An investor has at most $10,000 to invest in government bonds, mutual funds, and money market funds. The average yields for the govemment bonds, mutual funds, and money market funds are 11%, 7%, and 14% respectively. The investor's policy requires that the total amount invested in mutual and money market funds not exceed the amount invested in government bonds. How much should be invested in each type of investment in order to maximize the return? What is the maximum return in the first year? SET UP on paper, then use EXCEL to solve How much should be invested in government bonds? How much should be invested in mutual funds? How much should be invested in money market funds? What is the maximum return in the first year?
Q: Describe two instances when the non-functional needs of the project were not met
A: Non-functional needs are aspects of a project that are unrelated to its functionality but are…
Q: what kinds of capacity issues do many elementary and secondary schools periodically experience and…
A: In elementary and secondary schools, capacity issues can have a significant impact on student's…
Q: lain how project management and software development differ.
A: Project management and software development are the two different fields that are related to each…
Q: Name and elaborate 3 effects of the pandemic on the future demand for air cargo. Give reasons to…
A: To be determined: Name and elaborate 3 effects of the pandemic on the future demand for air cargo…
Q: Provide the diagram of the model and analyse a Singapore country using the Porter's Diamond Model.
A: Porter's Diamond Model is a framework for analyzing the competitiveness of a country based on four…
Q: The DSDM stands for a set of values and ideals; could you summarise them for me? When working on…
A: DSDM was developed in 1994 by a collaboration of UK software development experts and has now become…
Q: SeedMart mixes mixes two types of seeds into a blend. Each type of seed has been rated ( per pound)…
A: *Since you have not attathe data table, I have taken the dummy table. Please take the data…
Q: What are the legal and ethical considerations involved in outsourcing contracts, and how can parties…
A: Many companies rely on outsourcing or offshore as the bedrock upon which they run their day-to-day…
Q: dry area. However, the local fire code restricts the height in which the boxes may be stacked, so…
A: Forecasting future demand is critical in any retail business, but it can be difficult when…
Q: The ABC Supply company is currently experiencing with an inventory rotation problem. This difficulty…
A: Companies frequently face difficulties in maintaining an optimal inventory system that meets…
Q: The Friendly Sausage Factory (FSF) can produce hot dogs at a rate of 5,000 per day. FSF supplies hot…
A: Optimal Production Quantity is the base measure of request that must be created to keep away from…
Q: English Petroleum (EP) has to decide whether or not to drill for oil in a particular place. After…
A: Find the Given details below: Given details: Yield High Moderate No Returns 100 M 50 M…
Q: “The supply shocks introduce direct supply disruptions in African countries that are increasingly…
A: Supply shocks are sudden and unexpected events that disrupt the production and distribution of goods…
Q: A medical equipment has an average monthly demand is 134 units. Its unit cost is $385. It costs $486…
A: Minimum annual total costs is the sum of total purchasing costs, ordering costs and holding costs.…
Q: Two years ago, the State Department of Economic Development created the Business Services Group to…
A: Charles made few mistakes in way he measured his team's performance, which has resulted in a drop in…
Q: A perishable dairy product is ordered daily at a particular supermarket. The product, which costs…
A: Operation management includes all those activities that are important for managing the flow of goods…
Q: Help combat crime in Kampala by taking the lead. Artificial intelligence (AI) might be utilised to…
A: Efficient management is the process of managing all the activities in the business efficiently…
Q: Has Project Management's usefulness been replaced by technological advances?". Write in support of…
A: Project management is planning and organizing the resources that are used to complete the required…
Q: A machine cycle consists of these four steps; this loop is also known as a process cycle. What…
A: The machine cycle is a four-process cycle that includes reading and interpreting the machine…
Q: Which of the following is NOT the characteristics of an ERP System? it provides more data…
A: An Enterprise Resource Planning (ERP) System helps businesses manage and integrate their core…
Q: Oscar Munoz started as United’s CEO in 2015, by March 2017 named “Communicator of the Year” by…
