Sampson Corp. Is evaluating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are shown next: Possible Market Reaction Low response Moderate response Bigh response Very high response Sales in Units 60 80 100 120 Expected value a. What is the expected value of unit sales for the new product? (Do not round intermediate calculations and round your answer to the nearest whole unit.) Probabilities 0.20 0.30 0.30 0.20 units

Sampson Corp. Is evaluating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are shown next: Possible Market Reaction Low response Moderate response Bigh response Very high response Sales in Units 60 80 100 120 Expected value a. What is the expected value of unit sales for the new product? (Do not round intermediate calculations and round your answer to the nearest whole unit.) Probabilities 0.20 0.30 0.30 0.20 units

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

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Mike Riskless is considering two projects. He has estimated the IRR for each under three possible scenarios and assigned probabilities of occurrence to each scenario. State of Economy Probability Estimated BTIRR Investment I Estimated BTIRR Investment II Optimistic 0.20 0.15 0.20 Most likely 0.60 0.10 0.15 Pessimistic 0.20 0.05 0.05 1.00 Riskless is aware that the pattern of returns for Investment II looks very attractive relative to Investment I; however, he believes that Investment II could be more risky than Investment I. He would like to compare the two investments considering both the risk and return on each. Required: a. Compute BTIRR under each of the three possible scenarios. b. Compute variance and standard deviation of the IRRs.
Please answer 2.4 and 2.5
Consider the basic setup of the Diamond-Dybvig (1983) model. Specifically, there are three periods, denoted t = 0, 1, 2, a single consumption good, and an illiquid investment opportunity that pays gross return 1 if liquidated at t = 1, or gross return 2.2 if liquidated at t = 2. There are 500 people in the economy, each endowed with 1 unit of the consumption good at t = 0. At t = 1, exactly 200 will randomly realize that they need to consume at t = 1 (the early consumers), the remaining 300 people will need to consume at t = 2 (the late consumers). The utility derived from consumption is 1 − (1/c1) 2 for early consumers, 1−(1/c2) 2 for late consumers, where the subscript denotes the time of consumption. Suppose a bank can offer an asset that is more liquid, with gross returns Rd 1 = 1.33 and Rd 2 = 1.71 (depending on the time of liquidation). (i) Calculate the bank’s profit after t = 2. In other words, what amount of funds remains at the bank once all depositors have withdrawn? Now…
A factory is producing a new product, and it is your job to help decide what price will produce maximum for your company. Your accounting department has told you that the profit can be estimated by the formula P(x)= 16=6x^2-x^3, where x is the selling price. Determine the selling price that produces the maximum profit. A.) Find the critical values. B.) Determine the selling price.
d. Have a slöpe term but not an intercept term. Company XYZ expects the profit for next year to be lower than this year's profit. Assume that the selling price per unit, variable cost per unit, and total fixed costs will not change. Which one of the following is false? Select one: a. margin of safety next year will be lower than this year Ob.degree of operating leverage next year will be higher than this year Oc. breakeven point next year will be the same as this year Od. total fixed cost next year will be the same as this year Oe. contribution margin ratio next year will be lower than this year Next page
aper Submarine Manufacturing is investigating a lockbox system to reduce its ollection time. It has determined the following: Average number of payments per day Average value of payment Variable lockbox fee (per transaction) Daily interest rate on money market securities The total collection time will be reduced by three days if the lockbox system is adopted. a. What is the PV of adopting the system? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the NPV of adopting the system? (Do not round intermediate calculations 435 $845 $15 068% and round your answer to the nearest whole number, e.g., 32.) c. What is the net cash flow per day from adopting? Per check? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. PV b. NPV c. Net cash flow c.Net cash flow per day per check
A company needs a CNC machine. One of four alternative CNC machines will be selected. Machines have no salvage value. Minimum attractive rate of return is %10. The costs of the machines are given in the table below. And please make profitability by using equivalent value methods such as present value, annual equivalent cost and future value, and return rate methods such as internal rate of return and external rate of return. Finally, would you compare all the data? The problem has no input values, only the values in the photo I sent you.
Suppose that consumers have utility function U(C) = log(C) where C is the consumption level and log is the natural logarithm. Consumers have initial consumptionlevels of 100 and are exposed to the following risk of loss: lose 10 with probability0.4 and lose 5 with probability 0.6. They are considering buying insurance to coverthese losses. What is the certainty equivalent level of C when uninsured? (Hint: Findthe consumption level CEsuch that U(CE) equals the expected utility whenuninsured.)
Take into account the possibility of raising the cost of a good with an 8% profit margin. Calculate the effect of this price increase on the profit margin if you could raise the price by 1% while keeping the sales volume (in unit terms) at the same level as before the price increase. (Assume there are no fixed costs while answering this question. Only the percentage change in profit margin has to be calculated.)
1 We learned how to use the Scenario Manager to view the results of a model when multiple 2 assumptions are changed. Using the Assumptions below, build the pro forma (in yellow) model and then run the 3 Scenarios using the the inputs in green below the pro forma. Your answer should show the After Tax Profits per Year (Summary range should be B25:F25). 4 5 6 Assumption 7 Tax Rate 8 Unit Sales 9 Sales Growth 10 Year 1 Price 11 Year 1 Cost 12 Cost Growth Rate 13 Price Growth Rate 14 15 16 17 Unit Sales 18 unit price 19 unit cost 20 21 Revenues 22 Costs 23 Before Tax Profits 24 Tax 25 After Tax Profits 26 27 28 Scenario 29 Accelerated Growth 30 Sustainable Growth 31 Moderate Growth 32 Moderate Decline 33 Accelerated Decline 34 35 Range name taxes Year1 units salesgrowth Year1 price Year1 cost costgrowth pricegrowth 1 200,000 $75.00 $60.00 $0 $0 Unit Sales 300,000 250,000 225,000 180,000 165,000 18.0% 200,000 3.5% $75.00 $60.00 2 3.0% 5.0% $0 $0 Year 3 $0 $0 Sales Growth Cost Growth 10.0%…
assume that $1 one year from now is worth $0.90 today, and $1 two years from now is worth $0.75 today. Dollars can be bought and sold at these prices. There are no transaction costs.A firm anticipates that it will have a surplus of dollars one year from now but a shortage two years from now. The present value of the surplus of dollars that is forecast for one year from now is $2,000. What is the amount of the surplus in terms of dollars available in one year?
If, Total Fixed cost OMR 32000, Selling price per unit OMR 20, and Variable cost per unit OMR 12. What will be the Margin of safety and profit if actual sales are OMR 85000? Select one: O a. None of the options O b. Margin of Safety OMR 5000, Profit OMR 2000 c. Margin of Safety OMR 10000, Profit OMR 4000 O d. Margin of Safety OMR 26667, Profit OMR 16000

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