Suppose your economics professor has an extra copy of a textbook that he or she would like to give to a student in the class. The scheme that is the most likely to result in an efficient outcome is
Q: a) Express this problem as a linear programming model with two decision variables. (b) Solve the…
A: Answer a) Let the decision variables be represented by x and y. Where the amount invested in the…
Q: company wants to issue a 15-year Bond with $1,000 face value and an 8% Annual coupon. the bond can…
A:
Q: Your County has asked you to analyze the purchase of some dump trucks. Each truck wil cost $45,000…
A: Cost of each truck =$45000 Salvage Value= $9000 Operating and maintaining cost=$15,000 n=5 years The…
Q: A purchasing agent for a particular type of silicon wafer used in the production ofsemiconductors…
A: Consider the following information Source A will sell the wafwe= 205per waferSource B will sell at…
Q: A purchasing agent for a particular type of silicon wafer used in the production ofsemiconductors…
A: A reorder point refers to the minimum quantity that must be in the stock before reordering to the…
Q: I need a detailed explanation on how to solve this problem: A bagel shop buys each bagel for $0.08…
A: Given Information:Each bagel buys at the rate of $0.08And each bagel sells at the rate of…
Q: If a $900,000 30-year fully amortizing fixed rate mortgage loan from City National Bank has an…
A: Amortization in the context of a fixed-rate mortgage loan refers to the process of gradually paying…
Q: Draw the decision tree and advise Daegu
A: A decision tree is a probability tree that helps you to make a decision about some kind of process.…
Q: Your answer is partially correct. An independent contractor for a transportation company needs to…
A: The detailed solution is given in Step 2.
Q: When a price floor is imposed, it has an impact on a market if it is set, O a. at the equilibrium…
A: Hello thank you for the question. As per guidelines, we would provide only one answer at a time.…
Q: You receive a 100 000 Rand loan from your local bank that has to be repaid over a period of 10 years…
A: Please find the answer below.Initial uniform annual repayment :- The term "initial uniform annual…
Q: A carpet manufacturer, whose discount rate is 10%, can purchase texturizing equipment for $1,250,000…
A: Here, the decision is required to purchase the equipment, I would use NPV or net present value…
Q: Las Vegas, Nevada, manufacturer has the option to make or buy one of its component parts. The annual…
A: THE ANSWER IS AS BELOW:
Q: ABC Corporation has recently given out a nine-month contract to a construction subcontractor. At the…
A: Introduction- When you negotiate a contract with a provider the phrases of the settlement specify…
Q: If $ 650 is deposited at the end of each quarter into an account paying 11% compounded quarterly,…
A: Compound interest is interest over the interest. It is also called 8th wonder of the world. Human…
Q: If a 3% increase in the price of corn flakes causes a 6% decline in the quantity demanded, what is…
A: The elasticity of demand is the ratio of the percentage of change of quantity demanded to the…
Q: policy or mechanism could solve any informational imbalances
A: An EVPI (expected value of perfect information) is the difference between actual highest return and…
Q: Consider two equity market investors. The first investor is a hedge fund manager that relies on very…
A: "The solution has been provided in a generalized Manner." When it comes to investing in the equity…
Q: Which of the following are important to investors evaluating direct participation programs? I. The…
A: A direct participation program (DPP) is a pooled element that offers financial backers(investors)…
Q: Bruin Properties is in escrow to buy a 175,000 square foot shopping center in Camarillo, California…
A: The correct answer is b.12.4%Explanation:Approach to solving the question: For better clarity of the…
Q: A home improvement store sells hydrangea plants during the spring planting season. The hydrangeas…
A: Cost = $15 per unit Selling price = $45 per unit Salvage value = $7 per unit Service level = 99%…
