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1.  Problem 11-15 (Risky Cash Flows) eBook Risky Cash Flows The Bartram-Pulley Company (BPC) must decide between...

1.  Problem 11-15 (Risky Cash Flows)

eBook

Risky Cash Flows

The Bartram-Pulley Company (BPC) must decide between two mutually exclusive investment projects. Each project costs $5,250 and has an expected life of 3 years. Annual net cash flows from each project begin 1 year after the initial investment is made and have the following probability distributions:

Project A Project B
Probability Cash Flows Probability Cash Flows
0.2 $7,000 0.2 $        0  
0.6 6,750 0.6 6,750
0.2 7,000 0.2 20,000

BPC has decided to evaluate the riskier project at an 11% rate and the less risky project at a 10% rate.

  1. What is the expected value of the annual cash flows from each project? Do not round intermediate calculations. Round your answers to the nearest dollar.

    Project A Project B
    Net cash flow $   $  

    What is the coefficient of variation (CV)? (Hint: σB=$6,521.89 and CVB=$0.81.) Do not round intermediate calculations. Round σ values to the nearest cent and CV values to two decimal places.

    σ CV
    Project A $  
    Project B $  
  2. What is the risk-adjusted NPV of each project? Do not round intermediate calculations. Round your answers to the nearest cent.

    Project A: $  
    Project B: $  
  3. If it were known that Project B is negatively correlated with other cash flows of the firm whereas Project A is positively correlated, how would this affect the decision?

    This would tend to reinforce the decision to -Select-accept reject Item 9 Project B.

    If Project B's cash flows were negatively correlated with gross domestic product (GDP), would that influence your assessment of its risk?

    -Select-Yes No

In: Finance

Modify your second order sequence code to test for oscillation. This can be done by calculating...

Modify your second order sequence code to test for oscillation. This can be done by calculating the difference between subsequent numbers in the sequence and observing whether the difference changes sign (ie: Do they swap from positive to negative or are they always positive or negative?). To complete this task will need to declare a “flag” variable. It can be of type int and have any name of your choosing. Given the initial values of x1 and x2 calculate the difference: x2 − x1. If it is positive, make the flag zero. If it is negative, make the flag one. You may assume that the difference will always be non-zero (ie: the initial values will never be equal). Each time a new entry in the sequence is generated re-calculate the value xn − xn−1. If, at any point, the sign of this calculation is different to the sign of x2 − x1 the program should print that the sequence oscillates and exit. If, after 20 iterations, no change of sign has been observed the program should print that no oscillation occurred and exita . Example 1: For the initial values x1 = 1, x2 = -0.5 and coefficients b1 = 0.2, b2 = 0.2 the sequence is: 1.00000 -0.50000 0.10000 -0.08000 0.00400 -0.01520 and the sequence oscillates (first difference is -1.5, then +0.6).

#include "stdio.h"

int main()
{
double b1=0.2,b2 =0.2,x1=1,x2=-0.5,x,d;
  
int n=2,flag;
d=x2-x1;
  
  
printf("%f\n%f\n",x1,x2);
  
while (n<5)
{
if(d<0){
flag=1;
} else if(d>0)
{
flag=0;
}
x=b1*x2+b2*x1;
printf("%f %f\n",x);
n++;
x1=x2;
x2=x;
  
}

return(0);   
}

I cant do the difference sequence

In: Computer Science

The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each project has an initial...

The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each project has an initial outflow of $6,500 and has an expected life of 3 years. Annual project cash flows begin 1 year after the initial investment and are subject to the following probability distributions:

Project A Project B
Probability Cash Flows Probability Cash Flows
0.2 $6,250 0.2 $          0  
0.6   6,500 0.6 6,500  
0.2   6,750 0.2 17,000  

BPC has decided to evaluate the riskier project at 12% and the less-risky project at 9%.

  1. What is each project's expected annual cash flow? Round your answers to the nearest cent.
    Project A: $  
    Project B: $  

    Project B's standard deviation (σB) is $5,464 and its coefficient of variation (CVB) is 0.75. What are the values of (σA) and (CVA)? Do not round intermediate calculations. Round your answer for standard deviation to the nearest cent and for coefficient of variation to two decimal places.
    σA: $  
    CVA:

  2. Based on their risk-adjusted NPVs, which project should BPC choose?
    -Select-Project AProject B

  3. If you knew that Project B's cash flows were negatively correlated with the firm's other cash flow, whereas Project A's flows were positively correlated, how might this affect the decision?
    -Select-This would make Project B more appealing.This would make Project B less appealing.

