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If a better motor fluid is used, the capital cost will increase by 350, but fluid losses will be reduced through the 30 year life of the project. The optimistic, most likely, and pessimistic projections are 35, 30 and 23. All estimates are inflation adjusted and the real MARR is 4%.
a. What is the NPV under the "most optimistic" projection of annual savings? Under "most likely" projection savings? Under "Pessimistic assumption"?
b. Does the expected value of the NPV equal the NPV for the most likely outcome? why or why not?
c. Using the beta probability distribution to calculate the expected value of NPV. Attach a probability of 2/3 to the most likely outcome and a probability of 1/6 to both the pessimistic and optimistic outcomes.
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If the spot rate for Euro is .81 Euro is equal to 1 US $, and the annual interest rate on fixed rate one-year deposits of Euro is 2.5% and for US$ is 1.5%, what is the nine-month forward rate for one Euro in terms of dollars? Assuming the same intere..
Write a brief overview concerning stock valuation. A brief explanation of the legal rights and privileges of common stockholders.
What is the payback period for a project with an initial investment of $180,000 that provides annual cash inflow of $40,000 for the first three years and $25,000 per year for years four and five, and $50,000 per year for years six through eight?
In January 2015, Yahoo announced a plan to spin off tax-free its nearly $40 billion of holdings in Alibaba. Discuss advantages and disadvantages of a spin-off from the standpoints of both the company and its investors.
Consider options on Microsoft stock. Suppose that there are call options with a strike price of $10 and put options with a strike price of $10, both with the expiration date of January 16th.
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