What price maximizes profits

Assignment Help Econometrics

Reference no: EM131048004

Your company has a customer who is shutting down a production line, and it is your responsibility to dispose of the extrusion machine. The company could keep it in inventory for possible future product and estimates that the reservation value is $250,000. Your dealings on the secondhand market lead you to believe that there is a 0.4 chance a random buyer will pay $300,000, a 0.25 chance the buyer will pay $350,000, a 0.1 chance the buyer will pay 400,000, and a 0.25 chance it will not sell. If you must commit to a posted price, what price maximizes profits?

Reference no: EM131048004

Questions Cloud

A risk manager self-insured a property risk : A risk manager self-insured a property risk for one year. The following year, even though no losses had occurred, the risk manager purchased property insurance to address the risk.

How does this affect the hr manager''s hiring decisions : How does this affect the HR manager's hiring decisions?

What must the jackpot be before the expected payoff : What must the jackpot be before the expected payoff

Integrated risk management programs : Integrated risk management programs are new to many risk managers and the insurance companies that offer such programs.

What price maximizes profits : Your dealings on the secondhand market lead you to believe that there is a 0.4 chance a random buyer will pay $300,000, a 0.25 chance the buyer will pay $350,000, a 0.1 chance the buyer will pay 400,000, and a 0.25 chance it will not sell. If you ..

Cohesiveness and relationships within an organization : Pay is stressed in several of the cases and some of the content in the reading. How much influence do pay differentials between employees at different levels have on commitment, cohesiveness and relationships within an organization?

Define the meaning of industrial robotics : The purpose of this course is to enable me to: learn about a versatile field of Industry Robotics to upgrade my skills in Electro-technology - define the meaning of Industrial Robotics

The corporate structure of mutual insurers : The corporate structure of mutual insurers has changed over time. Briefly describe several trends that have had an impact on the corporate structure of mutual insurers.

Calculates the internal rate of revenue : A lottery winner can take $6 million now or be paid $600,000 at the end of the next 16 years. The winner calculates the internal rate of revenue (IRR) of taking the money at the end of each year and estimating that the discount rate across this perio..

User Account

All Pages