A new equipment is being considered at a local company at a cost of $200,000. The operation and maintenance costs of this equipment are estimated to be about $20,000 per year. Salvage value is expected to be $40,000 at the end of its useful life. The life of this equipment is estimated to vary anywhere from 5 to 9 years with the associated probabilities as shown in the table below. If an interest rate of 10% is used, what is the expected EUAC for this equipment? Life, Years 5 6 7 8 9 Probability 0.3 0.1 0.15 0.2 0.25 $66,460 $55,970 $62,960 $58,206.2

Project NOLA has an initial after-tax cost of $150,000 at t = 0 The project is expected to produce after-tax CFs of $60,000 for the next three years. The project's WACC is 10%. The project's CFs depend critically upon customer's acceptance of the product. There's a 60% probability that the product will be successful and generate annual after-tax CFs of $100,000, and a 40% probability that it will not be successful and hence produce annual after-tax of -$20,000. Should the company abandon the project after a year ?please so working for everything. Thank you.

A machine with an initial purchase price of $29100 has a useful life of 10 years. The usage of this machine is forecasted to bring us the savings in the table below. At an interest rate of 0% how many years will it take to payback the investment?

Match the measures of worth in the first column with an appropriate definition from the second column.

Find the expected value assuming the risk factor is 30 % and the interest rate 12%, if you will receive $20,000 one year from today.please show work

You are considering investing in one of two projects, which have the following returns and probabilities of occurrence: (a) Compute the mean return for each project.(b) Compute the variance of return for each project.(c) Which project would you prefer, and why?

Given ten historical returns: [-15%, -13%, -10%, -5%, -3%, 1%, 4%, 7%, 11%, 20%], what is the 20% conditional value at risk (CVaR) under the empirical distribution?   Select one:   a. -15%   b. -14%   c. -13%   d. -10%   e. 11%

In net present worth analysis over a period, if the net present worth value is equal to zero, the initial investment ______ a. has not produced profits b. has no certainty of gians c. has been fully account by the operation d. has a tendency to produce more losses  e. has been applied with correct interest A company invests on selling computer units worth Php 32,000.00. The probability of maintaining this price throughout the year is 65% while that of less or more than 10% the expected are 15% and 20%, (a) what is the probability that the selling price for that year is more than the expected price? a. 0.8 b. 0.85 c. 0.25 d. 0.2 e. 1 f. 0.15 g. 0.65

Company A expects to generate K150, 000 cash flows per year in perpetuity and the risk adjusted discount rate is 20%. What should be the certainty equivalent cash flows when the risk free rate is 10%

You live in an area where there is a possibility of a massive earthquake, so consider purchasing earthquake insurance for your home at an annual cost of $180. The probability of an earthquake damaging your home in the course of a year is 0.001. If this occurs, you estimate that the cost of the damage (fully covered by insurance) will be $160,000. Your total assets (including the house) are worth $250,000.  a) Apply the maximum expected value decision rule to determine the alternative (to buy insurance or not) that maximizes the value of your assets after one year. b) You developed a utility function that measures the value of your assets in x dollars (x ≥ 0). This utility function is U(x) = √x. Compare the utility of reducing the total of your assets for the next year by a value equal to the value of the insurance, with the expected utility next year of not purchasing tremor insurance. Should you purchase the insurance?