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Problem 1: A generous university benefactor has agreed to donate a large amount of money for student scholarships. The money can be provided in one lump sum of $12 million in Year 0 (the current year), or in parts, in which $7 million can be provided at the end of Year 1, and another $7 million can be provided at the end of Year 2. Describe your answer for each item below in complete sentences, whenever it is necessary. Show all of your calculations and processes for the following points: Assuming the opportunity interest rate is 8%, what is the present value of the second alternative mentioned above? Which of the two alternatives should be chosen and why? How would your decision change if the opportunity interest rate is 12%? Provide a description of a scenario where this kind of decision between two types of payment streams applies in the "real-world" business setting. Problem 2: The San Diego LLC is considering a three-year project, Project A, involving an initial investment of $80 million and the following cash inflows and probabilities: BUS640 Week 1, Problem 2 Chart Describe your answer for each question in complete sentences, whenever it is necessary. Show all of your calculations and processes for the following points: Describe and calculate Project A's expected net present value (ENPV) and standard deviation (SD), assuming the discount rate (or risk-free interest rate) to be 8%. What is the decision rule in terms of ENPV? What will be San Diego LLC's decision regarding this project? Describe your answer. The company is also considering another three-year project, Project B, which has an ENPV of $32 million and standard deviation of $10.5 million. Project A and B are mutually exclusive. Which of the two projects would you prefer if you do not consider the risk factor? Explain. Describe the coefficient of variation (CV) and the standard deviation (SD) in connection with risk attitudes and decision making. If you now also consider your risk-aversion attitude, as the CEO of the San Diego LLC will you make a different decision between Project A and Project B? Why or why not?
What explains that marginal cost increases as production of a product increases? inreasing cost law decreasing average cost property diminishing marginal product property law of increasing marginals thats just a sample this is not the test jeeff
datafilecontains1500housessoldinstocktoncaliforniaduring1996-1998.thevariabledescriptionsareasfollowsbull sprice
the latest economic news was not very positive. unemployment rates were higher than expected consumer confidence had
toms pizza sells for 5.00 ea and serves an average of 425 customers per week. during a recent sale tom lowered the
The clerk answered, "I can't do that." When the customer started to leave the store, the clerk hastily offered, "However, I am authorized to give you a 40 percent discount on any pair in the store.
The first acre can produce 1000 bushels of wheat, the second acre 900, the third 800, and so on. How much revenue will each acre generate? what are the TR and MR for each acre?
Frederic Bastiat (1801 - 1850) was a French political economist famous for exploding popular economic misconceptions
In the economic theory of the company, we generally discuss only 2-factors, labor and capital, and in short run labor is variable factor and capital is the fixed factor of production.
the next question refers to the followingtotal cost schedule for a competitive
If all the assumptions of perfect competition hold, why would firms in such an industry have little incentive to carry out technological change or much research and development What condition would encourage research and development in competitive..
assume you are a policymaker in washington dc. lobbyists for the preschoolers of america have put pressure on their
select a major course concept that was discussed during our semester and explain how you would apply it to solve a
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