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miss Akunina [59]
3 years ago
12

Two companies, Rothko, LLC, and Calder & Co., are racing each other to be the first to apply new deep-water drilling technol

ogies to an oil deposit. If Rothko, LLC gets to the oil first, its stock will increase by 63%, and Calder & Co.\'s stock price will not change at all. If Calder & Co. get to the oil deposit first, its stock price will increase by 37%, and Rothko\'s stock price won\'t change at all. These are the only two companies trying to tap the deposit.
The chance that Calder & Co. arrives first is 63%.

NOTE: All answers should be to two decimal places.


1.What is the expected payoff of investing $1000 in Rothko, LLC?2.What is the expected payoff of investing the same amount in Calder & Co.?3.What is the expected payoff of investing $500 in Calder & Co. and $500 in Rothko, LLC?
Business
1 answer:
wolverine [178]3 years ago
7 0

Answer:

Consider the following calculations

Explanation:

Expected pay off of investing 1000 in Rothko,LLC= probability of getting oil stock *increase in value ofstock= .37* 63% of 1000

= .37*630= 233.1

Similarly

Expected pay off of investing 1000 in Calder & co = .63* 37% of 1000= .63* 370= 233.1

Of investing 500 in each

Expected pay off= .37 * 63% of 500 + .63* 37% of 500

= .37* 315 + .63* 185= 233.1

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if you are able to increase the probability of using the company's maintenance services by 5% (from 815 to 86%), then the new CLV = $2,295 + ($122 x 8 x 86%) = $3,134.36

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8 0
3 years ago
If the cpi is 100 in the base year and 108 in the current year, how much did prices rise between the base year and the current y
leva [86]
CPI (Consumer Price Index) is a measure of changes in prices paid by consumers for goods and services. It is used to estimate the changes in prices.
Therefore;

Change in prices = (CPI in current year - CPI in base year)/CPI in base year

Substituting for the values given in the current problem
Changes in prices = (108-100)/100 = 8/100 = 0.08 or 8%.

This shows that prices increased by 8% in the current year compared to the base year.
6 0
3 years ago
On January 1, 2021, Legion Company sold $290,000 of 6% ten-year bonds. Interest is payable semiannually on June 30 and December
stira [4]

Answer:

the bond interest expense for the six months ended June 30, 2021, in the amount of $10,8864

Explanation:

The computation of the interest expense is shown below

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4 years ago
Charles is a stay-at-home parent who lives in New York City and teaches tennis lessons for extra cash. At a wage of $25 per hour
Margaret [11]

Answer:

2.75, elastic.

Explanation:

Measure labor supply elasticity of Individual T's as follows :

              \bf Elasticity=\frac{Percent \;change\;in\;labour\;hr}{\frac{Average\;labour\;hour}{\frac{Percent\;change\;in\;wage\;price}{Average\;wage\;price} } }

                                \bf =\frac{16-6}{\frac{16+6}{\frac{2}{\frac{35-25}{\frac{35+25}{2} } } } }

                                \bf=\frac{10}{\frac{11}{\frac{10}{30} } }

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Therefore, the elasticity of the labour supply of Individual T's is approx. of earnings per hour. <u>2.75</u>, meaning that the work supply of Person T's is <u>elastic</u> across this wage range

4 0
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