A: The above-given case is a perfect example of miscommunication and communication crisis. A…
Q: A particular raw material is available to a company at three different prices, depending on the size…
A: Annual Demand (D) = 2,900 unitsOrdering cost (S) = $60Holding cost (H) = 20% of material price
Q: Proposals should be based off the assumption that you are working for a medium sized business with…
A: Cost is the amount that is incurred by the company while producing goods and services according to…
Q: Rent'R Cars is a multisite car rental company in the city. It is trying out a new "return the car to…
A: The transportation model is used to calculate the minimum cost of the route by selecting different…
Q: DIfferntiate between ISO27001 2022, ISO27001 2017, ISO27001 2013 and ISO27001 2005. Please…
A: ISO International Organization for Standardization is a free, non-administrative global organization…
Q: Does this imply that developers have a responsibility to produce code that can be maintained even if…
A: Business management includes all those activities which are important for the smooth implementation…
Q: How can businesses effectively manage their relationships with suppliers and customers in a global…
A: Supplier relationship management (SRM) Supplier relationship management (SRM) is the interaction…
Q: Consuelo Chua, Inc., is a Columbian disk drive manufacturer in need of an aggregate plan for July…
A: Inventory management is the method in which the production activity components; raw materials are…
Q: Explain the difference between managing and leading.
A: Managing and Leading play a important role in any organization. Managing: Managing is the process…
Q: Give typing answer with explanation and conclusion Many businesses fail within the first 5 years…
A: Starting a new business is an exciting endeavour, but it necessitates a well-thought-out business…
Q: Construct the project network for this project and determine the following: d) Expected project…
A: As seen in previous steps, we have already calculated the Expected project duration and variance…
Q: The Centers for Medicare and Medicaid are beginning to penalize hospitals who have patients…
A: The Centers for Medicare and Medicaid have implemented the Readmission Reduction Program, which…
Q: What exactly has happened between manufacturers and buyers? Give an example of where it may be found…
A: Manufacturing is a term used to describe an environment where goods are actually produced or…
Q: If feasible, please define and demonstrate the operational environment.
A: The operational environment refers to conditions in which organisation or system operates. This…
Q: The linear programming model of an optimization problem is given below: Maximize 8x + 2y Subject…
A: Maximize 8x + 2ySubject to-2x− 6y ≤ 125x + 4y ≤ 40x + 2y ≤ 12x, y≥ 0
Q: In..........people tend to do one task at a time.
A: Human beings have ability to perform multiple tasks simultaneously, but there are situations where…
Q: Draw a Pareto Chart and perform a Pareto analysis on the following information. Reason for…
A: In command to quantify the priority, use the Pareto Chart, For this, arrange the slab in the…
Q: 1.Define the functional organizational structure, and explain whythis structure creates problems for…
A: Organisational structure is the structure that outlines how the organisational activities will be…
Q: Draw the network representation of the following network flow problem. Your network should be…
A: The network flow problem helps to find the maximum amount of flow that can be sent through a network…
Q: Is the transportation model an example of decision making under certainty or decision making under…
A: The allocation and transportation of commodities from supply locations to demand sites may be…
Q: It might be helpful to draw a map of the project with and without the underlying architecture in…
A: When starting a project, it's critical to understand the underlying architecture, which serves as…
Q: Wiebe Trucking, Inc., is planning a new warehouse to serve the western United States. Denver, Santa…
A: Location Annual fixed cost Variable Costs per Shipment Denver $5,000,000 $4.65 Santa Fe…
Q: Explain in detail. How a technology improvement can make a rise in the efficiency.
A: In the context of operations management, technology improvement can have a significant impact on the…
Q: Case Application Blurred Vision It's unrealistic to think that all products can be guaranteed 100…
A: The incident involving Bausch & Lomb and ReNu With MoistureLoc, their contact lens cleaning,…
Q: XYZ machine production company has three plants serving four distribution centers. Each plants…
A: Find the Given details below: Given details: From/To Distribution center D E F H Supply A…
Q: Write a note on Just-in-Time system for production planning.
