Answer:
the breakeven cash inflow for the project is $131474
Explanation:
given data
cost of capital = 10 percent
initial investment = $1,000,000
useful life = 15 year
to find out
the breakeven cash inflow for the project
solution
first we consider here annual cash inflows that is = x
now break even point is the one at which the net present value of the project = 0
so we can say that here
Present value of cash inflows - Present value of cash outflows = 0 .................1
here we know Present value of cash inflows = x × PVAF ( 10%,15 years)
Present value of cash inflows = x × 7.6060
put value in equation 1 we get
x × 7.6060 - $1,000,000 = 0
solve and we get x
x = 
x = $131474
so the breakeven cash inflow for the project is $131474
Parametric estimation is a techniques that uses a statistical relationship to calculate cost or duration based on historical data and other project parameters
Parametric estimation is a quantitative method (statisitical relationship) used to estimate the project cost, resources, and duration based on historical data and other project parameters.
Parametric estimation models are used when:
- There is precedent
- The model is a unit hence can be scaled up
- The parameters required are easily quantifiable
While the other options of this question is incorrect because:
b. grass roots estimating
Cost estimation done by the individuals who will be performing the task being estimated.
c. empirical estimating
Estimation method in which the data is obtained using empirical formulas. It is usually based on an amalgamation of historical data, assumptions, guesses, and personal experience.
d. analogous estimating
Also called top-down estimating, this is a technique that involves comparing previous projects, personal experiences and cursory cross-referencing observed costs to estimate time resources required. This technique is most useful in the absence of quantifiable data.
You can learn more about project estimation at
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Answer:
The number of check-ups in this market would decrease.
Explanation:
This is an example of price ceiling.
Price ceiling refers to a legal maximum price that is set by the government for a commodity to be sold.
Price ceiling set below the equilibrium price will result in a supply shortage as it will be effective and binding, while price ceiling set above the equilibrium price will not affect quantity supplied in the market as it will not be effective and binding.
Since the $40 price of heck-up is below $50 equilibrium price, it will result in shortage supply and the number of check-ups in this market would decrease.
Answer: See explanation column for answer
Explanation:
Caroline
left Right
Anthonio left 6,6 6,3
Right 4,3 5,5
The first digits in both left and right is Anthonio's best response payoff given what Caroline chooses. Also, the second digit on both left and right is Caroline's best response payoff based on what Anthonio chooses.
When Antonio chooses left, Caroline should choose left so as to get a payoff of 6, also when Antonio chooses right, Caroline chooses right to get a payoff of 5. therefore, there is no dominant strategy for Caroline.
The dominant strategy for Antonio occurs
When Caroline chooses left, Antonio will have to choose left to get a payoff of 6, also when Caroline chooses right, Antonio should choose left to get a payoff of 6. So, the dominant strategy for Antonio is to choose left.
The only dominant strategy in this game is for Antonio, to choose left.
b). For Nash Equilibrum, Antonio will have to choose his dominant strategy, that is to choose left, which will make Caroline is to choose left so as to get a payoff of 6. So, the Nash equilibrium is for Antonio to choose <u>left </u>and caroline chooses<u> left</u> too
Answer:
$1.55
Explanation:
Interest rate parity = (1+Rh) / (1+Rf) = F1 / S0
Rh = rate on home currency here US is home 3% p.a = 3%/4 = 0.75%
Rf= rate on foreign currency here Germany 3.5% p.a = 3.5%/4 = 0.875
F1 = Forward rate
, S0= Spot market rate
So, (1+0.0075) / (1+0.00875) = F1 / 1.56
1.0075/1.00875 = F1 / 1.56
0.998761 = F1 / 1.56
F1 = 0.998761 * 1.56
F1 = 1.55806716
F1 = $1.55
Thus, the 90-day forward rate is $1.55
