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Feliz [49]
3 years ago
7

Fred is thinking of starting a bowling alley near a college campus. Fred is an expected utility maximizer with utility function:

U(W) = 1 – (3000/W), where W is his wealth. Fred’s total wealth is $12,000. With probability 0.2 the alley will be a failure and he’ll lose $9,000, so that his wealth will be just $3,000. With probability 0.8 it will succeed and his wealth will grow to $X. What is the smallest value of X that would be sufficient to make Fred want to invest in the bowling alley rather than have a wealth of $12,000 with certainty?
Business
1 answer:
vlada-n [284]3 years ago
5 0

Answer:

$14,250

Explanation:

To determine what amount of money will make Fred take his chances and invest in this new business, we first have to solve this equation:

  • current wealth - (% chance of losing money x wealth after losing money)

$12,000 - (20% x $3,000) = $12,000 - $600 = $11,400

Then:

$11,400 / 80% of getting wealthier = $14,250

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Gennadij [26K]

Answer:

I have 3 statements

Explanation:

The characteristics of oral narrations are as follows.

1) They can be real or imaginary.

2) They are structured in dialogue, monolog and paragraph.

3) It is written in past tense

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6 0
3 years ago
The classification and normal balance of the drawing account are a.expense, debit balance b.expense, credit balance c.liability,
Elis [28]

Answer:

The answer is D. owner's equity, debit balance

Explanation:

Drawing is the money or goods taken out from business by its owner. This act is usually common in partnership or sole proprietorship.

A drawing is not an expense, rather it is a reduction in owner's equity.

To credit owner's equity means to increase its equity and to debit owner's equity means to decrease or reduce its equity.

Since, drawing is a reduction in owner's equity, we debit owner's equity making option D. the correct answer.

Option A and B are wrong because drawings are not classified as an expense.

Option C is also wrong because a drawing is never a liability.

7 0
3 years ago
How did the apple2 device worked
AlladinOne [14]
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7 0
3 years ago
Tysor Framing's cost formula for its supplies cost is $3,320 per month plus $16 per frame. For the month of July, the company pl
Mila [183]

Answer:

$240 Favorable

Explanation:

Cost as per standard

Fixed per month = $3,320

Per frame = $16

Cost for 1049 frames = $3,320 + ($16 \times 1049)

= $3,320 + $16,784 = $20,104

Actual Supplies cost = $19,864

Spending Variance = Standard Cost - Actual Cost

Spending Variance = $20,104 - $19,864 = $240 Favorable

As we see actual cost is less than standard the variance is favorable.

$240 Favorable

7 0
3 years ago
If the owner of a jewelry store who normally purchased diamonds from a diamond brokerage firm were to open his own diamond broke
Rainbow [258]

Answer:

False

Explanation:

Forward Vertical Integration occurs when a company acquires one of its suppliers.

In this case, we do not have an example of forward vertical integration because the owner of the jewerly store did not purchase the supplier: the diamond brokerage firm. He instead opted to start his own brokerage firm.

The case in the question is an example of forward vertical integration, that occurs when a company moves along the supply chain by starting its own subsidiares instead of buying existing ones.

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3 years ago
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