EBK PRACTICAL MANAGEMENT SCIENCE
5th Edition
ISBN: 9780100655065
Author: ALBRIGHT
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 4, Problem 84P
Summary Introduction
To determine: The adjusted winner solution for the merger example and also show that is a Pareto optimal.
Linear programming:
It is a mathematical modeling procedure where a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Consider Bruno who manages an underwriting team in an insurance firm. Recently, the management of Bruno’s firm informed him of their decision to create a new risk assessment team, consisting of data scientists with machine learning expertise, and reduce the size of Bruno’s underwriting team. Bruno’s underwriting team will now work with the new risk assessment team in order to determine whether to provide insurance to applicants.
Graphically illustrate the impact of the management’s restructuring decision on the firm’s production function. Your diagram should have the amount of human intelligence on the horizontal axis and the number of decisions on whether to provide insurance on the vertical axis. Fully label your diagram. Note that there are no actual numbers given in this question: you may make them up or simply use appropriate notations. Briefly explain the key information of your diagram.
Consider a project with the following cash flows: year 1, 2$400; year 2, $200; year 3, $600; year 4, 2$900; year 5, $1000; year 6, $250; year 7, $230. Assume a discount rate of 15% per year.a. Find the project’s NPV if cash flows occur at the ends of the respective years.b. Find the project’s NPV if cash flows occur at the beginnings of the respective years.c. Find the project’s NPV if cash flows occur at the middles of the respective years.
Ginger owns a property worth $500,000. She owes $220,000
on her mortgage. How much equity does she have in the
property?
44%
82%
56%
27%
Chapter 4 Solutions
EBK PRACTICAL MANAGEMENT SCIENCE
Ch. 4.2 - Prob. 1PCh. 4.2 - Prob. 2PCh. 4.2 - Prob. 3PCh. 4.2 - Prob. 4PCh. 4.2 - Prob. 5PCh. 4.2 - Prob. 6PCh. 4.3 - Prob. 7PCh. 4.3 - Prob. 8PCh. 4.3 - Prob. 9PCh. 4.3 - Prob. 10P
Ch. 4.3 - Prob. 11PCh. 4.3 - Prob. 12PCh. 4.4 - Prob. 13PCh. 4.4 - Prob. 14PCh. 4.4 - Prob. 15PCh. 4.4 - Prob. 16PCh. 4.4 - Prob. 17PCh. 4.4 - Prob. 18PCh. 4.4 - Prob. 19PCh. 4.5 - Prob. 20PCh. 4.5 - Prob. 21PCh. 4.5 - Prob. 22PCh. 4.5 - Prob. 23PCh. 4.5 - Prob. 24PCh. 4.5 - Prob. 25PCh. 4.6 - Prob. 26PCh. 4.6 - Prob. 27PCh. 4.6 - Prob. 28PCh. 4.6 - Prob. 29PCh. 4.7 - Prob. 30PCh. 4.7 - Prob. 31PCh. 4.7 - Prob. 32PCh. 4.7 - Prob. 33PCh. 4.7 - Prob. 34PCh. 4.7 - Prob. 35PCh. 4.7 - Prob. 36PCh. 4.7 - Prob. 37PCh. 4.7 - Prob. 38PCh. 4.7 - Prob. 39PCh. 4.7 - Prob. 40PCh. 4.8 - Prob. 41PCh. 4.8 - Prob. 42PCh. 4.8 - Prob. 43PCh. 4.8 - Prob. 44PCh. 4 - Prob. 45PCh. 4 - Prob. 46PCh. 4 - Prob. 47PCh. 4 - Prob. 48PCh. 4 - Prob. 49PCh. 4 - Prob. 50PCh. 4 - Prob. 51PCh. 4 - Prob. 52PCh. 4 - Prob. 53PCh. 4 - Prob. 54PCh. 4 - Prob. 55PCh. 4 - Prob. 56PCh. 4 - Prob. 57PCh. 4 - Prob. 58PCh. 4 - Prob. 59PCh. 4 - Prob. 60PCh. 4 - Prob. 61PCh. 4 - Prob. 62PCh. 4 - Prob. 63PCh. 4 - Prob. 64PCh. 4 - Prob. 65PCh. 4 - Prob. 66PCh. 4 - Prob. 67PCh. 4 - Prob. 68PCh. 4 - Prob. 69PCh. 4 - Prob. 70PCh. 4 - Prob. 71PCh. 4 - Prob. 72PCh. 4 - Prob. 73PCh. 4 - Prob. 74PCh. 4 - Prob. 75PCh. 4 - Prob. 76PCh. 4 - Prob. 77PCh. 4 - Prob. 78PCh. 4 - Prob. 79PCh. 4 - Prob. 80PCh. 4 - Prob. 81PCh. 4 - Prob. 82PCh. 4 - Prob. 83PCh. 4 - Prob. 84PCh. 4 - Prob. 85PCh. 4 - Prob. 86PCh. 4 - Prob. 87PCh. 4 - Prob. 88PCh. 