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DaniilM [7]
3 years ago
6

Why must real options have positive​ value? ​(Select all the choices that​ apply.)

Business
1 answer:
yarga [219]3 years ago
5 0

Answer:

A. Real options must have positive value becasue they are only exercised when doing so would increase the value of the investment.

B. If exercisung the real option would reduce value, managers ca allow the option to go unexercised.

D, Having the real option but not the obligation to act is valuabale.

Explanation:

Because real option are options or choices made available to managers of a firm concerning investment their choices are meant to bring about a positive growth and return on the investments.

So if any of the choices presented to these managers are going to reduce the values or have other negative impacts on the investment and its value, then the option which is the real option or ideal option canbe forgone.

Cheers.  

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Answer:

Present value of the cash inflow= $69,086.97

Explanation:

<em>An annuity is a series of annual cash outflows or inflows which payable or receivable for a certain number of periods. If the annual cash flow is expected to increase by a certain percentage yearly, it is called a growing annuity. </em>

To work out the the present value of a growing annuity,  we use the formula:

PV = A/(r-g) × (1- (1+g/1+r)^n)

A- annual cash flow - 20,000

r- rate of return - 8%

g- growth rate - 3%

n- number of years- 4

I will break out the formula into two parts to make the workings very clear to follow. So applying this formula, we can work out the present value of the growing annuity (winnings) as follows.  

A/(r-g)  = 20,000/(0.08-0.03) = $400,000

(1- (1+g/1+r)^n) = 1 -(1.03/1.08)^4 =0.17271

PV = A/(r-g) × (1- (1+g/1+r)^n)  =400,000 × 0.17271 =69,086.97

Present value of the cash inflow = $69,086.97

8 0
3 years ago
Morgan signs a contract with Shane agreeing to work with him for a movie. Halfway through the production of the movie, Shane dec
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Answer:

(b) Shane has to pay $20,000 to Morgan for breach of contract

Explanation:

In the situation, it is given that Shane decides to quit as he gets another job so he breaks the contract instead of finishing his work on time.  

Due to breach of contract, Shane has to pay $20,000 to Morgan because it is written in the party that if any party breaks the contract than he has to pay the amount. But due to some unnatural causes, no one has to pay.  

In the given case, Shane has deliberately broken the contract so it is compulsory to pay the $20,000 to Morgan.  

Hence, option b is correct

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Which is greater: 1 hour or 60 minutes?
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Answer:

both r the same

Explanation:

Stay safe, stay healthy and blessed.

Thank you

5 0
2 years ago
Read 2 more answers
Boris cannot afford his current car insurance payments. How can he most easily lower them?
vredina [299]
C. buy a cheaper car
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3 years ago
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The College Board reported the following mean scores for the three parts of the Scholastic Aptitude Test (SAT) (The World Almana
storchak [24]

Answer:

a) P(492

And we can use excel or the normal standard table to find this probability:

P(-0.949 < Z< 0.949)= P(Z

b) P(505

And we can use excel or the normal standard table to find this probability:

P(-0.949 < Z< 1.898)= P(Z

c) P(484

And we can use excel or the normal standard table to find this probability:

P(-1 < Z< 1)= P(Z

Explanation:

Previous concepts

Normal distribution, is a "probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean".

The Z-score is "a numerical measurement used in statistics of a value's relationship to the mean (average) of a group of values, measured in terms of standard deviations from the mean".  

Part a

Let X the random variable that represent the scores for critical reading of a population, and for this case we know the distribution for X is given by:

X \sim N(502,100)  

Where \mu=502 and \sigma=100

We select a sample of size n=90, since the distribution for X is normal then the distribution for the sample size is also normal

\bar X \sim N(\mu, \frac{\sigma}{\sqrt{n}}=\frac{100}{\sqrt{90}}=10.54)

And for this case we want this probability:

P(502-10 < \bar X < 502+10)

And for this case we can use the z score given by:

z= \frac{\bar X -\mu}{\sigma_{\bar x}}

And if we use this formula we got:

P(492

And we can use excel or the normal standard table to find this probability:

P(-0.949 < Z< 0.949)= P(Z

Part b

Let X the random variable that represent the scores for Math of a population, and for this case we know the distribution for X is given by:

X \sim N(515,100)  

Where \mu=515 and \sigma=100

We select a sample of size n=90, since the distribution for X is normal then the distribution for the sample size is also normal

\bar X \sim N(\mu, \frac{\sigma}{\sqrt{n}}=\frac{100}{\sqrt{90}}=10.54)

And for this case we want this probability:

P(515-10 < \bar X < 515+10)

And for this case we can use the z score given by:

z= \frac{\bar X -\mu}{\sigma_{\bar x}}

And if we use this formula we got:

P(505

And we can use excel or the normal standard table to find this probability:

P(-0.949 < Z< 1.898)= P(Z

Part c

Let X the random variable that represent the scores for Writing of a population, and for this case we know the distribution for X is given by:

X \sim N(494,100)  

Where \mu=494 and \sigma=100

We select a sample of size n=100, since the distribution for X is normal then the distribution for the sample size is also normal

\bar X \sim N(\mu, \frac{\sigma}{\sqrt{n}}=\frac{100}{\sqrt{100}}=10)

And for this case we want this probability:

P(494-10 < \bar X < 494+10)

And for this case we can use the z score given by:

z= \frac{\bar X -\mu}{\sigma_{\bar x}}

And if we use this formula we got:

P(484

And we can use excel or the normal standard table to find this probability:

P(-1 < Z< 1)= P(Z

3 0
3 years ago
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