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Makovka662 [10]
3 years ago
5

An aircraft company is considering using a new lightweight fastener, called the Superlight, to rivet certain sheet metal parts t

ogether. These particular items are not safety-of-flight critical, and so the decision of whether to use them is a financial one. The weight savings realized by using Superlights instead of the asic fastener has a net present value of $10 million (M) to the aircraft manufacturer. In this dollar range, assume that the company is a risk-neutral decision maker.
The Superlight fastener has never been used before on a production aircraft, and engineers are wary of its durability. From what little they know of the design and initial lab tests, they have high uncertainty about the number of Superlight fasteners that would need replacement during routine maintenance. They translate this to costs of S300 K with probability of 0.3, $120 K with probability 0.5, and $75 K with probability 0.2. (Label these possible cases High, Moderate, and Low repair cost, for future reference.) These costs include both parts and labor.

The alternative to the Superlight is the Basic fastener, which, although heavier than the Superlight, has been used extensively on past aircraft. Stress engineers feel that the Basic has a "tried and true" performance record: They conclude from past statistics that the repair cost associated with Basic fastener failure is $125 K. In these dollar ranges, assume that the aircraft company is a risk-neutral decision maker.

Required:
What is the certain equivalent for the best alternative?
Business
1 answer:
Aleonysh [2.5K]3 years ago
3 0

Answer:

The best alternative is to use Basic Fastener.

Explanation:

The aircraft company has 2 alternatives. The first alternative is super light which has repair cost of $165k when the probability is considered. There are three possible situations where repair cost can be high, moderate or low. The repair cost calculation with probability is as follows:

300,000 * 0.3 + 120,000 * 0.5 + 75,000 * 0.2 = $165,000

The repair cost for Basic faster is $125,000.

It is suitable for the company to use basic fastener as it has proven records of performance and also its repair cost is lower than Super fastener.

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An entrepreneur founded his company using $200,000 of his own money, issuing himself 200,000 shares of stock. An angel investor
nikitadnepr [17]

Answer:

the post money valuation of the company is $1,750,000

Explanation:

The computation of the post money valuation is shown below:

Given that

Value of 400,000 shares is  $1 million.

So,

The Value of 1 share is

= $1 million ÷ 400,000

= $2.5

And,  

Total number of shares is

= 400,000 + 200,000 + 100,000

= 700,000

Now  

Total value of shares is

= $2.5 × 700,000

= $1,750,000

hence, the post money valuation of the company is $1,750,000

6 0
2 years ago
Travelers to Europe usually exchange dollars for euros. Assuming that the euro supply is static, how does this currency exchange
otez555 [7]

Answer:

Increase demand for euros and Increase US dollar price of the Euro

Explanation:

The U.S travelers to Europe will require euros while in Europe. However, since the supply of euros is static i.e does not change with change in demand, there will be more people demanding for the euro resulting into increased demand for the euro. As a result, people will have to pay more US dollars to obtain euros thus increasing the US dollar price of the euro.

4 0
3 years ago
Kennedy’s alliance of progress program provided $25 billion in aid to countries in?
Annette [7]

President Kennedy aimed to provide economic assistance, and consolidate democracy and social justice in Latin America.

Kennedy proposed, via the corporation for international improvement and the Alliance for progress, both launched in 1961, to mortgage greater than $20 billion to Latin American nations that would sell democracy and adopt significant social reforms, specifically in making land possession possible for more numbers.

The Peace Corps, a program that despatched younger volunteers to foreign places to assist those in want, turned into probably one of the high-quality-acknowledged New Frontier programs.

Learn more about President Kennedy here: brainly.com/question/13721861

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3 0
2 years ago
Ajax Computer Company is an accrual-method calendar-year taxpayer. Ajax has never advertised in the national media prior to this
SOVA2 [1]

Answer: No deduction can be claimed this year.

Explanation:

The options to the question are:

a. No deduction can be claimed this year.

b. $5.50 million

c. $2,500,000

d. $5.50 million only if the professional golf tournament is played before April 15.

Answer:

Since Ajax Computer company is an accrual method calender-year tax payer, the computer company would recognize the expenses only when such expenses are incurred and not at the time that cash is being paid for the the expenses

Ajax computer company already paid in advance for both advertisements the following year even though the advertisement eanst taking place that year. Therefore, the payments will not be considered to be an expense until advertisements has actually taken place. Because of this, Ajax cannot deduct the amounts paid for the advertisements next year and hence, no deduction will be claimed this year.

4 0
3 years ago
Petra has been working in procurement for two years. She is interested in doing something new with supply chain operations that
monitta

The factor that would inhibit Petra, who works in procurement, from advancing her career in supply chain operations is <u>her </u><u>professional qualification</u>.

<h3>How is supply chain management different from procurement?</h3>

Procurement concentrates on acquiring goods and services needed in an organization.

Supply chain management embraces all the activities involved in the procurement, production, and distribution of an organization's goods and services until they reach the end-users and create value for the organization.

Thus, the factor that would inhibit Petra, who works in procurement, from advancing her career in supply chain operations is her professional qualification and experience.

Learn more about supply chain management at brainly.com/question/25160870

4 0
2 years ago
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