QUESTION 44.1 Mrs Tintswalo Maila owns a metal press shop and is considering expanding hercompany to include an advanced machining process plant. If the plant issuccessful, her company could realise an additional R200 000. profit. If it fails shecould incur a loss of R180 000. Tintswalo, being the eternal pessimist, estimates a60% chance that the new plant will fail. Her other option is to build a pilot plant tohelp her decide whether to build a complete facility. The pilot plant would cost R10000 to build and Tintswalo estimates that the pilot has a 50-50 chance of success.It the pilot plant is successful then there is a 90% likelihood that the full plant willalso be successful. If the pilot plant is unsuccessful then there is a 20% probabilitythat the full plant will also be unsuccessful. Tintswalo is faced with the problem ofhaving to decide whether to build a full plant directly from the onset or to first builda pilot plant and based on its performance, decide whether to build the full plant ornot.4.1.1 Make use of decision tree analysis to help Mrs Maila decide on the mostappropriate action to take.(20)

Decision tree analysis A decision tree is a process of drawing a decision tree, which we can…

Answered: 4.1 Mrs Tintswalo Maila owns a metal…

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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A private bank's social security mutual fund pays its members a pension, retirement bonus and death insurance to all members in their retirement. This aid fund has 5,000 active members paying premiums and 1,200 members receiving pensions. The average age of active members is 35 and the average age of retired members is 65. The retirement age for all members is set at 60. According to the aid fund contract, a pension of 40,000 TL is given to the retired member every year, a retirement bonus of 500,000 TL to the retired member, and 300,000 TL to his family in the event of the death of any member. Active members make a premium payment of 15,000 TL every year during the working period. This mutual fund uses the premiums it collects and its current cash assets at an annual interest rate of 12%. Calculate the sum of the actuarial obligations of this charity. Calculate the sum of the actuarial revenues of this charity. What should be the reserve of this aid fund?
Suppose you have the alternative of receiving either $24,000 at the end of seven years or P dollars today. Currently, you have no need for money, so you could deposit the P dollars in a bank that pays 5% interest. What value of P would make you indifferent in your choice between P dollars today and the promise of $24,000 at the end of seven years? The value of P that would make you indifferent in your choice is $ .(Round to the nearest dollar.)
Julie is considering installing solar photovoltaic panels on the roof of her house. Her monthly electricity bills currently average $60. The cost of installing a photovoltaic system is $18,000; however, she expects a 30% reduction in this cost due to tax credits and local rebates. Assuming all of her electrical needs are met by the new system and neglecting possible revenue when the system puts electricity back into the grid, what is the approximate payback period for the photovoltaic system? The photovoltaic panels will pay for themselves in approximately months. (Round your answer to the nearest whole number as needed.)
If a company has excess capacity, it is contemplating whether a special order should be accepted. The order will not impact regular sales. If the company accepts the special order, what will occur? O Both fixed and variable costs will increase. Net income will increase if the special sales price per unit exceeds the unit variable costs. There are no incremental revenues. Incremental costs will not be affected.
if in a 2 party race, party 1 is leading in the age category 45 years and under by 10% and that category represents 60% of the electorate and party #2 is leading in the over 45 years by 10% and that category represents 40% of the electorate. Show in percentage the deficit that party 2 needs to make up.
Consider the following bargaining problem: Two siblings Naa and Nii have to have Gh20 million they inherited from their parents between them. Naa gets to make an initial offer. Nii then gets to respond by either accepting Naa's initial offer or offering a counter offer. Finally, Naa can respond by either accepting Nii's offer or making a final offer. If Nii does not accept Naa's final offer both Nii and Naa get nothing. Nii discounts the future at 10% (i.e., future earnings are with 10% less than current earnings) while Naa discounts the future at 20%. Calculate the Nash equilibrium of this bargaining problem.
A surfboard manufacturer lost $500,000 last year during a recession. Total revenue was $5,000,000 and total variable costs were 40% of sales. The production facility ran at 50% capacity. The production manager wants to know the following: a. What is the percent capacity required to break even? b. When the economy recovers this year, if the plant runs at 100% capacity what net income could the company realize? c. There is a possibility that sales could be so strong this year that the plant may be required to run at 120% capacity by offering a lot of overtime to its production workers. This would result in total variable costs rising by 35%. On a strictly financial basis, should the production manager plan to exceed capacity or should he advise top management to freeze production at 100% capacity? Justify your answer. Answer Solution- 9a. 58.3% 9b. $2,500,000 9c. $3,100,000
solve the following problems
32. A hardware company sells a lot of low-cost, highvolume products. For one such product, it is equallylikely that annual unit sales will be low or high. Ifsales are low (30,000), the company can sell theproduct for $20 per unit. If sales are high (70,000),a competitor will enter and the company will be ableto sell the product for only $15 per unit. The variablecost per unit has a 20% chance of being $10, a 60%chance of being $11, and a 20% chance of being $12.Annual fixed costs are $20,000.a. Use simulation to estimate the company’s expectedannual profit.b. Find a 95% interval for the company’s annualprofit, that is, an interval such that about 95% ofthe actual profits are inside it.c. Now suppose that annual unit sales, variable cost,and unit price are equal to their respective expectedvalues—that is, there is no uncertainty. Determinethe company’s annual profit for this scenario.d. Can you conclude from the results in parts a and cthat the expected profit from a simulation is…

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