Final Week - no Google Flashcards
of businesses in USA
28M
% of households that are homeowners in USA
66%
Canada’s population
36M
India’s population
1.4B (same as China)
If we lower prices by 10%, how much does quantity have to increase for us to break even?
11.11% (1/9)
5 Ways to expand internationally
- Exporting
- Licensing
- Franchising
- Joint Venture
- Foreign direct investment (acquisition or startup)
If we lower prices by 50%, how much does quantity have to increase for us to break even?
100%
If we lower prices by 25%, how much does quantity have to increase for us to break even?
33.3%
An investment project requires an initial investment of $1M and will result in a profit of $10M in 8 years. The discount rate is 9%. What’s the NPV?
NPV = PV of profits - PV of Investment+costs
With discount rate of 9%, using “Rule of 69-72”, the investment will double in 8 years.
So the $10M profit 8 years from now is worth half today, or $5M.
So the NPV = 5M - 1M = 4M
EU’s population
500M
If we increase prices by 25%, how much does quantity have to decrease for us to break even?
20%
China’s population
1.4B (same as India)
If the prompt involves “green” or something non-profit, need to…
incorporate non-financial factors as well
What is NPV?
PV of cash inflows MINUS PV of cash outflows (investments)
How to measure whether your retail company’s growth is from opening new stores or from improved performance?
Comparable Store Sales (Same-Store Sales) Growth.
This metric compares the sales performance of existing stores over a specific period, excluding the impact of newly opened stores, thus isolating growth due to improved performance from growth due to expansion. By comparing overall growth with Comparable Store Sales Growth, you can determine how much of the growth is attributed to new store openings versus enhancements in existing stores.
If we lower prices by 33.3%, how much does quantity have to increase for us to break even?
50%
Inverse proportions - give examples of formulas and the general rule
If we increase prices by 10%, how much does quantity have to decrease for us to break even?
9.09% (1/11)
Most common way of measuring efficiency in retail?
Sales per square foot, compare to competitors
If we increase prices by 50%, how much does quantity have to decrease for us to break even?
33.3%
Y1: -25%
Y2: -16%
Overall Change?
-41 + 4 = -37%
If we increase prices by 20%, how much does quantity have to decrease for us to break even?
16.6% (1/6)
What is contribution margin?
Same as marginal profit = sale price minus variable cost per unit
Mexico’s population
130M
Percentage change of revenue when adjusting price, quantity
% change = price change 1 + price change 2 + (price change 1 * price change 2) example: A company has $300m in revenue which grows by 20% and then shrinks by 10%. What’s the net change in revenue? 1 + 20% - 10% + (-10%*20%) –> 120% - 10% + -2% = 108%, so 8% change. example: How much will revenue change if a company increases prices by 20% which leads to a 20% decrease in sales? –> 1 + 20% + -20% + -4% = 96% –> change of -4%
5 ways to price differentiate/discriminate in order to improve revenue and profitabality
• Customer Segmentation
• Product Versioning
• Dynamic Pricing
• Bundle Pricing
• Personalized Pricing
Avg size of household in USA
2.5 people (there are 120m households with 300m/2.5-=120)
Estimate Baseline: 900,000 CAGR: 40% Years: 1
1,260,000
$400M growing at 10% for 5 years will be worth?
600M
If we lower prices by 20%, how much does quantity have to increase for us to break even?
25%
of households in the USA
120m (300m population divided by 2.5 people per household)
