Team will use live audience in previewing

Assignment Help Financial Management
Reference no: EM132014509

A local TV studio is deciding on a possible new TV show. A successful TV show earns the station about $550,000, but if it is not successful, the station loses about $200,000. Of the previous 200 shows reviewed by the local TV station, 75 turned out to be successful shows, and 125 turned out to be unsuccessful TV shows. For a cost of $65,000, the local station can hire a market research team; this team will use a live audience in previewing the TV pilots to determine whether the viewed TV show will be successful. Past records show that market research predicts a successful TV show about 85% of the time that the TV show was actually successful and predicts an unsuccessful show 75% of the time that it turned out to unsuccessful. How should the local TV studio maximize its profit?

Reference no: EM132014509


Write a Review


Financial Management Questions & Answers

  Given the current financials in market watch

Given the current financials in market watch, would you invest in FaceBook? Specify key variables on which your decision is based. Explore various tabs namely, overview, profile, news, and so on. Summarize one of the tabs that you understood most. Yo..

  Find discounted payback period and average accounting return

Find the Project Cash Flow (Use Cash Flow From Assets [CFFA]) in Year 3. Discounted Payback Period, Average Accounting Return.

  Expected rate of return on the market

The risk free rate is 5% and the expected rate of return on the market is 12%. According to the CAPM, is Duff fairly priced, underpriced, or overpriced? Explain

  Risk of investing in primary market vs. the secondary market

What would be the risk of investing in the primary market (especially IPO’s) vs. the secondary market? And what might this imply about returns?

  Make-versus-purchase situation for component

A night vision goggle manufacturer is evaluating a make-versus-purchase situation for a component used in its low-priced products.

  What proceeds does shelly katz receive

Ron Prentice bought goods from Shelly Katz. What proceeds does Shelly Katz receive?

  What is the present value of new drug

You work for a pharmaceutical company that has developed a new drug. What is the present value of the new drug if the interest rate is 11 % per? year?

  How much will each annual payment be

How much will each annual payment be?

  Hedge the exposure of a variable interest rate loan

The financial analysts at Bearings and Nuts Limited a local conglomerate wants hedge the exposure of a variable interest rate loan it negotiated last year. Due to an uncertain economic environment, the fluctuation of local interest rate might affect ..

  Cost of leasing the laptop over buying it? outright

What is the cost of leasing the laptop over buying it? outright?

  What is the effective annual yield

PK Software has 8 percent coupon bonds on the market with 23 years to maturity. The bonds make semiannual payments and currently sell for 109.25 percent of par. What is the current yield on PK's bonds?  What is the effective annual yield?

  Library can withstand to keep honoring financing payments

What is the maximum yearly percentage loss in visitors that the library can withstand to keep honoring the financing payments

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd