the following is false about Stage Gate?

Work is divided into gates; decisions occur at stages, Decisions include stop go and wait, Stage Gate is a way to guarantee the success of a new product launch

Of the following, which calculation helps determine the profitability of an investment?

internal rate of return (IRR) method

This calculation determines profitability or growth potential of an investment, expressed as a percentage, at the point where NPV equals zero

internal rate of return (IRR) method

The third step for making a capital investment decision is to establish baseline criteria for alternatives. Which of the following would not be an acceptable baseline criterion?

inventory turnover

Which of the following discounts future cash flows to their present value at the expected rate of return, and compares that to the initial investment?

net present value (NPV)

Which of the following does not assign a value to a business opportunity using time-value measurement tools?

payback period method

Preference decisions compare potential projects that meet screening decision criteria and will be ranked in their preference order to differentiate between alternatives with respect to all of the following characteristics except ________.

political prominence

Capital investment decisions often involve all of the following except ________.

short periods of time

When using the NPV method for a particular investment decision, if the present value of all cash inflows is greater than the present value of all cash outflows, then ________.

the investment provides an actual rate of return greater than the discount rate