A: Production planning is the process of selecting the resources, materials, and schedule needed to…
Q: How would you rate the importance of the following in developing an internal control system? Why?…
A: The regulatory classification cube is framework that provides comprehensive approach to designing,…
Q: critically explain innovation in relation to operation management
A: Innovation refers to the introduction of new ideas, products, services, or processes that provide…
Q: Comprehending the project better may be accomplished by drawing its map with and without the…
A: A useful tool for comprehending the project's overall structure, scope, and essential design…
Q: As the owner of a company that performs interior painting services, your bid was accepted and you…
A: Let's say you're the owner of a company that specialises in interior painting, and your bid to…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
- It is January 1 of year 0, and Merck is trying to determine whether to continue development of a new drug. The following information is relevant. You can assume that all cash flows occur at the ends of the respective years. Clinical trials (the trials where the drug is tested on humans) are equally likely to be completed in year 1 or 2. There is an 80% chance that clinical trials will succeed. If these trials fail, the FDA will not allow the drug to be marketed. The cost of clinical trials is assumed to follow a triangular distribution with best case 100 million, most likely case 150 million, and worst case 250 million. Clinical trial costs are incurred at the end of the year clinical trials are completed. If clinical trials succeed, the drug will be sold for five years, earning a profit of 6 per unit sold. If clinical trials succeed, a plant will be built during the same year trials are completed. The cost of the plant is assumed to follow a triangular distribution with best case 1 billion, most likely case 1.5 billion, and worst case 2.5 billion. The plant cost will be depreciated on a straight-line basis during the five years of sales. Sales begin the year after successful clinical trials. Of course, if the clinical trials fail, there are no sales. During the first year of sales, Merck believe sales will be between 100 million and 200 million units. Sales of 140 million units are assumed to be three times as likely as sales of 120 million units, and sales of 160 million units are assumed to be twice as likely as sales of 120 million units. Merck assumes that for years 2 to 5 that the drug is on the market, the growth rate will be the same each year. The annual growth in sales will be between 5% and 15%. There is a 25% chance that the annual growth will be 7% or less, a 50% chance that it will be 9% or less, and a 75% chance that it will be 12% or less. Cash flows are discounted 15% per year, and the tax rate is 40%. Use simulation to model Mercks situation. Based on the simulation output, would you recommend that Merck continue developing? Explain your reasoning. What are the three key drivers of the projects NPV? (Hint: The way the uncertainty about the first year sales is stated suggests using the General distribution, implemented with the RISKGENERAL function. Similarly, the way the uncertainty about the annual growth rate is stated suggests using the Cumul distribution, implemented with the RISKCUMUL function. Look these functions up in @RISKs online help.)In the financial world, there are many types of complex instruments called derivatives that derive their value from the value of an underlying asset. Consider the following simple derivative. A stocks current price is 80 per share. You purchase a derivative whose value to you becomes known a month from now. Specifically, let P be the price of the stock in a month. If P is between 75 and 85, the derivative is worth nothing to you. If P is less than 75, the derivative results in a loss of 100(75-P) dollars to you. (The factor of 100 is because many derivatives involve 100 shares.) If P is greater than 85, the derivative results in a gain of 100(P-85) dollars to you. Assume that the distribution of the change in the stock price from now to a month from now is normally distributed with mean 1 and standard deviation 8. Let EMV be the expected gain/loss from this derivative. It is a weighted average of all the possible losses and gains, weighted by their likelihoods. (Of course, any loss should be expressed as a negative number. For example, a loss of 1500 should be expressed as -1500.) Unfortunately, this is a difficult probability calculation, but EMV can be estimated by an @RISK simulation. Perform this simulation with at least 1000 iterations. What is your best estimate of EMV?Why might a borrower prefer a fully amortizing loan over an adjustable-rate mortgage? О The monthly mortgage payment will remain constant throughout the term of the loan The principal and interest payment varies each month. The payment towards interest increases as the loan is amortized. The interest rate may increase over the term of the loan
