1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Katyanochek1 [597]
2 years ago
5

Consider the following probability distribution of returns estimated for a proposed project that involves a new ultrasound machi

ne
State of the Probability Rate of
Economy of occurrence Return
Very poor 0.1 -10%
Poor 0.2 0%
Average 0.4 10%
Good 0.2 20%
Very good 0.1 30%
a. What is the expected rate of return on the project?
b. What is the project's standard deviation of returns?
c. What is the project's coefficient of variation (CV) of returns?
d. What type of risk does the standard deviation and CV measure?
e. In what situation is this risk relevant?
Business
1 answer:
jenyasd209 [6]2 years ago
5 0

Answer:

a. Expected rate of return on the project = 10%

b. Project's standard deviation of returns = 10.95%

c. Project's coefficient of variation (CV) of returns = 1.10

d. The type of risk does the standard deviation and CV measure is referred to as the total risk of the project.

e. he risk is relevant when there is a need to assess the influence of the market and internal factors on the project.

Explanation:

Note: See the attached excel file for the calculations of Expected Rate of Return on the Project and Variance of Returns.

a. What is the expected rate of return on the project?

From the attached excel file, we have:

Expected rate of return on the project = Total of Expected Return Rate = 10%

b. What is the project's standard deviation of returns?

From the attached excel file, we have:

Project's variance of returns = Total of (P * D^2) = 1.20%

Therefore, we have:

Project's standard deviation of returns = Project's variance of returns^0.5 = 1.20%^0.5 = 10.95%

c. What is the project's coefficient of variation (CV) of returns?

Project's coefficient of variation (CV) of returns = Project's standard deviation of returns / Expected rate of return on the project = 10.95% / 10% = 1.10

d. What type of risk does the standard deviation and CV measure?

The type of risk does the standard deviation and CV measure is referred to as the total risk of the project.

Total risk is a metric that indicates all of the risks that come with accepting a project.

e. In what situation is this risk relevant?

The risk is relevant when there is a need to assess the influence of the market and internal factors on the project.

Download xlsx
You might be interested in
Think of a firm that has attained a differentiation focus or cost focus strategy. Are its advantages sustainable? Why? Why not?
quester [9]

Answer:

Yes they are sustainable

Explanation:

The strategies mentioned in the question were laid out my Michael Porter and therefore, we can look analyse his model to understand whether these strategies are sustainable or not.

Porter has categorized strategies into 3 broad categories: Cost Leadership, Differentiation, and Focus strategies (all three are known as "Generic Strategies). Focus strategy is branched out into two sub-segments known as Cost Focus and Differentiation Focus.

Now, the question has already clarified that the strategies in question are both focus strategies. So lets understand what each entails.

Differentiation Focus: A strategy in which the company aims to gain market leadership in a focused market (a specific market) through strategic differentiaion. This strategic differentiaion involves offering a specialized service or a unique product in a niche market. Cost focus strategy is similar in the sense is that that the aim is to offer highly low cost products/services to a niche market. Because of the focus on these niche markets, company's develop a strong understansing of the consumer thereby developing strong brand loyalty with that particular customer base. The key ingredient, again, is that the competitive advantage is being harnessed by focusing just on a particular niche market. Another key component is that the companies using this strategy rely on the consumers in the target market having different needs, tastes, and requirements than consumers in other segments in the industry.

Now, these strategies by desig were put forth my Porter has being sustainable. Hence the term "generic strategies" in that they can be broadly used to create and sustain performance. The focus strategies as defined above are sustainable since they harness the power of having priority knowledge of their target market to provide appropriate services and products. The high brand loyalty and knowledge of consumers give them an edge over competitors (competitive rivalry). Supplier power depends on the nature of products being offered therefore it cant be taken into consideration. Buyer power can be managed since you are prodiving unique service offerings to unique customers. Threat of substitution depends on the product and service offering. Threat of new entry by larger player exists, but due to the focus that the company had in the target market, barriers to entry (long strong brand loyalty) can be developed.

7 0
3 years ago
Which of the following is the least reliable resource for fraud statistics? a. Fraud perpetrators. b. FBI agencies. c. Health ag
Stells [14]

Answer:

The correct answer is A) Fraud perpetrators.

Explanation:

Being fraud a crime it is normal to think of certain attributes that make us determine some characteristics of criminals; Preconceived are: poor education, bad manners, and bad by nature. Scholars of criminal behavior have determined certain personality characteristics of the fraud perpetrator that are far from the stereotypes cited.

3 0
3 years ago
The ecoist manufactures handbags out of excess packaging that would otherwise end up in landfills. this is an example of​ values
mina [271]
From the word itself, "values-led" business, this type of businesses are more inclined to doing what is right and moral by promoting values rather than thinking too much about the profit that comes from the sales of the manufactured goods. In the example above, the business leverages in the notion that recycling will lead to lesser pollution to the environment. 
3 0
3 years ago
Read 2 more answers
Are the following statements true or false? The difference between savings and investments is that savings is money set aside fo
grigory [225]

Answer:

That statement is true.

Explanation:

Basically, You put your money in saving if you intended to use that money for future consumption. You put your money in investment if you intended to make financial gain out of it.

For example,

Let's say that you want to buy a laptop that cost $700. You only able to spend $350 per month since you have to consider other more important payment such as rent or food. So you set aside $350 for two month and purchase the laptop at the end of the second month. This is an example of saving.

In another case let's say that you put that $350 in Bonds rather than purchasing laptop. You Let that bond mature and take a 3% interest as profit. Two month later, the value of your money is increased. This is an example of an investment.

8 0
2 years ago
Read 2 more answers
Price Per Unit Quantity Supplied Quantity Demanded $10 100 295 11 150 275 12 190 250 13 220 220 14 245 180 15 265 135 If a techn
Contact [7]

Answer:

$12

Explanation:

Equilibrium price is price at the point where quantity supplied equals the quantity demanded.

Please check the attached image for a table showing how equilibrium was found

6 0
3 years ago
Other questions:
  • why might an individual pursue a career in education and training career cluster pursue a career helpppppp
    6·1 answer
  • When bic introduced disposable​ razors, the product and market met several criteria for using​ ________ pricing. the market was
    7·1 answer
  • The opportunity cost of producing a bicycle refers to Group of answer choices the marginal cost of the last bicycle produced. th
    15·1 answer
  • One of your customers is delinquent on his accounts payable balance. You’ve mutually agreed to a repayment schedule of $500 per
    6·1 answer
  • Identify which of the following is not generally a right of common stockholders. Vote at stockholders' meetings Manage operation
    14·1 answer
  • On which financial statements would you look to find the total costs of merchandise that remains and the total that has been sol
    15·1 answer
  • Luxere Hotels International, an American company, sells the rights to other hospitality companies globally to open hotels with t
    13·1 answer
  • Of the securities listed below, which would be exempt from the registration requirements of the Uniform Securities Act?I. Securi
    5·1 answer
  • Suppose the own price elasticity of demand for good X is -3, its income elasticity is -2, its advertising elasticity is 4, and t
    13·1 answer
  • Eduardo sold 500 shares of northcutt corporation stock on the new york stock exchange. this transaction:____.
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!