What drove Tucker to risk everything to build a car company?

Suppose you face a choice between a certain income of $2,000, or a 50-50 chance of income of $1,000 or $3,000. Suppose you prefe

Aleonysh [2.5K]

Solution :

The risk averse is the person who wishes to reduce the uncertainty attached to the money.

Certain income = $2000.

50-50 chance of 1000 and 3000 would income expected income of

(0.5 x 1000) +(0.5 x 3000) = 2000

Both of them gives an equal amount of income while there is uncertainty attached with the second case which makes the risk averse person disincline to follow.

Hence the statement is FALSE.

Assume that the population level in a country is X. 5 percent of the population are likely to get affected by the disease due to which it makes a population of 0.05 X population to be effected by the disease. The population level will cost $38,000, hence making the total healthcare cost to be 1900 X.

8 0

3 years ago

An essential consumer skill is being able to ________________________.

umka21 [38]

a. address problems with sellers.

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3 years ago

Read 2 more answers

A company is considering investing in a new machine that requires a cash payment of $38,209 today. The machine will generate ann

navik [9.2K]

Answer:

The IRR is 10%.

Explanation:

a) Calculation of Internal Rate of Return (IRR):

We choose a discount rate, say 10% and use it to discount the cash flows to their present values. If the net present value (NPV) of all the cash flows equals zero, then that discount rate is accepted as the IRR.

b) Without 10% discount rate, the discount factors are for:

1st year = 1.1 (1 + discount rate) raised to power 1

2nd year = 1.21 (1 + discount rate) raised to power 2

3rd year = 1.331 (1 + discount rate) raised to power 3

c) These discount factors will divide the cash inflows for each year:

1st year, NPV = $15,364/1.1 = $13,967.27

2nd year, NPV = $15,364/1.21 = $12,697.52

3rd year, NPV = $15,364/1.331 = $11,543.20

Total NPV of inflows = $38,209 approximately

NPV of outflows -$38,209

NPV of inflows and outflows $0

So, the IRR is 10%.

IRR is a capital budgeting metric to measure profitability by using a discount rate which makes the net present value of all cash flows to become zero. To get a suitable rate, trial and error is involved, or one can make use of educated best guess.

8 0

3 years ago

Which of the following is true? When companies employ push-down accounting:A) the subsidiary revalues assets and liabilities to

kondor19780726 [428]

Answer: The correct answer is A) The subsidiary revalues assets and liabilities to their fair values as of the acquisition date.

Explanation: Push down accounting is used when a company buys another company. This type of accounting revalues the assets and liabilities of the acquired company at a fair value on the date of acquisition.

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3 years ago

In its focus on bottom-line financial value, the ________ approach offers limited guidance for go-to-market strategies and does

solniwko [45]

Answer:

B. Customer Equity

Explanation:

In its focus on bottom-line financial value, the customer equity approach offers limited guidance for go-to-market strategies and does not fully account for competitive moves. Customer equity can be defined as the total value of all the customers of any firm. It means any firm will have more customer equity if has large number of customers who make frequent purchases as well. Customer loyalty is directly proportional to the customer equity, more is the customer loyalty, the more will be the customer equity of any brand. Although it is very much important for any business but it does not tell about the go-to market strategies and competitive moves that what business you should be in and what business you could be in.

8 0

3 years ago