- You have your choice of two investment accounts.Investment A is a 15-year annuity that features end-of-month $1,500 paymentsand has an interest rate of 8.7 percent compounded monthly. Investment B is an8 percent continuously compounded lump-sum investment, also good for 15 years.How much money would you need to invest in B today for it to be worth as much asInvestment A 15 years from now?Scenario Your corporation has just approved an 8-year expansion plan to grow its market share. The plan requires an influx of cash in each of the 8 years. Management wants to develop a financial plan to ensure the cash needed for the expansion will be available at the beginning of each of the 8 years. The corporation has the following investment options: Security Price per unit Return Rate (%) Years to Maturity 1 $1,200 10.255 5 2 $1,000 6.7550 6 3 $1,175 12.110 7 Savings Account 5.500 Each unit of security 1, 2, and 3 guarantees to pay $1,000 at maturity. Investments in these securities must take place only at the beginning of year 1 and will be held until maturity. Any funds not invested in securities will be invested in a savings account that pays the annual interest rates noted above. The following table summarizes the cash needs for the expansion plan for each of the 8 years: Year 1 = $250,000 Year 5 = $295,000…Please answer along with the excel formulas - 1. Sue now has $125. How much would she have after 8 years if she leaves it invested at 8.5% with annual compounding? $205.83 $216.67 $228.07 $240.08 $252.08 2. Suppose you have $1,500 and plan to purchase a 5-year certificate of deposit (CD) that pays 3.5% interest, compounded annually. How much will you have when the CD matures? $1,781.53 $1,870.61 $1,964.14 $2,062.34 $2,165.46 3. Last year Rocco Corporation's sales were $225 million. If sales grow at 6% per year, how large (in millions) will they be 5 years later? $271.74 $286.05 $301.10 $316.16 $331.96
- Which of the following statements describes the payment amounts over the life of an ARM? A) Payments will remain constant for the life of the loan. B) Payments may go up or down in relation to the index rate. C) Payments may go up or down in relation to the margin rate. D) Payments may go up or down in relation to the equity in the property.All financial institutions provide different financial products and services that expose them to different types of risks that require different risk mitigating practices and techniques. These risks include; credit risk liquidity risk, interest rate risk, market risk, foreign exchange risk, solvency risks, operational risks and model risk. Which of the following is not true about credit risk? Select one: a. Performance risk is similar to credit risk. The borrower´s performance on an operation or specific project determines the degree of transaction risk. b. Measures based on the credit quality of the debt. As ratings are ordinal measures, they are sufficient to value credit risk. c. The risk of the issuers and borrowers are evaluated in prices in a capital market setting and can be seen visibly, or through credit spreads, or as add-ons to the risk-free rate. d. Credit risk is similar to country risk, which is essentially the risk crisis in a country. Examples of…Determine a capital good (an item with a useful life in excess of 1 year) that you need to acquire for your business. How will this asset improve the efficiency or effectiveness of your business? How is the future benefit of the asset translated into the present and quantified for a profitable decision for your business? Which technique to evaluate the data best suits your business? Explain.
- You have just received a business valuation report that is dated six months ago. Describe the factors that might have changed during the past six months and, therefore, caused the value of the business today to be different from the value six months ago. Which of these changes affect the expected cash flows, and which affect the discount rate that you would use in a discounted cash flow valuation of this company?Consider two equity market investors. The first investor is a hedge fund manager that relies on very active trading, and borrows from investment banks in order to leverage their investment. Their remuneration depends on total base fee earned by their fund as a percentage of net assets under management, plus a yearly bonus based on returns generated above a hurdle rate. The second investor is a high net-worth individual who is investing for their own retirement, which they anticipate to occur in 10 years or more. Identify three dimensions of risk that are likely to have significantly different impact on thesetwo investors. Explain the nature of the difference. Suggest aspects that each investor might monitor in order to control the risks most relevant to them.You have deposited $10,800 into an account that will earn an interest rate of 8% compounded semiannually. How much will you have in this account at the end of 10 years? $16,564.89 $27,213.75 $23,664.13 $28,396.96