    If Project B's cash flows were negatively correlated with gross domestic product (GDP), while A's flows were positively correlated, would that influence your risk assessment?
    -Select-This would make Project B more appealing.This would make Project B less appealing.

In: Finance

The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each project has an initial...

The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each project has an initial outflow of $6,750 and has an expected life of 3 years. Annual project cash flows begin 1 year after the initial investment and are subject to the following probability distributions:

Project A Project B
Probability Cash Flows Probability Cash Flows
0.2 $6,500 0.2 $          0  
0.6   6,750 0.6 6,750  
0.2   7,000 0.2 18,000  

BPC has decided to evaluate the riskier project at 11% and the less-risky project at 8%.

  1. What is each project's expected annual cash flow? Round your answers to the nearest cent.
    Project A: $  
    Project B: $  

    Project B's standard deviation (σB) is $5,798 and its coefficient of variation (CVB) is 0.76. What are the values of (σA) and (CVA)? Do not round intermediate calculations. Round your answer for standard deviation to the nearest cent and for coefficient of variation to two decimal places.
    σA: $  
    CVA:

  2. Based on their risk-adjusted NPVs, which project should BPC choose?
    -Select-Project AProject BItem 5

  3. If you knew that Project B's cash flows were negatively correlated with the firm's other cash flow, whereas Project A's flows were positively correlated, how might this affect the decision?
    -Select-This would make Project B more appealing.This would make Project B less appealing.Item 6

    If Project B's cash flows were negatively correlated with gross domestic product (GDP), while A's flows were positively correlated, would that influence your risk assessment?
    -Select-This would make Project B more appealing.This would make Project B less appealing.

In: Finance

The market for hotels in Sacramento is described by the following equations: Qd=80−P and Qs=2P−100 (a)...

The market for hotels in Sacramento is described by the following equations: Qd=80−P and Qs=2P−100

(a) What is the equilibrium price and quantity?

(b) Suppose the city places a $2 tax on hotel rooms. How much do consumers now pay? How much do producers receive? How much tax revenue is raised by the tax?

(c) Based on your answer to part (b) is supply or demand more elastic?

In: Economics

Problems 1 – Explain each of the following statementsusing supply-and-demand diagrams.“When a cold snap...

Problems 1 – Explain each of the following statements using supply-and-demand diagrams.

  1. “When a cold snap hits Florida, the price of orange juice rises in supermarkets throughout the country.”

  2. “When the weather turns warm in New England every summer, the price of hotel rooms in Caribbean resorts plummets.”

  3. “When a war breaks out in the Middle East, the price of gasoline rises and the new price of a used Cadillac falls.”


In: Economics

Amusement Park ABC has an average of 230 customers per hour arriving at a ticket counter...

Amusement Park ABC has an average of 230 customers per hour arriving at a ticket counter where 8 employees are working. Each employee can serve an average of 30 customers per hour. The squared coefficient of variation for the inter-arrival times is 1.5 and 2 for the service times. a) On average, how many customers will be present at the ticket counter? b) On average, how long will a customer have to wait for an employee?

In: Statistics and Probability

you have a small hotel serving international customers from all over the world and you need...

you have a small hotel serving international customers from all over the world and you need to find a supplier that will provide you milk, cheese, and other dairy products. What will be the advantage and disadvantage of working with a small supplier who sells most of his products to you ? What will be the advantage and disadvantage of working with a very large supplier who sells only 1% of its products to you ? Discuss in ten or twelvesentences.

In: Operations Management

The manager of a small hotel resort is considering expansion. He would like to issue bonds...

The manager of a small hotel resort is considering expansion. He would like to issue bonds but do not quite understand why he may or may not receive what amount of money is stated on the face of the bond but he has to repay what is on the face of the face bond. Write a report to the manager explaining the market forces that determine how much money will be collected. Also explain how the interest payment on bonds are calculated and paid.

In: Accounting

please advise on the tendering and contractual arrangements for the construction of a 5-star hotel in...

please advise on the tendering and contractual arrangements for the construction of a 5-star hotel in Tung Chung new town. Since the proposed project is to be a major development, the Client is anxious on the cost aspects
The client wishes to have indication of the amount of investment and is concerned o the cost-control aspect. He also intends to commence the work at a reasonable time.
Suggest to the Client with reason, a suitable contractual arrangement for his consideration. (at less 350 words)

In: Finance