The heartless cheater wants to buy a gift worth Php 30,000 for the weird guy, which will give her temporary happiness, without considering the feelings of her true/legal partner. It is believed that the evil gift will bring an additional income of Php 8,500 per year. The value of the evil gift after 5 years will be Php 4,500. The heartless cheater asks you if the idea is acceptable or viable. What would be your answer? Note that the interest rate is 15% Use: 1. ROR Method 2. Present Worth Method 3. Future Worth Method

The heartless cheater wants to buy a gift worth Php 30,000 for the weird guy, which will give her temporary happiness, without considering the feelings of her true/legal partner. It is believed that the evil gift will bring an additional income of Php 8,500 per year. The value of the evil gift after 5 years will be Php 4,500. The heartless cheater asks you if the idea is acceptable or viable. What would be your answer? Note that the interest rate is 15% Use: 1. ROR Method 2. Present Worth Method 3. Future Worth Method

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Scenario 2 Tess and Lex earn $40,000 per year and all earnings are spent on consumption (c). Tess and Lex both have the utility function (sqrt c) . Both could experience an adverse event that results in earnings of $0 per year. Tess has a 1% chance of experiencing an adverse event and Lex has a 12% chance of experiencing an adverse event. Tess and Lex are both aware of their risk of an adverse event. Refer to Scenario 2 If an insurance company knows the probability of Tess experiencing an adverse event, what is the actuarially fair premium charged to Tess per $1 of benefit? Round to two decimal places
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PLEASE USE EXCEL AND SHOW FORMULAS: A new engineer is evaluating whether to use a larger diameter pipe for a water line. The pipe will cost $376,183 more initially but will reduce pumping costs. The optimistic, most likely, and pessimistic projections for annual savings are $30,000, $20,000, and $5000, with respective probabilities of 20%, 50%, and 30%. The interest rate is equally likely to be 6% or 8% (use 7% as most likely), and the water line should have a life of 40 years. a) Find the PW for the pessimistic case, the most likely case, and the optimistic case. Then determine the Expected PW based on these. b) Find the expected annual savings and the expected interest rate. Determine the Expected PW based on these.
You are a hotel manager and you are considering four projects that yield different payoffs, depending upon whether there is an economic boom or a recession. The potential payoffs and corresponding payoffs are summarized in the accompanying table. Recession (50%) -$ 10 $ 20 -$ 30 $ 50 Boom (50%) $ 20 Project A B -$ 10 $ 30 $ 50 If a manager adopted both projects A and B simultaneously, the varlance in returns assoclated with this joint project would be Multiple Choice 0. 10. 30. 50.
Rachel, Monica, and Phoebe are roommates; each has 10 hours of free time you could spend cleaning your apartment. You all dislike cleaning, but you all like having a clean apartment: each person’s payoff is the total hours spent (by everyone) cleaning, minus a number 1/2 times the hours spent (individually) cleaning.That is, ui(s1, s2, s3) = s1 + s2 + s3 -1/2si Assume everyone chooses simultaneously how much time to spend cleaning. a. Find the Nash equilibrium. b. Find the Nash if the payoff for each player is: ui(s1, s2, s3) = s1 + s2 + s3 − 3si Is the Nash equilibrium Pareto efficient? If not, can you find an outcome in which everyone is better off than in the Nash equilibrium outcome?
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Your Utility function of U = 5, where I is income. You receive an income of 1600 each week from your laundry delivery service in which you face a 50% chance each week of an accident that costs you $700. Calculate your expected income and expected utility.
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Adam is considering what skills to study in online school. Her utility function is based on the income she earns, and is defined by U(I) = I0.8. If she learns the skill of SPSS, she will earn $145,000 per year with probability 1. If she learns the skill of Tableau, she will earn $300,000 per year with probability 0.6 (assuming that she gets the certificate) and $30,000 with probability 0.4 (if she learns without earning a certificate and she has to find a waiter job). a. Is she risk averse, risk neutral, or risk loving? Explain.b. Write out the equation for her expected utility for each skill. c.Which skill will she learn? Show your work. d.Suppose someone offers her insurance for the possibility that she does not get a Tableau certificate. This insurance will provide her an amount of income in addition to the waiter job wages that makes her indifferent between learning SPSS and Tableau. What is this amount, and what is the cost of the insurance? (note: many possible answers)
Consider the diagram: FF (10% interest rate) FF (78% interest rate) Julia's 100 endowment 38 36 Julia's IC (higher utility) Julia's IC Julia's IC (through point F) Julia's IC (lower utility) 56 58 Consumption now (S) 35 91 Consumption later ($)
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