Hollingsworth Machine Group needs a new precision grinding wheel. If 12% is the acceptable return for Hollingsworth, determine the net present worth of one of the best alternatives.
Useful life = 5 years
1. Assume you are the manager of a firm that holds a patent that makes it the exclusive manufacturer of a unique SD card. Based on the estimates provided by a consultant, you know that the relevant demand and cost functions for this SD card are Q = 120 - 2P; C = 20 + 2.5Q2.
What are the levels o...
See the attached file for full problem.
A particular operation at a manufacturing company costs $100,000 per year in labor costs. A proposal is made to automate this operation with a robot. The cost of the robot, the controller, and ancillary systems is $200,000 installed. It has a 10-year life a...
The plant has accumulated savings of $60,000 to acquire a new machine for quality assurance of its products. The new quality control machine cost $80,000. The extra $20,000 needed to acquire the new machine will be finance through a loan at 6% annual interest with the principal ($20,000) due at the ...
2. A machine is under consideration for a new manufacturing process. The interest rate is 10% computed semiannually. Compute the future worth of this alternative:
First cost = $70,000
Semiannual cost = $6,000
Semiannual income = $18,000
Salvage value = $9,000
Life in years = 5
4. You de...
The projected annual sales of new product are projected to be $25,000 the first year and increase by $10,000 per year until $55,000 are sold during the fourth year. Sales are then predicted to decrease by $5,000 per year in the fifth year and each year thereafter until $25,000 are sold in the tenth ...
The demand for good X has been estimated to be ln Qxd = 100 − 2.5 ln PX + 4 ln PY + ln M. The income elasticity of good X is:
What is the value of a preferred stock that pays a perpetual dividend of $150 at the end of each year when the interest ...
Say there is a market for a certain drug consists of domestic (United States) consumers and foreign consumers. The drug's marginal cost is constant at $5 per dose. The demand schedules for both regions are as follows:
Price Quantity Quantity
$60 1,000 200
1. A change in the real money supply can result either from a change in the normal money supply through Federal Reserve policy (holding the price level constant) or from a change in the price level ( holding the normal money supply constant). The change in the nominal money supply causes a shift of ...
A cable company offers two basic packages: sports and kids, and a combined package. there are three different types of users: parents, sports fans, and generalists. The following table show the maximum price that each type of consumer is willing to pay for each package.
Suppose that individual demand for a product is given by QD = 1000 - 5P. Marginal revenue is MR = 200 - 0.4Q, and marginal cost is constant at $20. There are no fixed costs.
a. The firm is considering a quantity discount. The first 400 units can be purchased at a price of $120, and further units...
I) Name the different Web markup languages and explain the differences among them.
II) Name five basic functionalities a Web server should provide.
III) What are some of the policies that e-commerce businesses must develop before launching a site, and explain why must they be developed?
Using the information in the attached file, determine both the shortest amount of time in which the project schedule can be crashed without exceeding $7K and the project critical path that resulted from crashing the project.
An engineer on the verge of retirement has accumulated savings of $200,000 in an account paying 10% compounded quarterly.
1. The engineer wishes to withdraw $7000 each quarter for living expenses. For how long can he/she withdraw that full amount?
Cinema Theater has estimated the following demand functions for its movies:
Daytime demand, Qd = 400 - 50Pd
Nighttime demand, Qn = 200 - 20Pn
The marginal cost of serving another customer is $5 and its fixed costs are $100.
a. If the theater uses third degree price discrimination, what pric...
Suppose the market for toy trains is comprised of the following seven competitors with the indicated market shares:
Little Toot Toys 55% Trains R Us 3%
I Think I Can 25% Thomas Trains 3%
Engines, Inc. 8% The Fa...
At the beginning of the year you take out a loan of $60,000 at 12% annual interest rate compounded monthly. The minimum monthly payment on the first day of each month is 3% of the amount owed or $10, whichever is greater. You may assume that a year is evenly divided into 12 months.
(1) Suppose y...
Please see attachment for question.
If the annual interest rate is r, then the effective interest for a time period of length T with compounding frequency N is given by the following equation (see that attached file for the equation).
(1) Show by algebra that r(T,N) = (1 + rT/N)^N - 1.
Calculate of the price of a call option by binomial tree models and compare the results with the theoretical Black-Scholes formula.
Strike price = $120;
Expiration time = 1 year;
Annual interest rate = 0.05;
Stock volatility = 0.35.
For the initial stock price, S0 = 100.45
Step by step explanation/solution
Brian is taking three courses this semester: economics, statistics, and finance. He has decided to spend 19 hours per week studying (in addition to attending all his classes) and his objective is to maximize his average grade, which means maximizing the total of ...
Two equal sized newspapers have overlap circulation of 10% (10% of the subscribers subscribe to both newspapers.) Advertisers are willing to pay $10 to advertise in one newspaper but only $19 to advertise in both, because they're willing to pay twice to reach the same subscriber. What's the likely...
1) A company is 40% financed by risk- free debt. The interest rate is 10%, the expected market risk premium is 8%, and the beta of the company's common stock is 0.5. What is the company cost of capital? What is the after- tax WACC, assuming that the company pays tax at a 35% rate?
An industry consists of 6 firms, with sales of $100,000, $500,000, $400,000, $300,000, 60,000, and $75,000. Now, suppose the two smallest firms merge.
a. Calculate the four-firm concentration ratio (C4) before the merger. Show your work.
b. Calculate the four-firm concentration ratio (C4) after ...
Please assist in answering the following questions. Please show work in Excel.
Baxter Video Products' sales are expected to increase by 20% from $5 million in 2010 to $6 million in 2011. Its assets totaled $4 million at the end of 2010. Baxter is already at full capacity, so its assets must grow at...
4. The table below shows the payoffs two competing firms, Cole and Martin, face in the decision to reduce their price or retain their current price.
Lower Price Retain Price
Price Cole 70K Martin 80K Cole 40K
The per-week demand for use of the Golden Gate Bridge in San Francisco is P = 12 - 0.15Q during peak traffic periods and P = 9 - 0.1Q during off-peak hours, where Q is the number of cars crossing the bridge in thousands and P is the toll in dollars. If the marginal congestion cost of using the bridg...