Engineering Econ HW8 Q3 3. Two instructors announced that they "grade on the curve," that is, give a fixed percentage ofeach of the various letter grades to each of their classes. Their curves are as follows:GradeAInstructor A8%Instructor B10%B12%15%C50%50%D20%15%F10%10%a. What is the expected value of grade (using A-4, B=3, etc.) for each instructor?b. If a random student came to you and said that his object was to enroll in the class inwhich he could expect the higher grade point average, which instructor would yourecommend?

a)LetX = value of instructor ASo Pmf of X is given asGradexP(x)A40.08B30.12C20.5D10.2F00.1Now from…

Answered: 3. Two instructors announced that they…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter17: Making Decisions With Uncertainty

Section: Chapter Questions

Problem 8MC

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An investment plan allows investors to deposit a minimum of £1,000 at the beginning of the term, which pays a fixed return rate of 5% per annum. Af- ter a year, investors have to deposit a minimum of £800 with an expected return rate of 3% per annum for the second year and a standard deviation of 2% per annum. a. Find the expected value of the total minimum amount earned after two years of investment. b. Find the standard deviation of the total minimum amount earned after two years of investment.
An estate agent advertises its houses in two media; Daily Graphic and Ghanaian Times. The agent believes that there is a relationship between the sales S and the amounts spent on the two advertising media. The relationship is given by; where, d is the amount spent in Daily Graphic and g is the amount spent in Ghanaian Times. The estate’s agent fee is 12½% and this includes the cost of adverting. If the agent has planned to spend only 200 thousand Ghana Cedis on advertisement, show how it should be allocated between the two media in order to maximize net profit.
If a team from Trilogox came up with the following PFMEA exercise results during its risk exposure analysis: Risk Occurrence Probably will occur Outcome Detection Financial Cost increase by Detection method has 30% medium effectiveness Marketing Probably will not Cost increase by Detection method has medium effectiveness Cost increase by Detection method has medium effectiveness Cost increase by Detection method has 2% occur Quality Probably will occur 40% Capability Probably will occur 10% medium effectiveness Materials Probably will occur Cost increase by Detection method has medium effectiveness Cost increase by Detection method has 10% Labor Probably will occur 40% medium effectiveness b. Which are the most critical risks by identifying the critical values? What actions do you recommend? Evaluate the risks by assigning one degree of leniency in their value.
The market demand for the newest smartphone is 1 million units. The selling price for the LG phone is $400.00. The cost is $100 per unit. LG currently has market share of 10 percent. The marketing and sales expense is $5 million. Assume market demand grows by 20%. Given the 20% increase in market demand, LG maintains its market share of 10%, selling price of $400, unit cost of $100, and marketing and sales expense of $5 million. What is the new net marketing contribution (NMC)? O a. $36 million Ob. $31 million O. S7 million O d. $12 million
Sh.11.
Please provide answer in 1 hr please solve all questions request
Who answered the (a) part, Please complete answer for the (b) part
A risk-neutral firm produces chemical products, and its objective is to maximize expected profit. There is a risk that there will be an accident during the production process, and dangerous chemical products will be released into the ocean, polluting the water. To reduce the risk of an accident, the firm can choose Low or High investment in safety. Low Investment in Safety_ Cost for firm= $0 Probability of an Accident = 80% Probability of No Accident =20% High Investment in Safety Cost for firm= $150 Probability of an Accident = 20% Probability of No Accident = 80% The Government wants to reduce the risk of an accident, but the Government cannot observe the fir m's investment in safety. Therefore there is a moral hazard problem. However, the Government can observe whether an accident occurred or not. So the government decides to create a fine (penalty): if an accident occurs, the firm must pay a fine F to the Government. If an accident does not occurs, then the firm does not have to…
efer to the following table showing the probability distribution of payoffs from an activity to answer the question below: Units Payoff Probability 1 $30 10% 2 40 25% 3 60 30% 4 50 20% 5 10 15% What is the expected value?
Question One. The ABC Book Company has a choice of publishing one of two books on the subject of Greek mythology. It expects the sales period for each to be extremely short, and it estimates profit probabilities as follows: Probability 0.2 0.3 0.3 0.2 Book A Profit Class Exercise $2,000 2,300 2,600 : 2,900 Probability 0.1 0.4 0.4 0.1 Book B Profit $1,500 1,700 1,900 2,100 Calculate the expected profit, standard deviation, and coefficient of variation for each of the two books. If you were asked which of the two to publish, what would be your advice?
Consider an investment that pays off $700 or $1,600 per $1,000 invested with equal probability. Suppose you have $1,000 but are willing to borrow to increase your expected return. What would happen to the expected value and standard deviation of the investment if you borrowed an additional $1,000 and invested a total of $2,000? What if you borrowed $2,000 to invest a total of $3,000? Instructions: Fill in the table below to answer the questions above. Enter your responses as whole numbers and enter percentage values as percentages not decimals (.e., 20% not 0.20). Enter a negative sign (-) to indicate a negative number if necessary. Invest $1,000 Invest $2,000 Invest $3,000 Expected Value Percent Increase Standard Deviation 1150 S 28 % $ 8 % $ Expected Return N/A Doubled Tripled : #
A manager is trying to decide whether to buy one machine or two. If only one is purchased and demand proves to be excessive, the second machine can be purchased later. Some sales will be lost, however, because the lead time for producing this type of machine is six months. In addition, the cost per machine will be lower if both are purchased at the same time. The probability of low demand is estimated to be 0.30. The after-tax net present value of the benefits from purchasing the two machines together is $80,000 if demand is low and $160,000 if demand is high. If one machine is purchased and demand is low, the net present value is $110,000. If demand is high, the manager has three options. Doing nothing has a net present value of $110,000; subcontracting, $140,000; and buying the second machine, $130,000. a. Choose the correct decision tree for this problem. Note that each payoff is given in thousands of dollars. OA. В. Low demand Low demand -80 Do nothing 110 Buy 1 110 Buy 1 0.30 2…

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