Demand for your firm's products is related to the state of the economy. If the economy is expanding next year, the company estimates sales to be $120 million. If there is a recession next year, sales are assessed to be $40 million. Otherwise, sales are estimated at $70 million. Economists have estimated the chances that the economy will be either expanding, in a recession, or normal next year to be 20%, 30%, and 50% respectively. Calculate the expected annual sales. Enter your numerical answer: expected annual sales: $ million
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- Exercise 4. You are a manager at a certain factory that designs small gadgets. The factory has been quite successful in the past years. Your CEO is wondering whether or not it is a good idea to expand the factory this year. The cost to expand the factory is $1.5M. Doing nothing will result in expected $3M in revenue if the economy stays good and people continue to buy plenty of gadgets, but only $1M in revenue is expected if the economy is bad. On the other hand, expanding the factory carries an expected $6M in revenue if economy is good and $2M if the economy is bad. Assume there is a 40% chance of a good economy and a 60% chance of a bad economy. Also, assume the costs of operating the factory account to $.5M if the factory is expanded and $.3M if not. a. Illustrate a Decision Tree showing these choices. b. What should you do?A department store is about to order deluxe, standard, and economy grade DVD players for next year's inventory. The state of the nation's economy (fate) during the year will be a factor on sales for that year. Records over the past 5 years show that if the economy is up, the store will net 4, 2, and 1 million dollers, respectively, on sales of deluxe, standard, and economy grade models; if the economy is down, the company will net -2, 1, and 4 million dollars, respectively, on sales of deluxe, standard, and economy grade models. Complete parts A through D below. The expected value of the game to the company if it orders only deluxe DVD players and fate plays the strategy "Down" is | (Simplify your answer.) The expected value of the game to the company if it plays its optimal strategy and fate plays the strategy "Down" is (Simplify your answer.)Suppose an individual places his money in a bank for a year then invests in apples for a year. Suppose the bank has an annual rate of 5%, compounded continuously. During the year in which the individual's money is in the bank, the apple grows in price from $1 to $1.25. Suppose its return doubles in the second year, when the individual's money is invested in the apples. He starts the first investment period with $100. How much money does he have after two years following the investment plan given above? Group of answer choices $105.1 $124.7 $154.4 $157.7
- Discuss three different possible techniques which a company can use to forecast the demand for its products.Optimizing economic agents use the real interest rate when thinking about the economic costs and returns of a loan. Suppose the average rate paid by banks on savings accounts is 0.75% at a time when inflation is around 1.65%. For the average saver, the real rate of interest on his or her savings is .......???%. (Round your response to two decimal places and use a minus sign if necessary.) If banks expect that the rate of inflation in the coming year will be 4.65% and they want a real return of 7.5% on a certain category of loans, then the nominal rate they should charge borrowers on those loans is .......???%. (Round your response to two decimal places.) If the economy experiences an unexpectedly low rate of inflation, the group that would tend to benefit is ___________. A. debtors (people or businesses who owe money). B. creditors (people or institutions that are owed money). C. both would benefit equally. D. neither benefits.fast please thank you 29.
- John runs a small bakery in his neighbourhood, John's Delightful Bakery. He bakes a variety of delicious pastries and bread, and his business has been quite successful. John used to work as a manager in a nearby restaurant before starting his bakery, and he quit his job to focus on the bakery. His salary was $25,000. To assess the overall performance of his bakery, John meticulously tracks his financials. For the year 2023, John has gathered the following information: NB: Total revenue from pastry and bread sales: $100,000. Cost of ingredients and materials: $30,000 Rent for the bakery space: $12,000 Wages paid to his employees: $20,000 Advertising expenses: $5,000 The bakery space could be rented out for $10,000 per year if John did not use it for his bakery. John invested $40,000 of his personal savings into the bakery when he started it. These savings could have earned him a 5% annual interest in a bank savings account. Calculate John's economic profit for the year 2023. a) $8,000…Calculate e) and f) Thank you.John runs a small bakery in his neighbourhood, John's Delightful Bakery. He bakes a variety of delicious pastries and bread, and his business has been quite successful. John used to work as a manager in a nearby restaurant before starting his bakery, and he quit his job to focus on the bakery. His salary was $25,000. To assess the overall performance of his bakery, John meticulously tracks his financials. For the year 2023, John has gathered the following information: · Total revenue from pastry and bread sales: $100,000. · Cost of ingredients and materials: $30,000 · Rent for the bakery space: $12,000 · Wages paid to his employees: $20,000 · Advertising expenses: $5,000 NB: · The bakery space could be rented out for $10,000 per year if John did not use it for his bakery.· John invested $40,000 of his personal savings into the bakery when he started it. These savings could have earned him a 5% annual interest in a bank savings account. Calculate John's economic profit for the year…
- The table below shows the demand for a particular brand of fax machine in a department store in each of the last twelve months. 12 Month Demand 12 15 19 5 6 7 23 27 30 32 33 37 3 4 8 9 10 11 12 41 49 58 a) Calculate the four month. What would be your forecast for the demand in month 13?please answer correctly fast:. a. Fred’s Hardware and Hobby House expects its sales to increase at a constant rate of 8 percent per year over the next three years. Current sales are $100,000. Forecast sales for each of the next three years.