Answer:
A) the probability that the asset will pay well is 51.16% and the probability that it pays poorly is 48.84%.
B) She should not invest in the asset because the expected value = the price asset, there is no expected profit.
Explanation:
There are 2 probable returns:
- Asset will pay well = P = $45,000
- Asset will pay poorly = 1 - P = $2,000
since the principal = $20,000, and the expected value = $20,000, the expected value equation would be:
45,000p + 2,000(1 - p) = 20,000
45,000 + 2,000 - 2,000p = 20,000
43,000p = 22,000
p = 0.5116 or 51.16%
1 - p = 48.84%
Answer:
The right solution is "$966.27".
Explanation:
Given values are:
Coupon rate,
= 10%
Par value,
= $1000
Yield of maturity,
= 12%
then,
Coupon will be:
=
=
= ($)
Now,
The present value of coupon will be:
=
By putting the value, we get
=
=
=
= ($)
The present value of par value will be:
=
=
= ($)
hence,
The price of bond will be:
=
=
= ($)
Depending on the location if the house and how much you want to sell it for. Just make sure basic things such as Holes in wall’s are fixed or more noticeable details. Otherwise if the house is in good shape and appliances, heating, water are all fine then not a lot.
Answer:
The break even point in units is 2,425.33.
Explanation:
The break even point is how many units you have to sell to pay the fixed costs. The selling price per unit is 124 and the cost per unit is 94. The contribution margin is 124-94 = 30. This means that per every unit you sell, you have $30 for paying the fixed costs. So, the total units for paying all the fixed costs are 72,760/30 = 2,425.33.
Answer:
Casey's opportunity cost of producing 1 kg of potatoes is 5 kg of steak.
Casey's opportunity cost of producing 1 kg of steak is 0.2 kg of potatoes.
Rick's opportunity cost of producing 1 kg of potatoes is 3 kg of steak.
Rick's opportunity cost of producing 1 kg of steak is 0.33 kg of potatoes.
Casey should produce steak while Rick should produce potatoes, since Rick has a comparative advantage in producing potatoes (lower opportunity cost) and Casey has a comparative advantage in producing steak.
As long as the price of steak per kilogram of potatoes is less than 5 kg of steak and more than 3 kg of steak, then both would win. In order for both of them to win is a similarly proportional way, the exchange price should be 4 kg of steak per kg of potatoes.