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- solve this ealy but correctlyA state government hired a contractor for a road construction project. The contractor's type, its cost efficiency, is UNKNOWN to the government. There is a 2/5 probability o its construction cost being 4 (billion dollars per lane) and 3/5 probability of the cost being 6. More lanes yield more social benefit in-the form of faster travel and fewer accidents. The social value V (measured in billions of dollars ) from having N lanes on the highway is V=15N-2N^2/3. The government is interested in option N and writing a contract to maximize the benefit of the state (V) net of the fee paid to the contractor (call it F) ; G=V-F. Your goal as a government official is to design a pair of contracts to separate the types of contractor. You want the contractor to choose (Contract L: Build N, lanes and get paid RL dollars" if its cost type is low cost of $4 billion dollars per lane and to choose "Contract H : Build NH lanes and get paid RH dollars" if its cost type is high cost $6 billion dollars…A state government hired a contractor for a road construction project. The contractor's type, its cost efficiency, is known to the government. There is a 2/5 probability o its construction cost being 4 (billion dollars per lane) and 3/5 probability of the cost being 6. More lanes yield more social benefit in-the form of faster travel and fewer accidents. The social value V (measured in billions of dollars ) from having N lanes on the highway is V=15N-2N^2/3. The government is interested in option N and writing a contract to maximize the benefit of the state (V) net of the fee paid to the contractor (call it F) ; G=V-F. Your goal as a government official is to design a pair of contracts to separate the types of contractor. You want the contractor to choose (Contract L: Build N, lanes and get paid RL dollars" if its cost type is low cost of $4 billion dollars per lane and to choose "Contract H : Build NH lanes and get paid RH dollars" if its cost type is high cost $6 billion dollars per…
- During your first month as an employee atGreenfield Industries (a large drill-bit manufacturer),you are asked to evaluate alternatives forproducing a newly designed drill bit on a turningmachine. Your boss’ memorandum to you haspractically no information about what the alternativesare and what criteria should be used. The same taskwas posed to a previous employee who could notfinish the analysis, but she has given you the followinginformation: An old turning machine valued at $350,000exists (in the warehouse) that can be modified for thenew drill bit. The in-house technicians have givenan estimate of $40,000 to modify this machine, andthey assure you that they will have the machine readybefore the projected start date (although they havenever done any modifications of this type). It is hopedthat the old turning machine will be able to meetproduction requirements at full capacity. An outsidecompany, McDonald Inc., made the machine sevenyears ago and can easily do the same…True or false 3.3 the strength of water transportation is high investment cost.Consider being tasked with conducting a cost-benefit analysis of a potential coal-fired power station. A specific amount of pollutants will be released from the facility, which will be erected on the fringes of a residential area. Its cooling system will require a considerable volume of water. Industries in the area claim that the extra electricity is urgently needed, while locals are against the building. How would you assess the economic benefits vs the social and environmental costs?
- Multiple Choice A. −0.5 B. −1.0 C. −1.5 D. −2.0 E. −0.4An untreated wooden pole that will last 10 years under a certain soil condition costs P 12,000. If a treated pole will last for 20 years, what is the maximum justifiable amount that can be paid for the treated pole? Assume 1% tax of the first cost for the treated pole and 12% interest rate. Use annual cost method. Select one: a. P 17,848 b. P 15,595 c. P 13,926 d. P 16,224Give an exmple of External Rate of Return (ERR) with complete solution and diagram.
- I want you to provide me the Cash Flow diagram of the problem. Only cash flow diagram, the solution is already there. Thanks in advance! The annual estimated cash flow is $140,000. The salvage value will be 12% of the initial price after 5 years. The discount rate (r) is 18% Let us assume the initial price of the doughnut machine be X. PV of cash inflows=PV of cash outflows$140,000×PVAF4,18%+.12X×PVF5,18%=X$140,000×2.69006180465+.12X×0.43710921621=X$376,608.652651=X-0.05245310594$376,608.652651=0.94754689406XX=$397,456.479475 The maximum purchase price of the doughnut machine is $397,456.48.The California Forest Service is considering two locations for a new state park. Location Ewould require an investment of $3 million and $50,000 per year in maintenance. Location Wwould cost $7 million to construct, but the Forest Service would receive an additional $25,000per year in park use fees. The operating cost of location W will be $65,000 per year. The revenueto park concessionaires will be $500,000 per year at location E and $700,000 per year at locationW. The disbenefits associated with each location are $30,000 per year for location E and $40,000per year for location W. Use(a) The B/C method, and(b) The modified B/C method to determine which location, if either, should be selected, using aninterest rate of 12% per year. Assume that the park will be maintained indefinitely.Amex Toy Makers, Inc. markets toys they know pose a possible serious hazard to children under certain circumstances. Does Amex have an ethical duty to remove the toys from the market, even if the injuries only occur in a limited number and only when misused? Why or why not? Explain your answr.r.
