As part of the work to perform a Monte Carlo simulation, the following information about the unit variable operating costs that will be generated by a project is as follows: Expected unit variable operating costs: $200 95% confidence interval forecast of unit variable operating costs: $155 to $245 If the above unit sales are distributed normally, compute the approximate standard deviation for unit variable operating costs. O $22.50 $45.00 O $17.50 O $11.25

As part of the work to perform a Monte Carlo simulation, the following information about the unit variable operating costs that will be generated by a project is as follows: Expected unit variable operating costs: $200 95% confidence interval forecast of unit variable operating costs: $155 to $245 If the above unit sales are distributed normally, compute the approximate standard deviation for unit variable operating costs. O $22.50 $45.00 O $17.50 O $11.25

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

A project has following estimated data: Price = $60 per unit; variable cost = $30 per unit; Fixed cost = $100,000; Company has borrowings of $100,000 at a rate of 10%. Calculate the combined leverage of the project when units sold are 10,000 units. а. 1.58 b. 0.63 с. 1.50 d. 1.05
Based on estimates the data for 2 types of bridges with different lives are as follows. If the minimum attractive rate of return is 9%, determine which project is more desirable using Annual Cost Method & Rate of Return Method. Timber Bridge Steel Bridge First Cost Salvage Value Life in yrs Annual maintenance 500k 20k 12 60k 1.4M 100k 36 25k
A project has following estimated data: Price = $60 per unit; variable cost = $30 per unit; Fixed cost = $100,000; %3D %3D Company has borrowings of $100,000 at a rate of 10%. Calculate the combined leverage of the project when units sold are 10,000 units. a. 1.58 b. 0.63 с. 1.50 d. 1.05
Problem 2: For the following data, find: (a) The profit expected if the project is finished in 26 days. (b) The maximum profit obtainable and the project duration associated with it, i.e., the optimum duration. Project Duration Minimum Direct Cost (S) 20 41,000 22 40,600 25 39,900 27 39,200 29 38,400 31 37,600 33 36,900 34 36,500 36 36,250 Bid = $48,000 Setup cost $1,000 Indirect cost = $250/day
Harry is trying to evaluate a two year project using NPV. There is uncertainty as to the level of sales (in units) in each of the two years: Year 1 Sales units Probability Year 2 Sales units Probability 10,000 0.3 8,000 0.2 10,000 0.8 15,000 0.7 20,000 0.6 10,000 0.4 Required: (a) On what expected level of sales in Year 1 and 2 should Harry base his NPV calculation? (b) Imagine that the project outlay is £230,000 and each unit sold has a contribution of £10. If Harry’s cost of capital is 10%, what is the project’s…
Suppose you deposit $50 at the beginningof every month in a bank account that earns1% interest per month. How many monthwill it take before you have $4175.00 inyour account?
Use Expected NPV and PVR analysis for a minimum rate of return of 20.0%to evaluate the economic potential of buying and developing the rights to a new process with the following estimated costs, revenues, and success probabilities. The process rights would cost $100,000 at time zero, and it is considered 100% certain that an experimental development pilot plan work will be done one year later for a cost of $500,000. There is a 60.0% probability that the experimental development results will look good enough to take the project to production for a $400,000 capital cost at year one. If the experimental development results are unsatisfactory, a pilot plan abandonment cost of $40,000 will be incurred at year 1. If the project is taken to production, it is estimated there will be a 50.0% probability of generating production that will give $450,000 peryear net positive cash flow for years 2 through 10, a 35.0% probability of generating $300,000 per year net positive cash flow for years 2…
Suppose the Marginal Benefit and Marginal Cost for crude oil at any given period is: MB = 159 - 2.1Q and MC=36 + 0.9Q Where price is measured in dollars and quantity is measured in barrels. The total oil reserve is 100 tons. What will be the socially efficient quantity for period 1?
The following results were obtained in a decision problem where payoffs are profits: EVSI EVwithPI 612 4300 If the efficiency of sample information is 30%, what is the maximum expected monetary value? Maximum EMV =
Blooper's analysts have come up with the following revised estimates for its magnoosium mine: Range Pessimistic Optimistic Initial investment +50% -25% Revenues -15% +20% Variable costs, percent of revenues +10% -10% Fixed costs +50% -30% Working capital, percent of expected value +50% -50% Conduct a sensitivity analysis for each variable and range and compute the NPV for each. Use Spreadsheet 10.1 and accompanying data as a starting point for the analysis. Note: Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter your answer in millions rounded to 2 decimal places. Project NPV Pessimistic Expected Optimistic Initial investment Revenues Variable costs Fixed costs Working capital
Do not provide hand written solution
engineering economics

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS