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
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.

You might be interested in
Identify the sales promotion technique based on the given scenario. Tara’s company has launched a new perfume. The company recen
Anestetic [448]

Loyalty Points From the Customers.

Explanation:

The company is trying to have loyalty points by reducing the gap between the customer and the organisation.

1. Since Tara's company has received bad publicity they are trying to improve as through various sales promotion techniques the customers perception towards the company and its product would change.

2. This would have a win-win situation at both the end. The Business would create not only monitory profits by also have loyal customers that are satisfies at the other end.

3 0
2 years ago
Auto Mart, a large auto parts distributor, is attempting to acquire Rubber Meets the Road, a tire manufacturer. However, Rubber
qaws [65]

Answer:

The Rubber Meets the Road has issued shares at discount to market price to its shareholders (Right Issue)

Explanation:

These tactics are used by the company who wants to defend itself from the acquirer because they think they will damage the company values, culture, restructure business processes and change in people who work and are part of the organization. In other words they think are a family and will loose each other and the associated benefits now they are enjoying so what they do is they upper management issues the rights to its existing shareholders at discount to market value.

The investment doesnot seems attractive as the benefit are no more if the acquirer pays extra dollars to buy the 50% shares which have been increased due to right issue. So the statement hostile takeover means the defending strategy of the firm that the acquirer wants to acquire its control by buying more than 50% shares.

8 0
3 years ago
The appraisal interview _______
Tomtit [17]

Answer:

The appraisal interview should be held in two segments because the rater must perform the role of both evaluator and counsellor.

Explanation:

Following are the purpose of appraisal interview:

1) Rate and evaluate the past performance.

2) Feedback for development and recommend the training program.

3) Discuss the growth plan of employee.

Therefore, role of one who is taking appraisal is very vital for the growth and development of employee. So, he has to play two role, both evaluator and counsellor.

6 0
3 years ago
Julie is working on formulating a marketing plan to increase the market share of Little Debbie Snack Cakes. According to the dis
Kazeer [188]

Answer:

Correct answer:

d. Increase sales promotion

Explanation:

For Julie who owns the Little Debbie Snacks Cakes, in order for her to increase the market share of his company, there will be need for her to increase her sales promotion. <em>This would be through series of campaign which she could run like "Buy 2 get 1 FREE" or "A dozen order free delivery + gift" etc.</em>

4 0
3 years ago
Suppose that, in an attempt to combat severe unemployment, the government decides to increase the amount of money in circulation
zepelin [54]

Answer:

Increase; higher; more; lower; lower

Explanation:

Expansionary policy is required to combat unemployment in the economy. If the government increases the money supply, the interest rate falls. This causes an increase in investment as lending becomes cheaper. Increase in investment causes an increase in the aggregate demand. Increased demand further causes the price level to rise.  

Increase in prices will motivate producers to produce more. In order to increase output producers will hire more workers. Consequently, the rate of unemployment will fall. We see that at higher inflation unemployment is lower and vice versa. This means that there is a trade-off between inflation and unemployment.

4 0
3 years ago
Other questions:
  • A(n) __________ refers to a complete ban on importing or exporting of products from a specific country
    12·1 answer
  • Accounting subject , please help me​
    5·1 answer
  • Aside from targeting Verizon customers, Sprint could pursue __________, as they make up the largest group to use mobile devices
    7·1 answer
  • World Grocer sells high-quality products and grocery items that are unique to its highly populated area; in addition, it offers
    8·1 answer
  • Which type of account is typically the MOST liquid? Checking account Savings account Certificate of Deposit Exchange Traded Fund
    12·1 answer
  • Clark Company's master budget reflects budgeted sales information for the month of June, 2019, as follows: Budgeted Quantity Bud
    5·1 answer
  • It costs Sunland Company $28 of variable costs and $18 of allocated fixed costs to produce an industrial trash can that sells fo
    13·1 answer
  • Luker corporation uses a process costing system. the company had $160,500 of beginning finished goods inventory on october 1. lu
    12·1 answer
  • Inez is compensated based on a plan that pays a base salary, with commission in addition. Inez receives $40,000/year salary (and
    10·1 answer
  • On January 1, 2017, Swen paid $184,000 for $200,000 of the 8%, 20-year bonds of Penn Corporation, issued on January 1, 2013, at
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!