Q: A farmer wants to decide which of the three crops he should plant on his 100-acre farm. The profit…
A: Find the Given details below: Given details: Alternative Rainfall High Medium Low Crop A…
Q: You are the Economic Consultant for Zuku Farms Ghana Limited. Zuku produces cowpea in a community…
A: Given information, Y = Income of the consumer Initial Price = 31.00 Income = 1001.50 Qd =…
Q: Can you explain to me why my teacher said that the answer in here can't be determined? Or was she…
A: Given that: Sales this year = P500,000 Sales this year at last year's prices = P460,000 Cost of…
Q: Please show all work and explain answer. OneRing Company sells memorabilia to residents of…
A: This question is related to the topic of the Break-even method/Analysis and this topic falls under…
Q: If all the individual land parcels in a new housing development are sold for $300,000 each, the…
A: Release price for each parcel = [60000000 / (120000000 x 75%)] x 300000= $200,000Explanation:1.…
Q: A purchasing agent for a particular type of silicon wafer used in the production ofsemiconductors…
A: Economic order quantity (EOQ) is optimum number of stock to be ordered in such a way that, total…
Q: A borrower took out a $1,450,000 30-year fully amortizing conforming adjustable rate mortgage loan…
A: The objective of this question is to calculate the monthly payment for the second year of an…
Q: Nippon Steel's expenses for heating and cooling a large manufacturing facility are expected to…
A: Computation of Present Worth Year Cash Flow ($) PV Factor @11% Discounted Cash Flows ($) (A)…
Q: Barbara Flynn sells papers at a newspaper stand for $0.40. The papers cost her $0.30, giving her a…
A:
![d
Suppose your economics professor has an extra copy of a textbook that he or she would like to give to a student in the class. The scheme that is the
most likely to result in an efficient outcome is
Multiple Choice
randomly selecting one student to receive the textbook.
auctioning off the textbook to the highest bidder.
letting students take turns using the textbook.
giving the textbook to the student who has the lowest midterm score.
X](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7484602b-9acc-4b43-addf-2d40e6d02089%2F3e3cbc77-8cc3-46bc-b65f-5c907eea0f98%2F6dl9sn_processed.png&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- A new edition of a very popular textbook will be published a year from now. The publisher currently has 1000 copies on hand and is deciding whether to do another printing before the new edition comes out. The publisher estimates that demand for the book during the next year is governed by the probability distribution in the file P10_31.xlsx. A production run incurs a fixed cost of 15,000 plus a variable cost of 20 per book printed. Books are sold for 190 per book. Any demand that cannot be met incurs a penalty cost of 30 per book, due to loss of goodwill. Up to 1000 of any leftover books can be sold to Barnes and Noble for 45 per book. The publisher is interested in maximizing expected profit. The following print-run sizes are under consideration: 0 (no production run) to 16,000 in increments of 2000. What decision would you recommend? Use simulation with 1000 replications. For your optimal decision, the publisher can be 90% certain that the actual profit associated with remaining sales of the current edition will be between what two values?A martingale betting strategy works as follows. You begin with a certain amount of money and repeatedly play a game in which you have a 40% chance of winning any bet. In the first game, you bet 1. From then on, every time you win a bet, you bet 1 the next time. Each time you lose, you double your previous bet. Currently you have 63. Assuming you have unlimited credit, so that you can bet more money than you have, use simulation to estimate the profit or loss you will have after playing the game 50 times.Big Hit Video must determine how many copies of a new video to purchase. Assume that the companys goal is to purchase a number of copies that maximizes its expected profit from the video during the next year. Describe how you would use simulation to shed light on this problem. Assume that each time a video is rented, it is rented for one day.
