Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
In the table below x denotes the X-Tract Company’s projected annual profit (in $1,000). The table also shows the probability of earning that profit. The negative value indicates a loss. |
x | f(x) | x = profit | ||
-100 | 0.01 | f(x) = probability | ||
-200 | 0.04 | |||
0 | ||||
100 | 0.26 | |||
200 | 0.54 | |||
300 | 0.05 | |||
400 | 0.02 |
10 | On average, |
a | $114.77 | thousand |
b | $112.52 | thousand |
c | $110.31 | thousand |
d | $108.15 | thousand |
Expert Solution
arrow_forward
Step 1
We need to find the standard deviation of profits.
Let Pn = Probability of state n
Xn = Profit of state n
Probability of 0 profit = 1 - (0.01 + 0.04 + 0.26 + 0.54 + 0.05 + 0.02) = 0.08
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- If a company has three lots of products for sale, purchase 1 (earliest) for $17, purchase 2 (middle) for $15, purchase 3 (latest) for $12, which of the following statements is true? A.This is a deflationary cost pattern. B.The next purchase will cost less than $12. C.This is an inflationary cost pattern. D.None of these statements can be verified.arrow_forwardSuppose that the profit (in dollars) from the sale of Kisses and Kreams is given by P(x, y) = 10x + 6.9y-0.001x²-0.045y² where x is the number of pounds of Kisses and y is the number of pounds of Kreams. Find P/ay, and give the approximate rate of change of profit with respect to the number of pounds of Kreams that are sold if 100 pounds of Kisses and 14 pounds of Kreams are currently being sold. (Give an exact answer. Do not round.) What does this mean? If the number of pounds of Kisses is held constant and the number of pounds of Kreams is increased from 14 to 15, the profit will increase by approximately $ Need Help? Read It Watch itarrow_forwardIn case of Walter Model, When rate of return is greater than cost of capital, in this case the profit is ___ a. Not ploughed back into business b. Reinvested back into business c. 100 percent distributed as Dividends d. 50 percent distributed as dividendsarrow_forward
- 6 Suppose Blooper's financials are as follows: See SPREADSHEET 9.1 Inputs Initial Investment Salvage value Initial revenue Initial expenses Inflation rate Discount rate ok Acct receivable as % of sales Investment as % of expenses Tax rate 150 Spreadsheet Name Investment 20 Salvage 150 Initial revenue 100 Initial expenses 5.0% 1.1% 1/4 15.0% 21.0% Inflation Discount rate AR Inv_pct Tax rate Calculate Blooper's working capital in each year of its project. Year Working Capital 0 1 23 4 5 6 COarrow_forwardOn the cost-volume-profit graph, which of the following would result into a decrease in the breakeven point (Assuming other factors remain unchanged)? а. Decrease in selling price per unit O b. None of the given answers С. Decrease in number of units sold d. Decrease in variable cost per unit е. Increase in fixed costsarrow_forwardNUBD Inc. ignored the effect of income taxes in its calculation of the sales volume needed to achieve a target profit of P1,000,000. If the company considers the impact of income taxes in its calculation, which of the following statements would be true? aTotal fixed cost will increase. bContribution margin per unit will decrease. cSales volume to reach an after-tax profit will increase. dSales price per unit will decrease.arrow_forward
- Assume a consumption function that takes on the following algebraic form: C= 400 + Assume thatY= 7600 what is the level of consumption at this income level. 0.6 Y. Answer: Determine the impact of a decrease in tax of $3 billion on aggregate level of output at equilibrium when the MPS is 0.25 Select one: Oa.-$12 Billion Ob$12 Billion 6s9 Billion ds9 Billionarrow_forwardgo.3arrow_forwardif a company profit margin is 0.6 and the current ratio is 0.6, is it advisable to invest in the company or not?arrow_forward
- Under a Cost-Plus approach, what is the interest rate (price) you will offer to your customers? Do not type the % symbol. Operating Expense per unit of deposit 3% Overhead Expense allocated per unit of deposit 2% Planned Profit Margin 3%arrow_forwardFrom the PW, AW, and FW values below, the conventional B/C ratio is closest to:a. 1.27b. 1.33c. 1.54d. 2.76arrow_forwardhello, I need help pleasearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
- Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage LearningCorporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education
Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education