Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
A venture capitalist named Kevin is considering a pitch from an entrepreneur who has invented a smart toaster, which is a wifi-enabled cooking appliance that alerts users via text-message when their toast is ready. The entrepreneur has submitted an application for a utility patent, which will take a year to process. The investment will cost Kevin $20,000 today, and if the patent is awarded, Keven will receive a payout of $44,000 one year after he makes his investment. If no patent is awarded, however, Keven receives nothing. Kevin believes there is a 60% chance the patent will be awarded. Assume the market interest rate is 10%. a. Calculate Kevin’s net present value of making the investment today, accounting for the uncertainty in the future return. Notice that the costs of making the investment today are certain, but the benefits are uncertain. b. Considering your answer to (a), should Kevin make the investment today? Assume he is risk-neutral when formulating your answer. c. Calculate the net present value (today) of waiting for the patent to be processed before deciding whether to make the investment. Note that in this case, both the costs and the benefits of the investment are uncertain today. d. What is the option value of waiting? Should Kevin make the investment today or wait until next year?
q.a company designs websites for clients. much of the work is done in-house but it finds that it must subcontract i.e.
The demand curve for a product is estimated to be given by the expression: q = 200 − π Calculate the price and the price elasticity of the demand for the following values of the demand: 0, 50, 100, 150 and 200. Repeat these calculations for the case ..
What do temporary changes in the tax code do for incentives? Does this encourage long term planning? Should the government encourage long term planning? Should the Government use tax policy to change behavior?
A movie theatre has a cost function which entails the rent of the commercial building of $50 per day (fixed cost) and a marginal cost of $5 per viewer. Assume now that the movie theatre can give price discounts to students. Explain the concept of pri..
Consider a hypothetical economy without government or international trade. Households spend $0.90 of each additional dollar they earn and save the remaining $0.10. Even when they have no income, they spend $100 in total. Firms plan a total of $150 in..
Suppose an investor’s utility function is given by U(r) = 1/3 E(r) − 1/2 A · V ar(r). Suppose there is a risk-free asset whose return is given by ¯r = 0.03. Suppose there is a single risky asset P that has an expected return of 0.08 and standard devi..
In the medical care sector, the decisions of what services should be produced, how they should be produced, how they should be distributed, and how to allow for growth and innovation must be made. What specific health care resources should be used to..
illustrate what is the change in Clean-Springs' profit-maximizing levels of output, price and profit. Explain in words and with graph.
The Saudi Riyal remains stable in comparison to the US Dollar. What are the reasons for this stability? Explain with examples. Do you expect that current revenue and expenditure patterns will affect the value of the Saudi Riyal in relation to the US ..
Suppose that you close down your coffee shop and sell your coffee maker for $500. If you originally bought the coffee maker for $4,000 and it lost $1,000 because of depreciation (i.e., age and use), the sunk cost of the coffee maker is:
Describe the key differences between simulation models and the models covered in previous modules, not only from the perspective of their applications, but also from the perspective of computing/solving the models
Suppose in Fiscalville there is no tax on the first $10,000 of income, but a 20 percent tax on earnings between $10,000 and $20,000 and a 30 percent tax on income between $20,000 and $30,000. Any income above $30,000 is taxed at 40 percent. If your i..
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd