Case 10: Calculate expected value for both products. The Pay-off Matrix Under Risk Probability Competitor States of Nature Do Nothing Comparable Product 0.4 Introduce Introduce Superior Product Product P $482,515 0.3 0.3 $290,285 $193,830 Segmental Contibution Margin Product Q $780,360 $258,820 $155,280
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- EXTRA RISK PROBLEMS Sanck A Sk Expected Retun Standand Deviatim 12 75 16 Comelation cnefficieit wth the Market Comelation coeficient with Stock B Risk fre e 2% Expected etu on the Market 12 Standund deviation of the Market E 1. What is the expected retum on a portfolio comprised of S60o00 of Suck A and S4000 of Sock B7 2. Whe is the Stnderd deviation of this portidio? 3. Does it make sense to combine these two in this way? Pease explain why. 4 What is the ocoefficient of variation for Stock A? What is the coefficient of variation for Stock B?1 Consider the two investments listed below with possible outcomes and probabilities: INVESTMENT (in $1000) P SAFE RISKY INVESTMENT AMOUNT 40+ 40+ GOOD SCENARIO OUTCOME 45+ 80+ AVERAGE+ SCENARIO PROB+ OUTCOME 0.40+ 0.40 42+ 45 BAD+ SCENARIO PROB OUTCOME PROB 0.20 35+ 0.20 10 0.40€ 0.40 a) What are the expected payoffs (E(x)) and standard deviations for each investment? b) Suppose I have utility function U(*) = √(x). What is the expected utility from each investment? c) Which investment will I choose, if any? Show and explain your work and provide the intuition.< d) What is the value of the risk premium for the SAFE investment? Show and explain your work and provide the intuition. e) What is the value of the risk premium for the RISKY investment? Show and explain your work and provide the intuition.< 43 A ✔ →What will be Hale’s TV Production’s decision based on the following criteria:a. MAXIMAXb. MAXIMINc. MINIMAX REGRETd. EXPECTED VALUEe. Construct the decision tree for this problem and indicate the decision based onthe decision tree analysis.
- 20 O It costs a pharmaceutical company $35,000 to produce a 1000-pound batch of a drug. The average yield from a batch is unknown but the best case is 90% yield (that is, 900 pounds of good drug will be produced), the most likely case is 85% yield, and the worst case is 70% yield. The annual demand for the drug is unknown, with the best case being 22,000 pounds, the most likely case 18,000 pounds, and the worst case 12.000 pounds. The drug sells for $60 per pound and leftover amounts of the drug can be sold for $8 per pound. To maximize annual expected profit, how many batches of the drug should the company produce? You can assume that it will produce the batches only once, before demand for the drug is known. You should consider a range of batches between 13 and 22.Determine the two best decision alternatives by a conservative decision maker. Decision dl d2 d3 d4 d1 and d4 -350 d2 and d3 d3 and d4 sl States of Nature 900 d1 and d2 d1 and d3 500 700 750 -380 210 -360 $3 1100 600 -370 700McBurger Inc., wants to redesign its kitchen to improve productivity and quality. Three designs,called B1, B2, and B3, are under consideration. No matter which design is used, daily demandfor sandwiches at a typical McBurger restaurant is 500 sandwiches. A sandwich costs 500 baizato produce. Non-defective sandwich sell, on average, for 1 OR per sandwich. Defective sandwichcannot be sold and are scrapped. The goal is to chose a design that maximizes the expected profitat a typical restaurant over a period of one year (365 days). Designs B1, B2, and B3 cost 40,0003OR, 50,000 OR, and 70,000 OR, respectively. Under design B1, there is 0.8 chance that 90 outof each 100 sandwiches are non-defective and 0.2 chance that 70 out of each 100 sandwiches arenon-defective. Under design B2, there is 0.85 chance that 90 out of each 100 sandwiches are nondefective and 0.15 chance that 75 out of each 100 sandwiches are non-defective. Under design B3,there is 0.9 chance that 95 out of each 100 sandwiches…
- PO PhotoStudy Verification- jeolthirs x + suny.edu/webapps/assessment/take/launch.jsp?course_assessment_id%3 48445 1&course_id=_25374_1&content_id%3 830840 18step3Dnull Inspirational Quote... M Gmail O YouTube Dutchess Communi.. 9 Time Calculator (1) A Maps Strong Random Pas.. v Question Completion Status: Oc the Civilian Conservation Corps. O d the Agricultural Adjustment Act. QUESTION 6 The Glass-Steagall Act O a abolished the stock market. Ob required banks to give home mortgages to all Americans regardless of gender or race. Oc established the Federal Deposit Insurance Corporation and barred commercial banks from becoming pvolved in the buying and selling stocks. Od abolished the Federal Reserve Bank. QUESTION780. Gridiron University is a private university. A successful alumnus has recently donated $1,000,000 to Gridiron for the purpose of funding a "center for the study of sports ethics." This donation is condi- tional upon the university raising matching funds within the next 12 months. The university administra- tors estimate that they have 50% chance of raising the additional money. How should this donation be ac- counted for? a. As a temporarily restricted support. b. As unrestricted support. c. As a refundable advance. d. As a memorandum entry reported in the footnotes.Determine whether or not to stock a large supply of steel. There is uncertainty in the price of steel. Based on past history the following data are available Price (future) Prob (Price) PW if stocked PW if not stocked High 0.3 100000 0 Medium 0.5 -10000 0 Low 0.2 -50000 0 What is the probability that stocking steel will result in a negative present worth (PW)?
- Question 39 The sensitivity graph of a project is presented below: Sensitivity Analysis Q6 Graph.pdf 70 What is the least sensitive input of the project? 60 O a. SV 50 O b. MARR O. O&M 40 MARR O d. FC 30 sv O&M Base FC 20 VC 10 -20% -15% -10% -5% 0% 5% 10% 15% 20% Deviation Present Worth ('000 $)1) The sensitivity graph of a project is presented below: 70 60 Present Worth ('000 $) 50 40 30 SV 20 10 MARR -20% -15% -10% -5% C) FC D) VC E) O&M Base Deviation What is the most sensitive input of the project? A) MARR B) SV O&M FC VC 0% 5% 10% 15% 20%a) A thermomix is advertised at RM8000 less 40%, 12% and 2.5%. Find the net price. b) Saira, a furniture shop owner, buys a new set of furniture worth $8,260. She received an invoice dated 26 October 2021 with trade discounts of 7%, 2% an is offered cash discount terms 3/15, 2/30, n/60. i. Calculate the single discount equivalent to the trade discounts given. Calculate the last day to receive the 2% cash discount. Determine the total amount due if Saira pays the invoice on 17 November 2021. iv. If she pays $4,000 on 3 November 2021, how much is the balance due before the credit term ends?