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miss Akunina [59]
2 years ago
12

Two companies, Rothko, LLC, and Calder & Co., are racing each other to be the first to apply new deep-water drilling technol

ogies to an oil deposit. If Rothko, LLC gets to the oil first, its stock will increase by 63%, and Calder & Co.\'s stock price will not change at all. If Calder & Co. get to the oil deposit first, its stock price will increase by 37%, and Rothko\'s stock price won\'t change at all. These are the only two companies trying to tap the deposit.
The chance that Calder & Co. arrives first is 63%.

NOTE: All answers should be to two decimal places.


1.What is the expected payoff of investing $1000 in Rothko, LLC?2.What is the expected payoff of investing the same amount in Calder & Co.?3.What is the expected payoff of investing $500 in Calder & Co. and $500 in Rothko, LLC?
Business
1 answer:
wolverine [178]2 years ago
7 0

Answer:

Consider the following calculations

Explanation:

Expected pay off of investing 1000 in Rothko,LLC= probability of getting oil stock *increase in value ofstock= .37* 63% of 1000

= .37*630= 233.1

Similarly

Expected pay off of investing 1000 in Calder & co = .63* 37% of 1000= .63* 370= 233.1

Of investing 500 in each

Expected pay off= .37 * 63% of 500 + .63* 37% of 500

= .37* 315 + .63* 185= 233.1

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REI has a 100% satisfaction guarantee on its items. It allows customers to return products up to one year after purchase. This i
Vanyuwa [196]

Answer: risk

Explanation: 100% satisfaction guarantee is a statement that if a customer of a product (or service) is not satisfied with the item purchased, then the producer will offer a full refund back to the customer. In this case REI allows this option for a period of up to 1 year after the sale was made.

REI utilises this option in an effort to reduce costs attributed to risk. For customers, this is a powerful tool as they are allowed to try the product, while knowing that if they don't like it then they can return it for a full refund. For REI, it increases customer trust as it allows customers to believe that the product is worth the sales price. It also reduces risk as REI is able to test the product out to actual customers and get a feel for if they like it, and what can be improved if needed.

3 0
2 years ago
Uptown industries just decided to save $3,000 a quarter for the next three years. The money will earn 2.75 percent, compounded q
Ber [7]

Answer:

Uptown industries have to deposit today $4,145.

Explanation:

To find the final capital at the end of the third year, we use the compound interest formula:

Final Capital (FC)= Initial Capital (IC)*[(1+interest(i))]^(number of periods(n))

FC=$3000*[1+2.75%]^(12)

FC= $4,145.35

Then, Uptown industries have to deposit today $4,145.

6 0
2 years ago
John Rawls owns and operates Philosophical Consulting, Inc. During 2019 and 2020 he made the following purchases of assets for u
jekas [21]

Answer:

The right solution is "600000".

Explanation:

The given values are:

Cost of office furniture,

= $100,000

Cost of the computer system,

= $500,000

  • The changed MACRS enables a company to reduce the mortgage balance of such deteriorating properties over time.
  • Throughout the very first years, MACRS permits quicker depreciation although subsequently slows down depriving. This seems to be fantastic for corporations from a tax point of view.

Now,

The cost recovery deduction will be:

=  Office \ furniture+Computer \ system

On substituting the values, we get

=  100000+500000

=  600000

6 0
2 years ago
Briefly describe the​ trade-offs involved in the following decision.​ Specifically, what are the opportunity costs associated wi
vekshin1

Answer:

D. All of the above.

Explanation:

In economics, opportunity cost is the alternative forgone. For example, if two goods X and Y with prices $2 and $3 respectively are compared and an individual chooses to buy X instead of Y, the opportunity cost is the good Y itself that is forgone and not $3 which the price of Y.

Opportunity cost can also be seen as benefits an individual forgo in order to choose an alternative over another.

Therefore, individual pair comparison of each of the following statements opportunity cost to Frank's decision to reduce his weight:

A. His opportunity cost is the alternative uses of time spent exercising.

B. His opportunity cost is the forgone satisfaction of consuming foods that are not part of his diet plan.

C. Assuming exercise is not leisure comma he trades consumption of current leisure for future health.

I wish you the best.

4 0
2 years ago
From each paycheck of your afterschool job, you’re able to save $45 toward the coat. You get paid twice a month. How many months
RoseWind [281]

Answer:4

Explanation:The total in 4 months would equal 360

6 0
2 years ago
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