- Dilberts Department Store is trying to determine how many Hanson T-shirts to order. Currently the shirts are sold for 21, but at later dates the shirts will be offered at a 10% discount, then a 20% discount, then a 40% discount, then a 50% discount, and finally a 60% discount. Demand at the full price of 21 is believed to be normally distributed with mean 1800 and standard deviation 360. Demand at various discounts is assumed to be a multiple of full-price demand. These multiples, for discounts of 10%, 20%, 40%, 50%, and 60% are, respectively, 0.4, 0.7, 1.1, 2, and 50. For example, if full-price demand is 2500, then at a 10% discount customers would be willing to buy 1000 T-shirts. The unit cost of purchasing T-shirts depends on the number of T-shirts ordered, as shown in the file P10_36.xlsx. Use simulation to determine how many T-shirts the company should order. Model the problem so that the company first orders some quantity of T-shirts, then discounts deeper and deeper, as necessary, to sell all of the shirts.Based on Marcus (1990). The Balboa mutual fund has beaten the Standard and Poors 500 during 11 of the last 13 years. People use this as an argument that you can beat the market. Here is another way to look at it that shows that Balboas beating the market 11 out of 13 times is not unusual. Consider 50 mutual funds, each of which has a 50% chance of beating the market during a given year. Use simulation to estimate the probability that over a 13-year period the best of the 50 mutual funds will beat the market for at least 11 out of 13 years. This probability turns out to exceed 40%, which means that the best mutual fund beating the market 11 out of 13 years is not an unusual occurrence after all.Play Things is developing a new Lady Gaga doll. The company has made the following assumptions: The doll will sell for a random number of years from 1 to 10. Each of these 10 possibilities is equally likely. At the beginning of year 1, the potential market for the doll is two million. The potential market grows by an average of 4% per year. The company is 95% sure that the growth in the potential market during any year will be between 2.5% and 5.5%. It uses a normal distribution to model this. The company believes its share of the potential market during year 1 will be at worst 30%, most likely 50%, and at best 60%. It uses a triangular distribution to model this. The variable cost of producing a doll during year 1 has a triangular distribution with parameters 15, 17, and 20. The current selling price is 45. Each year, the variable cost of producing the doll will increase by an amount that is triangularly distributed with parameters 2.5%, 3%, and 3.5%. You can assume that once this change is generated, it will be the same for each year. You can also assume that the company will change its selling price by the same percentage each year. The fixed cost of developing the doll (which is incurred right away, at time 0) has a triangular distribution with parameters 5 million, 7.5 million, and 12 million. Right now there is one competitor in the market. During each year that begins with four or fewer competitors, there is a 25% chance that a new competitor will enter the market. Year t sales (for t 1) are determined as follows. Suppose that at the end of year t 1, n competitors are present (including Play Things). Then during year t, a fraction 0.9 0.1n of the company's loyal customers (last year's purchasers) will buy a doll from Play Things this year, and a fraction 0.2 0.04n of customers currently in the market ho did not purchase a doll last year will purchase a doll from Play Things this year. Adding these two provides the mean sales for this year. Then the actual sales this year is normally distributed with this mean and standard deviation equal to 7.5% of the mean. a. Use @RISK to estimate the expected NPV of this project. b. Use the percentiles in @ RISKs output to find an interval such that you are 95% certain that the companys actual NPV will be within this interval.
- The IRR is the discount rate r that makes a project have an NPV of 0. You can find IRR in Excel with the built-in IRR function, using the syntax =IRR(range of cash flows). However, it can be tricky. In fact, if the IRR is not near 10%, this function might not find an answer, and you would get an error message. Then you must try the syntax =IRR(range of cash flows, guess), where guess" is your best guess for the IRR. It is best to try a range of guesses (say, 90% to 100%). Find the IRR of the project described in Problem 34. 