b. What is the expected value for the rezoned apartments, if the rezoning cost is included (but land cost is excluded)?Note: Do not round your intermediate calculations. Enter your answers in millions rounded to 2 decimal places. Negativeamounts should be indicated by a minus sign.Expected valuemillionc. If the land is rezoned, what should the contractor decide?O Build shopping centerO Build apartmentsd. What is the expected revenue, if the land is not rezoned (excluding the land cost)?Note: Do not round your intermediate calculations. Enter your answers in millions rounded to 2 decimal places. Negativeamounts should be indicated by a minus sign.Expected revenuemillione. What is the expected net profit of entire project, including all applicable costs?Note: Do not round your intermediate calculations. Enter your answers in millions rounded to 2 decimal places. Negativeamounts should be indicated by a minus sign.Expected net profitmillion

Answered: Image /qna-images/answer/c2e57dea-f69d-4828-aa34-02bb93faf976.jpg

Answered: b. What is the expected value for the…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Refer to exercise 2(a). The estimated cost to complete the house by contractors is (choose the best answer): $348,000 B $334,080 $320,160 $299,280 E
A manager is trying to decide whether to build a small, medium, or large facility. Demand can be low, average, or high, with the estimated probabilities being 0.40, 0.35, and 0.25, respectively. A small facility is expected to earn an after-tax net present value of just $13,000 if demand is low. If demand is average, the small facility is expected to earn $15,000; it can be increased to medium size to earn a net present value of $30,000. If demand is high, the small facility is expected to earn $25,000 and can be expanded to medium size to earn $50,000 or to large size to earn $100,000. A medium-sized facility is expected to lose an estimated $50,000 if demand is low and earn $100,000 if demand is average. If demand is high, the medium-sized facility is expected to earn a net present value of $125,000; it can be expanded to a large size for a net payoff of $175,000. If a large facility is built and demand is high, earnings are expected to be $180,000. If demand is average for the large…
Exhibit A. Southland Corporation’s decision to produce a new line of recreational products resulted in the need to construct either a small plant, medium or large plant. The best selection of plant size depends on how the marketplace reacts to the new product line. To conduct an analysis, marketing management has decided to view the possible long-run demand as low, medium, or high. The following payoff table shows the projected profit in millions of dollars: Long-run Demand Plant Size Low Medium High Small 225 280 300 Medium 120 280 370 Large 75 280 750 Referring to Exhibit A, a. Identify the decision to be made, the decision alternatives, the chance event and the states of nature for this problem. b. What alternative should be chosen under the maximin criterion? Assume that the prior probabilities for low, medium and high demand are 0.2, 0.5 and 0.3, respectively. c. What is the recommendation if the Bayes' Decision Rule is…
1. Kirsten is trying to decide where to go for her well-earned vacation. She would like to camp, but if the weather is bad, she will have to go to a motel. Given the costs and probabilities of bad weather given below, which destination should she choose? Camping cost Motel cost Probability of bad weather Nevada $21.2 $80.9 0.2 Oregon $15.9 $84.6 0.4 California $30 $95 0.1 a. California, because its EMV = $33.14 b. Nevada, because its EMV = $33.14 c. California, because its EMV = $36.5 d. Any of the 3 choices. e. Oregon, because its EMV = $43.38 f. Nevada, because its EMV = $43.38 g. None of the 3 choices. h. Oregon, because its EMV is $36.50.
The Candle Company plans to open a new retail store in Portland, Maine. The store will sell specialty candles for an average of $10 each. The average variable costs per candle are as follows: Wax $4 Other additives $2 Base $1 The company is negotiating its lease for the new location. The landlord has offered two leasing options: Option A) a lease of $2,500 per month; or Option B) a monthly lease cost of $2,000 plus 10% of the company's monthly sales revenue. The lease option that is more attractive for the company under its current sales expectations is option B, the fixed lease payment plus sales based commission because it results in the lowest total lease costs The indifference point is The company expects to sell approximately 400 candles per month. Requirement 2. At what level of sales (in units) would the company be indifferent between the two lease options? Show your proof. candles. Begin by selecting the equation to determine the indifference point. (Abbreviations used" FC =…
This is the same payoff table used in questions 2 and 3. Below is a payoff table that lists four mortgage options: Decision 1-year ARM 3-year ARM 5-year Arm 30-year fixed Rates Rise $66,645 $62,857 $55,895 $52,276 Outcomes Rates Stable $43,650 $47,698 $50,894 $52,276 4) Which of the following decisions has the best average payoff? CA. 3-year ARM B. 1-year ARM CC. 5-year ARM CD. 30-year Fixed Rates Fall $38,560 $42,726 $48,134 $52,276
Build-Rite Construction has received favorable publicity from guest appearances on a public TV home improvement program. Public TV programming decisions seem to be unpredictable, so Build-Rite cannot estimate the probability of continued benefits from its relationship with the show. Demand for home improvements next year may be either low or high. But Build-Rite must decide now whether to hire more employees, do nothing, or develop subcontracts with other home improvement contractors. Build-Rite has developed the following payoff table:
A building has an NO of $130,000 and is being valued with acap rate of 4%. Using the income approach, what is the value of the building? $3,250,000 $2.450,000 $1,300,000 $4.130,000
Company DEF has a choice of two machines to purchase. They both make the same product which sells for P10. Machine A has FC of P5,000 and a per unit cost of P5. Machine B has FC of P15,000 and a per unit cost of P1. Under what conditions would you select Machine A?
Sheffield Inc. wants to replace its current equipment with new high-tech equipment. The existing equipment was purchased 5 years ago at a cost of $129,000. At that time, the equipment had an expected life of 10 years, with no expected salvage value. The equipment is being depreciated on a straight-line basis. Currently, the market value of the old equipment is $43, 800. The new equipment can be bought for $176, 540, including installation. Over its 10-year life, it will reduce operating expenses from $192, 300 to $147, 200 for the first six years, and from $200, 400 to $190, 200 for the last four years. Net working capital requirements will also increase by $20, 600 at the time of replacement.It is estimated that the company can sell the new equipment for $24, 600 at the end of its life. Since the new equipment's cash flows are relatively certain, the project's cost of capital is set at 9%, compared with 15% for an average - risk project. The firm's maximum acceptable payback period is…
Build New plant option=
Based on Exhibit 9-9, or using a financial calculator, what would be the monthly mortgage payments for each of the following situations? Note: Round time value factor and final answers to 2 decimal places. What relationship exists between the length of the loan and the monthly payment? How does the mortgage rate affect the monthly payment? Monthly Mortgage Payment a. $123,000, 15-year loan at 6.00 percent. b. $165,000, 30-year loan at 7.50 percent. c. $68,000, 20-year loan at 7.50 percent. d-1. Longer mortgage terms mean a monthly payment. d-2. For increase in mortgage rate monthly payment is required.

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