XELakeshore Manufacturing must decide whether to set their production capacity nextquarter to small, medium or large while hoping that a looming employee strike will notactually materialize. Their projected annual profits $('000) depend on the event of thestrike as follows:Part ANo strike Strike440350-2800.2Small430Medium460Large740Probability 0.81. What is the best expected payoff and the corresponding decision using the ExpectedMonetary Value (EMV) approach?$('000)Part BLarge2. What is the expected value of perfect information (EVPI)?$('000)Lakeshore can hire a labour researcher for a $10,000 to obtain further information onthe possibility of a strike. The researcher's report will either be favourable orunfavourable. The probability estimates are:

Answer:- Given data table No strike strike Small 430 440 Medium 460 350 Large 740 -280…

Answered: X E Lakeshore Manufacturing must decide…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Suppose that you just bought a painting for $1million. You plan to sell it exactly one year fromnow. You don’t know what the exact price will bewhen you sell. Nevertheless, you believe thatthere’s a 65% chance that you can sell it for$1.2million, and a 35% chance that you can sell itfor only $900,000. What is your expected gain orloss for this investment?
Straight-line DepreciationBook value is the value of an asset that a company uses to create its balance sheet.Some companies depreciate their assets using straight-line depreciation so that thevalue of the asset declines by a fixed amount each year. The amount of the declinedepends on the useful life that the company assigns to the asset. Suppose that acompany just purchased a fleet of new cars for its sales force at a cost of $31,500 percar. The company chooses to depreciate each vehicle using the straight-line methodover 7 years. This means that each car will depreciate by +31,500 7 = +4500 per year.(a) Write a linear function that expresses the book value V of each car as a functionof its age, x.(b) Graph the linear function.(c) What is the book value of each car after 3 years?(d) Interpret the slope.(e) When will the book value of each car be $9000?[Hint: Solve the equation V1x2 = 9000.]
The accompanying data represent the annual rates of return of two companies' stock for the past 12 years. Complete parts (a) through (k). O A. OB. 0.50- 0.50- 0.00- 0.00- -0.50- -0.50- -0.3 RR of Company 2 0.0 0.3 -0.3 0.0 0.3 RR of Company 1 OC. 0.30- 0.50- 0.00- 0.00- -0.30- -0.50- o.0 0'5 0.0 0.3 -0.5 RR of Company 2 0.5 -0.3 RR of Company 1 (b) Determine the correlation coefficient between rate of return of Company 1 and Company 2. The correlation coefficient is 0.966. (Round to three decimal places as needed.) (c) Based on the scatter diagram and correlation coefficient, is there a linear relation between rate of return of Company 1 and Company 2? Yes No (d) Find the least-squares regression line treating the rate of return of Company 1 as the explanatory variable. y=x+O (Round to four decimal places as needed.) RR of Company 1 RR of Company 1 RR of Company 2 RR of Company 2
4. Along with interest rates, life expectancy is a component in pricing financial annuities. Suppose that you know that last year average life expectancy was 77 years for your annuity holders. Now you want to know if your clients this year have a longer life expectancy, on average, so you randomly sample n=20 of your recently deceased annuity holders to see actual age at death. Using a 5% level of significance, test whether or not the new data shows evidence of your annuity holders now live longer than 77 years, on average. The data below are the sample data (in years of life): (78,75,83,81,81,77,78,79,79,81,76,79,77,76,79,81,73,74,78,79) a) Does this sample indicate that life expectancy has increased? Test an appropriate hypothesis and state your conclusion (use a 5% level of significance). Be sure to check the necessary assumptions and conditions before conducting your test. b) Construct A 90% confidence interval for the true average age of death for the population of your annuity…
The selling prices of mutual funds change daily. In order to study these changes, a sample of mutual funds was examined and the daily changes in price are listed below. (Round answers to 3 decimal places) 0.32, -0.17, 0.26, -0.03, -0.01, 0.18, 0.33, 0.28, 0.02, -0.29, -0.08, 0.12, 0.07, 0.03, 0.28 a) Using a calculator find Q1, Q3, median and IQR b) Determine the lower and upper fences. (Show work) c) Identify the outliers (if any) in this set
When it is sunny, Joe's ice cream truck generates a profit of $547 per day, when it is not sunny, the profit is $250 per day, and when the truck is not out there selling ice cream, Joe loses $120 per day. Suppose 8% of a year Joe's truck is on vacation, and 86% of a year the truck is selling ice cream on sunny days, what is the expected daily profit the truck generates over a year? Enter answer as a decimal rounded to TWO digits after the decimal point.
Suppose that you have the following payoff table: State of Nature Decision 51 S2 di 250 100 d2 100 -50 150 Suppose that p-0.75 would make you indifferent between a guaranteed payoff of 150 and the lottery. Find your risk premium for the payoff of 150. The answer has no decimals.
Compute the NPV statistic for Project Y if the appropriate cost of capital is 12 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) Project Y Time: 1 2 3 4 Cash flow: -$8,000 $3,350 $4,180 $1,520 $300
The following data were taken from Miller Company's balance sheet: Dec. 31, Year 2 Dec. 31, Year 1 Total liabilities $150,000 $105,000 Total stockholders' equity 75,000 60,000 a. Compute the ratio of liabilities to stockholders' equity. Round your answers to one decimal place. Liabilities toStockholders' Equity 12/31/Year 2: fill in the blank 1 12/31/Year 1: fill in the blank 2 b. Has the creditors' risk increased or decreased from December 31, Year 1, to December 31, Year 2?
A proposed project has the following cash flow estimates.Assuming statistically independent cash flows, a normally distributed net present value, and a minimum attractive rate of return of 15%, determine the following. For the following questions, employ an analytical solution: a. the mean and standard deviation of net present value. b. the probability that the net present value is negative. c. the probability that the net present value is greater than $1,000,000. Assume the initial investment and annual receipts are normally distributed. d. Using a Monte Carlo simulation with 10,000 iterations, estimate the probability that the present worth is negative.
Airodyne Wind, Inc., has wind tunnels that can operate vertically or horizontally for evaluating the effects of air flow on a component's PCB response and reliability. The company expects to build a new tunnel that will be outfitted with multiple sensor ports. For the estimates below, calculate the equivalent annual cost of the project. First Cost Replacement Cost, Year 2 AOC per Year Salvage Value Life, Years Interest Rate The equivalent annual cost of the project is $ $-250,000 $-330,000 $-940,000 $280,000 5 11%
3. Aquasystem performed a make/buy analysis to for making a new water filters. The filter sells for $50 that will require equipment that will cost $200,000 and $25,000 annual operating cost comprise the fixed cost. The variable cost is $20 per filter. The equipment has a 5 year life, no salvage value, and the MARR is 6% per year. The decision to make the filter was based on breakeven point and the historical sales level of 500 filter per year. a. Determine the breakeven point b. An engineer investigated that a supplier can make the filter for $30 each. Determine whether Aquasystem should make or buy the filters.

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