34. Consider a project with the following cash flows: year 1, 400; year 2, 200; year 3, 600; year 4, 900; year 5, 1000; year 6, 250; year 7, 230. Assume a discount rate of 15% per year. a. Find the projects NPV if cash flows occur at the ends of the respective years. b. Find the projects NPV if cash flows occur at the beginnings of the respective years. c. Find the projects NPV if cash flows occur at the middles of the respective years.A common decision is whether a company should buy equipment and produce a product in house or outsource production to another company. If sales volume is high enough, then by producing in house, the savings on unit costs will cover the fixed cost of the equipment. Suppose a company must make such a decision for a four-year time horizon, given the following data. Use simulation to estimate the probability that producing in house is better than outsourcing. If the company outsources production, it will have to purchase the product from the manufacturer for 25 per unit. This unit cost will remain constant for the next four years. The company will sell the product for 42 per unit. This price will remain constant for the next four years. If the company produces the product in house, it must buy a 500,000 machine that is depreciated on a straight-line basis over four years, and its cost of production will be 9 per unit. This unit cost will remain constant for the next four years. The demand in year 1 has a worst case of 10,000 units, a most likely case of 14,000 units, and a best case of 16,000 units. The average annual growth in demand for years 2-4 has a worst case of 7%, a most likely case of 15%, and a best case of 20%. Whatever this annual growth is, it will be the same in each of the years. The tax rate is 35%. Cash flows are discounted at 8% per year.Based on Babich (1992). Suppose that each week each of 300 families buys a gallon of orange juice from company A, B, or C. Let pA denote the probability that a gallon produced by company A is of unsatisfactory quality, and define pB and pC similarly for companies B and C. If the last gallon of juice purchased by a family is satisfactory, the next week they will purchase a gallon of juice from the same company. If the last gallon of juice purchased by a family is not satisfactory, the family will purchase a gallon from a competitor. Consider a week in which A families have purchased juice A, B families have purchased juice B, and C families have purchased juice C. Assume that families that switch brands during a period are allocated to the remaining brands in a manner that is proportional to the current market shares of the other brands. For example, if a customer switches from brand A, there is probability B/(B + C) that he will switch to brand B and probability C/(B + C) that he will switch to brand C. Suppose that the market is currently divided equally: 10,000 families for each of the three brands. a. After a year, what will the market share for each firm be? Assume pA = 0.10, pB = 0.15, and pC = 0.20. (Hint: You will need to use the RISKBINOMLAL function to see how many people switch from A and then use the RISKBENOMIAL function again to see how many switch from A to B and from A to C. However, if your model requires more RISKBINOMIAL functions than the number allowed in the academic version of @RISK, remember that you can instead use the BENOM.INV (or the old CRITBENOM) function to generate binomially distributed random numbers. This takes the form =BINOM.INV (ntrials, psuccess, RAND()).) b. Suppose a 1% increase in market share is worth 10,000 per week to company A. Company A believes that for a cost of 1 million per year it can cut the percentage of unsatisfactory juice cartons in half. Is this worthwhile? (Use the same values of pA, pB, and pC as in part a.)
- Six months before its annual convention, the American Medical Association must determine how many rooms to reserve. At this time, the AMA can reserve rooms at a cost of 150 per room. The AMA believes the number of doctors attending the convention will be normally distributed with a mean of 5000 and a standard deviation of 1000. If the number of people attending the convention exceeds the number of rooms reserved, extra rooms must be reserved at a cost of 250 per room. a. Use simulation with @RISK to determine the number of rooms that should be reserved to minimize the expected cost to the AMA. Try possible values from 4100 to 4900 in increments of 100. b. Redo part a for the case where the number attending has a triangular distribution with minimum value 2000, maximum value 7000, and most likely value 5000. Does this change the substantive results from part a?You have 5 and your opponent has 10. You flip a fair coin and if heads comes up, your opponent pays you 1. If tails comes up, you pay your opponent 1. The game is finished when one player has all the money or after 100 tosses, whichever comes first. Use simulation to estimate the probability that you end up with all the money and the probability that neither of you goes broke in 100 tosses.Rework the previous problem for a case in which the one-year warranty requires you to pay for the new device even if failure occurs during the warranty period. Specifically, if the device fails at time t, measured relative to the time it went into use, you must pay 300t for a new device. For example, if the device goes into use at the beginning of April and fails nine months later, at the beginning of January, you must pay 225. The reasoning is that you got 9/12 of the warranty period for use, so you should pay that fraction of the total cost for the next device. As before, how-ever, if the device fails outside the warranty period, you must pay the full 300 cost for a new device.
![Practical Management Science](https://www.bartleby.com/isbn_cover_images/9781337406659/9781337406659_smallCoverImage.gif)
![Practical Management Science](https://www.bartleby.com/isbn_cover_images/9781337406659/9781337406659_smallCoverImage.gif)