Annual savings due to an energy efficiency project have a most likely value of $30,000. The high estimate of $40,000 has a probability of .25, and the low estimate of $20,000 has a probability of .35. (a) What is the expected value for the annual savings? (b) What types of tax incentives are available to firms for green projects?
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Annual savings due to an energy efficiency project have a most likely value of $30,000. The high estimate of $40,000 has a probability of .25, and the low estimate of $20,000 has a probability of .35. (a) What is the expected value for the annual savings? (b) What types of tax incentives are available to firms for green projects?
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- Answer for (b) & (c) Please Airtight Manufacturing produces plastic cases that utility companies buy to protect electronic components on utility poles from weather damage. (a) The protective case currently used by utility companies has a 0.045 probability of cracking or breaking in any given year. When a protective case cracks or breaks, the utility company incurs a $800 expense to replace the case. What is the expected value of the utility company’s repair costs per protective case? Show your work. (b) Airtight has recently developed a stronger material for its protective case. The use of this stronger material reduces the case’s probability of cracking or breaking, and serves as a differentiating factor for estimating this product’s VTC. Use the product-needs matrix described in the course to classify this differentiating factor. What type of product characteristic is it? What type of customer need does it satisfy? Justify your answers. (c) If this stronger material enables…Spring 2024 An energy efficiency project has a first cost of $400,000, a life of 10 years, and no salvage value. Assume that the interest rate is 10%. The most likely value for annual savings is $50,000. The optimistic value for annual savings is $80,000 with a probability of 0.2. The pessimistic value is $40,000 with a probability of 0.25. a. What is the expected annual savings and the expected PW? b. Compute the PW for the pessimistic, most likely, and optimistic estimates of the annual savings. What is the expected PW? Spring 2024 1. An energy efficiency project has a first cost of $400,000, a life of 10 years, and no salvage value. Assume that the interest rate is 10%. The most likely value for annual savings is $50,000. The optimistic value for annual savings is $80,000 with a probability of 0.2. The pessimistic value is $40,000 with a probability of 0.25. What is the expected annual savings and the expected PW? b. Compute the PW for the pessimistic, most likely, and optimistic…Spring 2024 An energy efficiency project has a first cost of $400,000, a life of 10 years, and no salvage value. Assume that the interest rate is 10%. The most likely value for annual savings is $50,000. The optimistic value for annual savings is $80,000 with a probability of 0.2. The pessimistic value is $40,000 with a probability of 0.25. a. What is the expected annual savings and the expected PW? b. Compute the PW for the pessimistic, most likely, and optimistic estimates of the annual savings. What is the expected PW?
- 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.An investor is considering the following two investments.•Investment 1 has an expected rate of return (profit) of 8% and costs $40 per share.•Investment 2 has an expected rate of return (profit) of 5% and costs $30 per share.The investor has $100 to invest to maximize her total expected rate of return, and shemust buy whole shares (not partial/factional shares) of the investments.(a) Formulate the investor’s integer programming problem.(b) Solve the investor’s problem using branch and bound and explain youranswer. How much of each investment does the investor purchase?A 40-year-old man in the U.S. has a 0.244% risk of dying during the next year. An insurance company charges $300 per year for a life-insurance policy that pays a $100,000 death benefit. What is the expected value for the person buying the insurance? Round your answer to the nearest dollar. Expected Value: S-55 Question Help: Video Submit Question Question 5 x for the year Message instructor Based on historical data, an insurance company estimates that a particular customer has a 2.6% likelihood of having an accident in the next year, with the average insurance payout being $2700. If the company charges this customer an annual premium of $180, what is the company's expected value of this insurance policy? S Question Help: Message instructor
- 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? (А) 0.65 (в) 0.85 0.2 D) 0.8 (E) 0.15 (F) 0.25 G) 1A project has an uncertain first cost and useful life. What is the expected value for each variable? First Cost $300,000 400,000 600,000 Probability 0.2 0.5 0.3 Useful Life 4 5 6 0.3 0.5 0.2 ProbabilityDetermine whether or not to stock a large supply of steel. There is uncertainty in the price of steel. Based on past history the following data are available Price (future) Prob (Price) PW if stocked PW if not stocked High 0.3 100000 0 Medium 0.5 -10000 0 Low 0.2 -50000 0 What is the probability that stocking steel will result in a negative present worth (PW)?
- Please no written by hand A bank has two $10 million one-year loans. Possible outcomes are as follows: Outcome Neither loan defaults Loan 1 defaults, loan 2 does not default Loan 2 defaults, loan 1 does not default Both loans default Probablity 97.5% 1.25% 1.25% 0.00%.If a default occurs, losses can use normal distribution with mean $5 million and standard deviation $1 million to approximate. If a loan does not default, a profit of $0.2 million is made. (a). What is the VaR for of each project when the confidence level (a). What is the VaR for of each project when the confidence level is 99%? (b). What is the expected shortfall of each project when the confidence level is 99%? (c). What is the VaR for a portfolio consisting of the two investments when the confidence level is 99%?) (d). What is the expected shortfall for a portfolio consisting of the two investments when the confidence level is 99%?(ii) Jack, initially, has a wealth (W) equal to 2000 and will lose 1200 if his investment in a risky bond is unsuccessful and will gain 1200 if it is successful. The probability that the investment is successful is 0.75 and his utility function is given by U(W) = W^0.5. (a) Is this bond a fair bond? (b) What is Jack;s expected utility? (c) Suppose, there is a secured non-risky. gold bond. How much return should this gold bond offer, so that Jack chooses the gold bond instead of the risky bond.Calculate the expected flow rate (barrels per day) for each oil well using the estimated probabilities. Estimated Flow, bbl/Day 100 200 300 400 Probability of Flow North well 0.15 0.75 0.10 0.0 East well 0.35 0.15 0.45 0.05