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5. Ann Tyler has come into an inheritance from her grandparents. She is attempting to decide among several investment alternatives. The return after 1 year is primarily dependent on the interest rate during the next year. 51 The rate is currently 7%, and Ann anticipates that it will stay the same or go up or down by at most two points. The various investment alternatives plus their returns ($10,000s), given the interest rate changes, are shown in the following table: Interest Rate Investment 5% 6% 7% 8% 9% Money market fund Stock growth fund 3.1 4 4.3 -3 -2 2.5 4 Bond fund 6. 3 3 Government fund 4 3.6 3.2 3 2.8 Risk fund -4.5 1.2 8.3 14.7 Savings bonds 3 3 3.2 3.4 3.5 Determine the best investment, using the following decision criteria. a. Maximax b. Maximin c. Equal likelihood

Small City currently has 1,020,000 square feet of office space, of which 765,000 square feet is occupied by 3,000 employees who are mainly involved in professional services such as finance, insurance, and real estate. Small City’s economy has been fairly strong in recent years, but employment growth is expected to be somewhat lower during the next few years, with projections of an increase of just 130 additional employees per year for the next three years. The amount of space per employee is expected to remain the same. However, a new 153,000 square foot office building was started before the recession and its space is expected to become available at the end of the current year (one year from now). No more space is expected to become available after that for quite some time.   Required: a. What is the current occupancy rate for office space in Small City? b. How much office space will be absorbed each year for the next three years? c. What will the occupancy rate be at the end of each…

Sarah has a startup business that makes two distinct bird feeders that she has designed. Sarah is planning on operating a small factory to build the bird feeders. She is looking at two possible locations, A and B. If she chooses location A, the lease on the building will be higher than location B, thus leading to higher fixed costs than what she would have with location B. However, if she makes more than 20,000 units, both locations will likely have to be expanded, both the physical buildings and the manufacturing equipment. Variable costs to produce each unit will vary by location as well as by product. For example, the first design will have variable costs of $10 and $15 in locations A and B respectively, while the second bird feeder design will have variable costs of $20 and $25 respectively depending on location. However, she thinks that variable costs will decrease if she sells more than 5,000 units, as she will receive discounts from her suppliers at that point. She is unsure of…