$3 billion higher for the three years (2021-2023). What is the net present value of this increase if Netflix discounts the future at 5% a year
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Suppose that Netflix believes that due to the change in consumer preferences, the effect of the pandemic on its Net Income will annually be $3 billion higher for the three years (2021-2023). What is the
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- According to a new report from the United Nations' Intergovernmental Panel on Climate Change, hurricanes are becoming stronger, rainfalls are heavier and flood risk is higher. Living in an area that is somewhat close to the coast, you consider purchasing flood insurance for your home for this year. In your area, the cost of flood insurance is $772. If you are hit by a major flood, your anticipated costs for repair is $200,000. A minor flood in your area will result in an estimated repair cost of $30,000. If you choose to purchase flood insurance, it will cover the cost of damage up to $180,000. a. Develop a payoff table for this situation. What decision should you make using each strategy? i. Aggressive (Optimistic) ii. Conservative (Pessimistic) iii.Opportunity LossSmall businesses are facing increasing challenges as the fourth wave of the pandemic looms. New statistics published by the Canadian Federation of Independent Business (CFIB) reports small businesses owe an average of $170,000 and that number almost doubles to $333,174 for businesses in the hospitality sector. Corinne Pohlmann, senior vice-president of national affairs at CFIB, says repaying this debt will be the next major challenge as businesses head into the uncertainty of the fall. “It’s so incredibly important for consumers to really think about making a purchase at a smaller company rather than through Amazon or Walmart,” adds Ms. Pohlmann. “It’s the small businesses on Main Street that make a place unique.” Despite the headlines, entrepreneurs have remained resilient during this economic roller coaster brought on by the Covid-19 pandemic. “Keeping contact with customers – seeing them walk in, seeing the impact that you have on your customers and your neighbourhood – keeps us…Suppose that you recently bought a new formal outfit for a dedication dinner at Union Station, costing $200. You also bought tickets to this event that cost $1,000. Because the outfit has been altered, you cannot return it, and the tickets are non-refundable. The week before the event, your favorite band announces a surprise free concert, and because this is an obscure band, you are guaranteed to get in (that is, the free concert will not sell-out). Assume that the price of an Uber ride to concert and to Union Station is identical. Further, assume that you wouldn’t have to purchase any new clothes to attend the concert. You should go see the concert if: A) The marginal value of the concert is greater than $200B) The marginal value of the concert is greater than $1,200C) The marginal value of the concert is greater than the marginal value of attending the Law School dedication dinnerD) The marginal value of the concert is less than the marginal value of attenting the law school…
- Small businesses are facing increasing challenges as the fourth wave of the pandemic looms. Newstatistics published by the Canadian Federation of Independent Business (CFIB) reports smallbusinesses owe an average of $170,000 and that number almost doubles to $333,174 for businessesin the hospitality sector.Corinne Pohlmann, senior vice-president of national affairs at CFIB, says repaying this debt will bethe next major challenge as businesses head into the uncertainty of the fall. “It’s so incrediblyimportant for consumers to really think about making a purchase at a smaller company rather thanthrough Amazon or Walmart,” adds Ms. Pohlmann. “It’s the small businesses on Main Street thatmake a place unique.”Despite the headlines, entrepreneurs have remained resilient during this economic roller coasterbrought on by the Covid-19 pandemic. “Keeping contact with customers – seeing them walk in, seeingthe impact that you have on your customers and your neighbourhood – keeps us positive…Suppose that you recently bought a new formal outfit for a dedication dinner at Union Station, costing $200. You also bought tickets to this event that cost $1,000. Because the outfit has been altered, you cannot return it, and the tickets are non-refundable. The week before the event, your favorite band announces a surprise free concert, and because this is an obscure band, you are guaranteed to get in (that is, the free concert will not sell-out). Assume that the price of an Uber ride to concert and to Union Station is identical. Further, assume that you wouldn’t have to purchase any new clothes to attend the concert. You should go see the concert if: A) The marginal value of the concert is greater than $200B) The marginal value of the concert is greater than $1,200C) The marginal value of the concert is greater than the marginal value of attending the Law School dedication dinnerD) The marginal valueYou are deciding whether or not to purchase insurance. Your income is $100,000 and the chance of you getting sick is 30%. The insurance company is offering you a coinsurance rate of 0. 15 and the utility that you get from your disposable income is U = VY. If you get sick, your medical bills add up to $80,000. Assume that the insurance company charges the actuarially fair premium, and assume that you would purchase the same amount of medical care whether you are insured or not (i. e. M ^ (i) = M ^ u = M ^ *). Economic theory predicts that you will purchase insurance if the expected gain in utility from receiving the insurance payout when you are sick is greater than the expected loss in utility from paying the premium and remaining healthy. Using an expected utility diagram, show your decision process regarding whether to buy insurance or not. then show on the diagram the following: Disposable income if you remain healthy and do not purchase insurance Disposable income if you are…
- Suppose analysts agree that the losses resulting from climate change will reach x dollars 100 years from now. Use the concept of present value to explain why estimates of what needs to be spent today to combat those losses may vary widely. Would you expect the variation to narrow or get wider if the relevant losses were 200, rather than 100, years into the future? Complete the following using a principle amount = $100. Instructions: Enter your responses rounded to two decimal places. Discount rate / years 2% 5% 20 yrs O the higher rate O the lower rate 50 yrs 100 yrs Is there greater volatility with a lower discount rate or higher discount rate?The blue curve on the following graph shows the tradeoff between security and tourism; that is, combinations of security and tourism above the blue curve are not possible, and those on or below the curve are possible. The vertical axis measures security, defined as the probability that a terrorist is intercepted before entering the country. The horizontal axis measures the number of yearly visitors to the United States, in millions. Suppose that before 9/11, there were 55 million visitors per year, and the probability of intercepting any particular terrorist at customs and immigration was 10%, as indicated by the purple point (diamond symbol). After the 9/11 attacks, a debate is held in Congress. Members of both parties agree that security measures need to be improved. However, there is some disagreement as to how much additional security is needed. Suppose the first bill that is introduced mandates that security be improved so that the probability of catching a terrorist at the border…Ever since the Covid-19 pandemic hit the economy the price of gold has been sky high .Today price per gram of Gold is 5291tk. Imagine yourself as a risk averse investor, explain why you would be more or less willing to buy gold under the following circumstances: a) Prices in the gold market become more volatile. b) An additional tax is imposed on all Government bonds. c)Due to Covid-19 epidemic, the economy experiences a recession. d) You just inherited 1000000tk.
- Suppose a company is hiring graduates from Harvard and Yale and they want to hire people with very high predicted productivity. All they use to predict productivity is where they went to school and their GPA. There is no difference in average true ability between students at Harvard and Yale. However, while Yale GPAs are excellent predictors of performance at this company, Harvard GPAs are not. The company hires very few graduates and the cutoff for expected productivity is well above average. What will be true about the GPA cutoffs for the two schools? A. The cutoff for Harvard will be higher.B. The cutoff for Yale will be higher.C. The cutoffs will be the same.D. There is not enough information to answer this question.With a certain medical insurance policy, the customer must first pay an annual $350 deductible, and then the policy covers 70% of the cost of x-rays. The first insurance claims for a specific year submitted by a person are for two x-rays. The first x-ray cost $600, and the second x-ray cost $900. How much, in total, will he need to pay for these x-rays? He will be responsible for $People in a certain group have a 0.75% chance of dying this year. If a person in this group buys a life insurance policy for $6000 that pays $1,000,000 to her family if she dies this year and $0 otherwise, what is the expected value of the policy? (enter a minus sign if necessary and round your answer to the nearest dollar). $