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juin [17]
2 years ago
15

Monsters Incorporated (MI) in ready to launch a new product. Depending upon the success of this product, MI will have a value of

either $100 million, $150 million, or $191 million, with each outcome being equally likely. The cash flows are unrelated to the state of the economy (i.e. risk from the project is diversifiable) so that the project has a beta of 0 and a cost of capital equal to the risk-free rate, which is currently 5%. Assume that the capital markets are perfect.
1. Suppose that MI has zero-coupon debt with a $125 million face value due next year. The total value of MI with leverage is closest to:

(1) $133 million
(2) $140 million
(3) $147 million
(4) $125 million


2. Assuming that in the event of default, 20% of the value of MI’s assets will be lost in bankruptcy costs, the initial value of MI’s equity without leverage is closest to:

(1) $150 million
(2) $147 million
(3) $140 million
(4) $133 million


3. Assume that in the event of default, 20% of the value of MI’s assets will be lost in bankruptcy costs and suppose that MI has zero-coupon debt with a $125 million face value due next year. The total value of MI with leverage is closest to:

(1) $140 million
(2) $100 million
(3) $125 million
(4) $134 million
Business
1 answer:
irga5000 [103]2 years ago
3 0
A and then d i’m pretty sure
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$65 per unit

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For computing the cost per unit first we have to determine the cost of goods manufactured which is shown below:

Cost of goods manufactured = Opening work in process + direct material cost + direct labor cost + manufacturing overhead cost - ending work in process

= $10,000 + $12,000 + $6,000 + $4,000 - $6,000

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And, there is a production of 400 MP3 players

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A small market orders copies of a certain magazine for its magazine rack each week. Let X 5 demand for the magazine, with pmf Su
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Answer:

See explanation below.

Explanation:

Let X the random variable that represent the demand for the magazine, the pmf for X is given by:

X       1            2           3          4        5        6      

P(X)  1/15      2/15       3/15     4/15   3/15     2/15

3 magazines

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And the net revenue for this case would be:

$4-$6 = -$2 , X=1 (demand 1)

$4*2-$6 = $2 , X=2 (demand 2)

$4*3-$6 = $6 , X=3 (demand 3)

For the values of X=4,5,6 the net revenue will be $6 since the number of magazines is 3

And the expected value for the net revenue would be:

E(R) = \frac{1}{15} *(-2) +\frac{2}{15} *(2) +\frac{3}{15}*(6) + \frac{4}{15}*(6) +\frac{3}{15}*(6) +\frac{2}{15}*(6) = \frac{74}{15}=4.93

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$4*4-$8 = $8 , X=4 (demand 4)

For the values of X=5,6 the net revenue will be $8 since the number of magazines is 4

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E(R) = \frac{1}{15} *(-4) +\frac{2}{15} *(0) +\frac{3}{15}*(4) + \frac{4}{15}*(8) +\frac{3}{15}*(8) +\frac{2}{15}*(8) = \frac{80}{15}=5.33

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5 0
3 years ago
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Answer:

$2800

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Total cost to purchase = $20,140 + $165(brokerage fee)

Total cost to purchase =  $20,305

Cost to sell = $215(brokerage fee)

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