c) You are given the following pay-offs of three acts A1, A2 and A3, and thestates of nature S1, S2 and S3.States of nature A1A2A3S125-10-125S2400440400S3650740 750The probabilities of the states of nature are respectively, 0.1, 0.7 and 0.2.Calculate and tabulate the EMV and conclude which of the acts can bechosen as the best.

The Expected Monetary Value (EMV) is a statistical measure used in decision analysis to represent…

c) You are given the following pay-offs of three acts A1, A2 and A3, and the states of nature S1, S2 and S3. States of nature A1 A2 S1 25 -10 S2 400 440 S3 650 740 The probabilities of the states of nature are respectively, 0.1, 0.7 and 0.2. Calculate and tabulate the EMV and conclude which of the acts can be chosen as the best. A3 -125 400 750

c) You are given the following pay-offs of three acts A1, A2 and A3, and the states of nature S1, S2 and S3. States of nature A1 A2 S1 25 -10 S2 400 440 S3 650 740 The probabilities of the states of nature are respectively, 0.1, 0.7 and 0.2. Calculate and tabulate the EMV and conclude which of the acts can be chosen as the best. A3 -125 400 750

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter11: Venture Capital Valuation Methods

Section: Chapter Questions

Problem 14DQ

See similar textbooks

Similar questions

For each of the following compute the present value.
Can you provide a manual written working of calculating CAPM Req. Return and beta
Suppose that we can describe the world using two states and that two assets are available, asset X an asset Y. We assume the asset’s future prices have the following distribution State Future Price Asset X Future Price Asset Y 1 $25 $50 2 $20 $40 The values of the unit claims implied by these assets are such that: A. C1 and C2 cannot be determined B. C1=1 and C2=1 C. C1=1, but we cannot determine C2 D. C1=5/4 and C2=5/4
The factor ( 1 + i ) n in the formula is known as the future-value factor (FVF) or _____________ factor of a single amount. Select one: a. compound-interest b. capital-interest c. original-investment d. variable-interest.
based on the above exercice - On the basis of the data provided at question 6, calculate your levered IRR based on ATCF.
Consider the following payoff table that represents the profits earned for each alternative (A, B, and C) under the states of nature S1, S2, and S3. Using the Laplace criterion, what would be the highest expected payoff? S1 S2 S3 A $100 145 120 B $75 125 110 C $95 85 60
For each of the following, compute the future value.
Finish the formula for Simple Interest. I = Simple intrest, P = Principle, R = rate and T = time. Your answer:
The single sum, present worth factor: a. Can be depicted as (1 + i)−n b. Can be depicted as (P|F i%,n) c. Is represented as PV using the Excel® financial function with −1 inserted for the fv parameter d. All of the above.
For the first collumn how much do the current liabilites. What is the difference between current and total liabilites?
Suppose that we can describe the world using two states and that two assets are available, asset K an asset L. We assume the asset’s future prices have the following distribution Suppose that we can describe the world using two states and that two assets are available, asset K an asset L. We assume the asset’s future prices have the following distribution state 1 Future Price Asset K $55 $45 2. Future Price Asset L $60 $30 The current price of asset K is $50, and the current price of asset L is $50. What are the values of the unit claims (C1 and C2)? What is the risk free rate implied by these assets? What is the “risk neutral probability” of state 1? What is the “risk neutral probability” of state 2? What is the price implied for an asset providing $100 in state 1 and $50 in state 2? You plan to buy a home for $100,000 in the future.You want to guarantee that you will have the money.What would you buy/sell today to accomplish this, and what…
Read the question carefully and give me right solution according to the question. IRR =17.3%