4 - Prob. 89PCh. 4 - Prob. 90PCh. 4 - Prob. 91PCh. 4 - Prob. 92PCh. 4 - Prob. 93PCh. 4 - Prob. 94PCh. 4 - Prob. 95PCh. 4 - Prob. 96PCh. 4 - Prob. 97PCh. 4 - Prob. 98PCh. 4 - Prob. 99PCh. 4 - Prob. 100PCh. 4 - Prob. 101PCh. 4 - Prob. 102PCh. 4 - Prob. 103PCh. 4 - Prob. 104PCh. 4 - Prob. 105PCh. 4 - Prob. 106PCh. 4 - Prob. 107PCh. 4 - Prob. 108PCh. 4 - Prob. 109PCh. 4 - Prob. 110PCh. 4 - Prob. 111PCh. 4 - Prob. 112PCh. 4 - Prob. 113PCh. 4 - Prob. 114PCh. 4 - Prob. 115PCh. 4 - Prob. 116PCh. 4 - Prob. 117PCh. 4 - Prob. 118PCh. 4 - Prob. 119PCh. 4 - Prob. 120PCh. 4 - Prob. 121PCh. 4 - Prob. 122PCh. 4 - Prob. 123PCh. 4 - Prob. 124PCh. 4 - Prob. 125PCh. 4 - Prob. 126PCh. 4 - Prob. 127PCh. 4 - Prob. 128PCh. 4 - Prob. 129PCh. 4 - Prob. 130PCh. 4 - Prob. 131PCh. 4 - Prob. 132PCh. 4 - Prob. 133PCh. 4 - Prob. 134PCh. 4 - Prob. 135P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- Suppose that you want to invest $10,000 in the stock market by buying shares in one of two companies: A and B. Shares in company A though risky, could yield a 50% return on investment during the next year. If the stock market if conditions are not favorable (bear market) the stock may lose 20% of it value. Company B provides safe investments with 15% return in a bull market and only 5% in a bear market Ali the applications you have consulted are predicting a 60% chance for a bull market and 40% for a bear market. Where you invest your money? Construct a decision tree.arrow_forwardYou have recently won the super jackpot in the WashingtonState Lottery. On reading the fine print, you discover that you have the following twooptions:a. You will receive 31 annual payments of $250,000, with the first payment beingdelivered today. The income will be taxed at a rate of 28 percent. Taxes will bewithheld when the checks are issued.b. You will receive $530,000 now, and you will not have to pay taxes on this amount.In addition, beginning one year from today, you will receive $200,000 each yearfor 30 years. The cash flows from this annuity will be taxed at 28 percent.Using a discount rate of 7 percent, which option should you select?arrow_forwardI have a accounting firm and someone from real estate wants to invest and give my firm all her accounts but in return wants equal ownership of my firm, but i dont want to giver her equal ownership but wants her to invest in my firm , what are alternatives that i can offer her without giving her half ownership. Elaboratearrow_forward
- Consider a firm run by an “incumbent” manager. Suppose the incumbent manager has the opportunity to invest in one of two different projects, Project 1 or Project 2. The incumbent manager has a higher ability in managing Project 1 rather than Project 2. Also, if theincumbent is fired by shareholders, she is replaced by an “alternative” manager whose ability to manage Project 1 is lower than the incumbent’s ability. Suppose the investment in a project is irreversible, and the shareholders’ choice of the incumbent manager salary (as well as their decision on whether to fire her) is taken afterthe investment is made. Also, assume the incumbent manager has a stake in the firm she runs, but she does not fully control it. Questions:(a) Suppose none of the projects gives the manager a direct utility. According to Shleifer and Vishny (1989), which of the two projects should the incumbent manager choose? What is the economic rationale behind this choice? Explain. (b) Suppose the incumbent…arrow_forwardLorna owns a home that is worth $385,000. She has a mortgage with a balance of $112,000. Calculate her equity in the home. $497,000 $76,000 $273,000 $245,000arrow_forwardAn analyst has collected the following information regarding Gilligan Grocers: Earnings before interest and taxes (EBIT) = $700 million. Earnings before interest, taxes, depreciation and amortization (EBITDA) = $850 million. Interest expense = $200 million. The corporate tax rate is 40 percent. Depreciation is the company’s only non-cash expense or revenue.What is the company’s net cash flow?arrow_forward
- In the problem on excel : 1.What are the decision variables 2.What is the objective functions 3. What are the constraints and explainarrow_forwardA business student has $3,500 available from a summer job and has identified three potential stocks in which to invest. The cost per share and expected return over the next two years are given in the table. Complete parts a and b. A $12 $8 Stock Price/share Return/share B $16 $5 A. Amount invested in stock A B. Amount invested in stock B C. Return for each stock D. Amount invested in stock C E. Price of each stock C $25 $11 a. Identify the decision variables, objective function, and constraints in simple verbal expressions. Identify the decision variables. Select all that apply.arrow_forward2. An analyst determines the intrinsic value of a stock to be equal to 255 lei. If the stock's market price is 285 lei, the stock is most likely: a) overvalued b) undervalued c) fairly valuedarrow_forward
- West Company’s contribution format income statement for March 2020 is givenbelow:Sales (15,000 units X $30 per unit) $450,000Variable expenses 315,000Contribution margin 135,000Fixed expenses 90,000Net operating income $ 45,000The industry in which West Company operates is quite sensitive to regularmovements in the economy. Thus, profits vary considerably from year to yearaccording to general economic conditions. The company has a large amount ofunused capacity and is studying ways of improving profits.Required:The company CEO has asked you as a Senior Manager to evaluate the belowsituations with recommendations:1- New equipment has come onto the market that would allow WestCompany to automate a portion of its operations. Variable expenseswould be reduced by $9 per unit. However, fixed expenses wouldincrease to a total of $225,000 each month. How Net Income wouldappear if the new equipment were purchased. As a Senior Manager,what factor/s would be paramount in your mind deciding…arrow_forwardA small strip-mining coal company is trying to decide whether it should purchase or lease a new clamshell. If purchased, the “shell” will cost $152,500 and is expected to have a $50,000 salvage value after 6 years. Alternatively, the company can lease a clamshell for only $16,000 per year, but the lease payment will have to be made at the beginning of each year. If the clamshell is purchased, it will be leased to other strip-mining companies whenever possible, an activity that is expected to yield revenues of $9,000 per year. If the company’s MARR is 13% per year, should the clamshell be purchased or leased on the basis of a future worth analysis? Assume the annual M&O cost is the same for both options. The future worth when purchased is $ The future worth when leased is $arrow_forwardConsider an investment project with the following cash flows: N Cash Flow 0 -$5,0001 $02 $4,8403 $1,331ComputcthelRRforthisinvestment.lsthisprojectacceptablcatMARR = 10%?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,