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- True/False AVC can fall even when MC is risingProb.#1 At the Motorola plant in Mesa, AZ, it is desired to determine whether one-inch-thick insulation or two-inch-thick insulation should be used to reduce heat loss from a long section of steam pipe. The heat loss from the pipe without any insulation would cost $2.00 per linear foot per year. The one- inch-thick insulation option will eliminate 88% of the heat loss and will cost $0.60 per foot. Two-inch insulation will eliminate 95% of the heat loss and will cost $1.10 per foot. The steam pipe is 1,000 feet in length and will last 10 years. MARR is 6% per year. Which insulation thickness should be recommended? Apply Equivalent Uniform Annual Worth technique. please show all work for each type.The Cornballer, invented by George Bluth in the mid-1970s, is a device used to make cornballs. Itsold for $29.95. Suppose that 10,000 Cornballers were sold in 1981; 11,000 in 1982; and salesincreasing by 10% each year until it was last sold in 1990 (when it was made illegal). Assume aninterest rate of 12% per year. Assume sales were made at EOY. What was the worth of these cashflows in 1980? Show in standard factor notation and show the cash flow diagrams.
- Do all 4 parts otherwise noneThe owners if a small manufacturing concern have hired a vice president to tun the company with the expectation that eh will buy the company after five years. Compensation of the new vice president is a flat salary pus 75% of the first 150,000 profit , and then 10% of profit over $150,000. Ourchse price for the company is set at 4.5 times earnings (profit), computed as a average annual profitability over the next fie years. A. Plot the annual compensation ofhte vice president as a function of annual profit. B Assume the company will be worth $10 million in five years. Plot the profit of buying the company as a function of annual profit.Michael is 24 years old and has a 401(k) plan through his employer, a large financial institution. His company matches 50% of his contributions up to 6% of his salary. He currently contributes the maximum amount he can (i.e., 6%). In his 401(k), he has three funds. Investment A is a large-cap index fund, which has had an average annual growth over the past 10 years of 6.63% with a standard deviation of 13.46%. Investment B is a mid-cap index fund with a 10-year average annual growth of 9.89% and a standard deviation of 15.28%. Finally, Investment C is a small-cap Index fund with a 10-year average annual growth rate of 8.55% and a standard deviation of 16.90%. Fifty percent of his contribution is directed to Investment A, 25% to Investment B, and 25% to Investment C. His current salary is $48,000 and based on a compensation survey of financial institutions, he expects an average raise of 2.7% with a standard deviation of 0.4% each year. Develop a simulation model to predict his…
- a) Bond has a face value of ₡3000 and pays coupon of 12% per annum for 4 years, if the market interest rate is 16%. How much will you pay for this bond. If the coupon was to be paid semi- annually will your answer be different. b) A U.S. investor obtains Ghana cedis when the cedi is worth $.33 and invests in a one-year money market security that provides a yield (in cedis) of 24%. At the end of one year, the investor converts the proceeds from the investment back to dollars at the prevailing spot rate of $.26. What is the effective yield earned by this foreign investor?A vertical oil well has been drilled and completed. The productive zone is between the depths of 2,800 and 2,900 feet, you can assume there is oil in the entire thickness (gross = net). The average porosity is 10%, average water saturation is 20% and the oil formation volume factor is 1.3 RB/Stb. Other reservoirs with similar properties have drainage areas of 40 acres and the recovery factor 10.47305% (it is known with extreme precision!) a) Compute STOIIP and ultimate recovery, using the formals presented in lecture b) This well will also have a gas oil ratio (GOR) of 800 scf/bbl, how much gas is expected to be produced from this well?When MC rises, the value of AVC will also rise. True / False
- Asume you invest $3,500 today in an iveestment that promises to return $7,700 in exactly 10 years. a. Use the present value technique to estiate the IRR on this investment. b. if a minimum anual return of 9% is required would you recommed this investment.An investor has £13,000 in a fund generating a 5% return, with a 2.5% initial cost and an annual charge of 0.5%. What would that fund be worth after 5 years? Use the equation M = P (1+i)n to calculate the fund value.Please show work on Excel. A new engineer is evaluating whether to use a larger diameter pipe for a water line. The pipe will cost $327,089 more initially but will reduce pumping costs. The optimistic, most likely, and pessimistic projections for annual savings are $30,000, $20,000, and $5000, with respective probabilities of 20%, 50%, and 30%. The interest rate is most likely to be 7%, but is equally likely to be 6% or 8%, and the water line should have a life of 40 years. Find the expected annual savings and the expected interest rate. Determine the Expected PW based on these. Hint: Based on the different saving and their probabilities, find the expected value of savings. Then find the expected value of the interest rate (each option has equal probability). Then find the PW using these values.