Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It...

Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts:

contract	NPV	Use of Facility
A	$2.05 Million	100%
B	$1.01	53%
C	$1.45	47%

a. What are the profitability indexes of the projects?

b. What should Fabulous Fabricators do?

Solutions

Expert Solution

jeff jeffy answered 1 month ago

Next > < Previous

Related Solutions

If a monopolist produces its product in two factories, it must determine how to allocate production...

If a monopolist produces its product in two factories, it must determine how to allocate production among those locations to minimize its total costs of production and thereby maximize its profits. It will do this by producing more at the factory with the lower marginal cost of production until the marginal cost of the last unit produced in each factory is equal: MC1 = MC2. If the marginal cost of producing at Factory 1 is MC1 = 2Q1, the marginal...

Molly and Jack are trying to decide how to allocate their investment portfolio. The risk-free rate...

Molly and Jack are trying to decide how to allocate their investment portfolio. The risk-free rate is 4%. An advisor has alerted them to 3 funds as follows. Fund E(r) σ Canadian Bond 6% 8% U.S. Equity 18% 25% Canadian Small Cap 15% 18% a) Is there one of these funds that stands out as being superior to the others? Support your conclusion with numerical analysis. b) Regardless of your answer in Part A, assume Molly and Jack both decide...

Does the public space meet the stated purpose? How? Does the public space meet the needs...

Does the public space meet the stated purpose? How? Does the public space meet the needs and interests of a variety of people? How? Has the designer created a safe public space? How? Give at least one specific suggestion for improving the public space.

Richard must decide how to allocate the capital in his portfolio. Richard has $23,000 available to...

Richard must decide how to allocate the capital in his portfolio. Richard has $23,000 available to invest. He finds the rates of return for four stocks for the past 12 years and the results are given below. Richard plans to invest 25% of his funds in each stock. Year Stock A (%) Stock B (%) Stock C (%) Stock D (%) 1 -4.080 -0.930 1.260 -6.090 2 16.540 4.225 -3.895 24.840 3 24.360 6.180 -5.850 36.570 4 16.360 4.180 -3.850...

Richard must decide how to allocate the capital in his portfolio. Richard has $2,000 available to...

Richard must decide how to allocate the capital in his portfolio. Richard has $2,000 available to invest. He finds the rates of return for four stocks for the past 12 years and the results are given below. Richard plans to invest 25% of his funds in each stock. a) How much will he invest in each stock? Enter Answer (1 Mark) b) The expected return of Richard's porfolio is: Enter Answer % (Round your answer to one one-hundreth of a...

Richard must decide how to allocate the capital in his portfolio. Richard has $54,000 available to...

Richard must decide how to allocate the capital in his portfolio. Richard has $54,000 available to invest. He finds the rates of return for four stocks for the past 12 years and the results are given below. Richard plans to invest 25% of his funds in each stock. a) How much will he invest in each stock? $13,500 (1 Mark) b) The expected return of Richard's porfolio is: Enter Answer % (Round your answer to one one-hundreth of a percent)...

Capital Investments has to decide how much money to allocate to advertise their financial products next...

Capital Investments has to decide how much money to allocate to advertise their financial products next year. The company is also considering offering more innovative cutting-edge financial products that will cater to a new market segment. The marketing department was given $10 million to work with. Capital Investments want to push their new investment products and decided that at least one-half of the advertising budget should be devoted to their new product line. To make sure that their current products...

Question 1 (4 Marks) Richard must decide how to allocate the capital in his portfolio. Richard...

Question 1 Richard must decide how to allocate the capital in his portfolio. Richard has $37,000 available to invest. He finds the rates of return for four stocks for the past 12 years and the results are given below. Richard plans to invest 25% of his funds in each stock. a) How much will he invest in each stock? $ Enter here (1 Mark) b) The expected value of Richard's porfolio is: Enter here % (Round your answer to one...

Question 1 (4 Marks) Richard must decide how to allocate the capital in his portfolio. Richard...

Question 1 Richard must decide how to allocate the capital in his portfolio. Richard has $37,000 available to invest. He finds the rates of return for four stocks for the past 12 years and the results are given below. Richard plans to invest 25% of his funds in each stock. a) How much will he invest in each stock? $ (1 Mark) b) The expected value of Richard's porfolio is: % (Round your answer to one one-hundreth of a percent)...

The Philadelphia Police Department must decide how to allocate police officers between West Philadelphia and Center...

The Philadelphia Police Department must decide how to allocate police officers between West Philadelphia and Center City. Measured in arrests per hour, the average product, total product, and marginal product in each of these two areas are given in the table below. Currently, the police department allocates 200 police officers to Center City and 300 to West Philadelphia. If police can be redeployed only in groups of 100, how, if at all, should the police department reallocate its officers to...

Subjects