a) Expected value for the Add Assembly Line option = $ ____ (enter your answer as a whole number).
a.1) Expected value for the Build New Plant option = $ _____ (enter your answer as a whole number).
a.2) The alternative that provides Weiss the greatest expected monetary value (EMV) is: add assembly line or build a new plant
a.3) The value of the return under this decision is ?$ ____ ?(enter your answer as a whole? number).
b) The expected value of perfect information ?(EVPI?) for Weiss? = ?$ _____ ?(enter your answer as a whole? number).
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a) Expected value for the Add Assembly Line option = $ ____ (enter your answer as...
Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers believe that there is a probability of 0.45 that the ATR Co. will come out with a competitive product. I Weiss adds an assembly line for the product and ATR Co. does not follow with a competitive product, Weiss's expected profit is $50,000; if Weiss adds an assembly line and ATR follows suit, Weiss still expects $15,000 profit. If Weiss adds a new plant addition and...
QUESTION 1 The ABC Co. is considering a new consumer product. They believe there is a probability of 0.30 that the XYZ CO. Will come out with a competitive product. If ABC adds an assembly line for the product and XYZ does not follow with a competitive product their expected profit is $45.000: if they add an assembly line and XYZ does follow they still expect a 512.000 profit. If ABC adds a new plant addition and XYZ does not...
B2: The management of Black Company is considering a new product. They believe that White Company may come out with a competing product. Black Company has the following alternatives: If Black adds an assembly line for the product and White does not follow with a competitive product, their expected profit is $160,000; If Black add an assembly line and White does follow, they still expect a $40,000 profit. - If Black adds a new plant addition and White does not...
MacDonald Products, Inc., of Clarkson, New York, has the option of (a) proceeding immediately with production of a new top-of-the-line stereo TV that has just completed prototype testing or (b) having the value analysis team complete a study If Ed Lusk, VP for operations, proceeds with the existing prototype (option a), the firm can expect sales to be 95,000 units at $550 each, with a probability of 0.77 and a 0.23 probability of 65,000 at $550. If, however, he uses...
MacDonald Products, Inc., of Clarkson, New York, has the option of (a) proceeding immediately with production of a new top-of-the-line stereo TV that has just completed prototype testing or (b) having the value analysis team complete a study. If Ed Lusk, VP for operations, proceeds with the existing prototype (option a), the firm can expect sales to be 100 comma 000 units at $610 each, with a probability of 0.77 and a 0.23 probability of 60 comma 000 at $610....
newconnect.mheducation.com Ch 14) Saved Suppose your company needs $17 million to build a new assembly line. Your target debt-equity ratio is .75. The flotation cost for new equity is 10 percent, but the flotation cost for debt is only 7 percent. Your boss has decided to fund the project by borrowing money because the flotation costs are lower and the needed funds are relatively small. a. What is your company's weighted average flotation cost, assuming all equity is raised externally?...
Suppose your company needs $14 million to build a new assembly line. Your target debt-equity ratio is .5. The flotation cost for new equity is 10 percent and the flotation cost for debt is 7 percent. Your boss has decided to fund the project by borrowing money because the flotation costs are lower and the needed funds are relatively small. a. What is your company’s weighted average flotation cost, assuming all equity is raised externally? (Do not round intermediate calculations...
Suppose your company needs $10 million to build a new assembly line. Your target det equity ratio is 3. The station cost for new equity is 6 percent and the flotion cost for debt is 3 percent. Your boss has decided to fund the project by borrowing money because the flotion costs are lower and the needed funds are relatively smo .. What is your company's weighted average flotation cost assuming allegitymised externaly? Do not found intermediate calculations and enter...
Suppose your company is thinking of purchasing a new assembly line for $900,000 in initial investment cost.The current interest rate is 6 percent.The new line is expected to last for four years and has no salvage value. It is anticipated that the new line will generate the following cash flows: Year 1 $500,000 Year 2 $375,000 Year 3 $ 25,000 Year 4 $ 20,000 1. This sums to greater than $900,000. Shouldn’t the company buy the assembly line? Why or why not? ( don't have to...
Problem 13-14 Calculating Flotation Costs Suppose your company needs $12 million to build a new assembly line. Your target debt-equity ratio is .5. The flotation cost for new equity is 12 percent and the flotation cost for debt is 9 percent. Your boss has decided to fund the project by borrowing money because the flotation costs are lower and the needed funds are relatively small. a. What is your company’s weighted average flotation cost, assuming all equity is raised externally?...