Question1Task 5 v3

You are considering making a movie. The movie is expected to cost $100 million upfront and takes a year to make. After that, it is expected to make $82 million in the first year it is released and $7 million for the following 20 years. Your cost of capital is 10%.

a.) What is the payback period of this investment? (Hint: consider that you look upfront at this, that is from year=0. For solving this task it is necessary to consider carefully the timeline of the cash flows in years=0,1,2,3,....,21,22)

The payback period is years. (round to a full year)

b.) If you require a payback period of two years, will you make the movie?

Answer:  (fill in "yes" or "no")

c.) What is the NPV of this project?

The NPV is $ million. (round to two decimals)

d.) According to the NPV rule, should you make the movie?

Answer:  (fill in "yes" or "no")

You are considering making a movie. The movie is expected to cost $100 million upfront and takes a year to make. After that, it is expected to make $83 million in the first year it is released and $8 million for the following 20 years. Your cost of capital is 10%.

a.) What is the payback period of this investment? (Hint: consider that you look upfront at this, that is from year=0. For solving this task it is necessary to consider carefully the timeline of the cash flows in years=0,1,2,3,....,21,22)

The payback period is years. (round to a full year)

b.) If you require a payback period of two years, will you make the movie?

Answer:  (fill in "yes" or "no")

c.) What is the NPV of this project?

The NPV is $ million. (round to two decimals)

d.) According to the NPV rule, should you make the movie?

Answer:  (fill in "yes" or "no")

You are considering making a movie. The movie is expected to cost $100 million upfront and takes a year to make. After that, it is expected to make $81 million in the first year it is released and $6 million for the following 20 years. Your cost of capital is 10%.

a.) What is the payback period of this investment? (Hint: consider that you look upfront at this, that is from year=0. For solving this task it is necessary to consider carefully the timeline of the cash flows in years=0,1,2,3,....,21,22)

The payback period is years. (round to a full year)

b.) If you require a payback period of two years, will you make the movie?

Answer:  (fill in "yes" or "no")

c.) What is the NPV of this project?

The NPV is $ million. (round to two decimals)

d.) According to the NPV rule, should you make the movie?

Answer:  (fill in "yes" or "no")

1. Provide an example of any two leading companies from the same industry which are competing directly for marketshare. Give a short profile (300-500 words) for each (provide references for your answers). 2. If you are the manager of one of these companies, what pricing policy do you adopt to be in the first position? Why? (100-200 words) 3. When the whole sector of the market is occupied by the little number of big corporations who share the leadership, what do we call this type of market structure? Explain in details the benefit of this market for the leading company and the disadvange of such situation on final consumers (300-500 words)

Note: Use Starbucks and Costa Coffee for this subject. ( please do not answer with handwriting ) ( Do not copy the answer from other resources)

1. A pipeline is to be inspected. There is a 10% chance that any 100ft section of pipeline will contain at least one defect (thinning walls, weld defect, etc). Assume the sections are independent (whether one sections fails or not is independent of whether other sections fail or not).
   1. What is the probability that, given 2 defective sections have been found so far, that exactly 12 sections of pipeline have been inspected?
   2. What is the probability that, given 50 sections have been inspected so far, that fewer than 5 defective sections have been found?
   3. What is the probability that the first defect will be found in the 10^th pipeline inspected?
   4. What is the average (expected) number of defects per 100 pipelines sections inspected?
   5. Comment on the independence assumption. Do you believe this is a realistic assumption for a pipeline? Why or why not?

Write a MATLAB script file to numerically solve any first order initial value problem using Rulers method. Once code is working use it to solve the mixing tank problem below. Use a step size of 1 minute, and simulate the solution until the tank contains no more salt. Plot both the Euler approximation and the exact solution on the same set of axes.

A tank contains 100 gallons of fresh water. At t=0 minutes, a solution containing 1 lb/gal of brine is pumped into the tank at a rate of 1 gal/min. while the mixture is pumped out at a rate of 2 gal/min. Model the corresponding initial value problem, and then determine the amount of salt in the tank as a function of time until the tank is empty.

Company «Rho», during the last fiscal year, had book value per share €100, earnings per share €10 and distributed €2 dividends per share. For the next 3 years the firm is expected to have a stable payout ratio and stable return on equity. From the 3rd year and onwards the firm is expected to distribute 50% of its earnings and to have a return on equity of 5%. The beta coefficient of the firm is 1.5, the return of the market 9% and the risk free rate 6%, answer questions

a)What is the cost of equity?What is the retention ratio in the high growth period?

b)What is the return on equity in the high growth period?What is the growth rate in the stable growth period?

c)What are the dividends in the first 3 years?

A professor notices that more and more students are using their notebook computers in class, presumably to take notes. He wonders if this may actually improve academic success. To test this, the professor records the number of times each student uses his or her computer during a class for one semester and the final grade in the class (out of 100 points). If notebook computer use during class is related to improved academic success, then a positive correlation should be evident. Given the following data, test whether notebook computer use and grades are related at a .05 level of significance.

State the conclusions for this test using APA format. First, describe the correlation coefficient in words and give the value of r. Then give the value of R2 and describe (in words) the effect size using the coefficient of determination. Finally, is there a significant relationship?

There are two polluters in a specific region, each of whom is currently emitting 100 units of pollution for a total of 200 units of pollution in the region. The government wants to reduce total pollution by 60 units (i.e., A_ST = 60 ). For simplicity, ignore enforcement costs. The total and marginal abatement costs of each polluter are as follows:                                       

      TAC_1 = 0.2A_1^2 → MAC_1 = 0.4A_1

TAC_2 = 0.3A_2^2 → MAC_2 = 0.6A_2

Command-and-Control Approach

a. Would it be cost-effective to achieve the desired 60 units of total abatement by requiring each polluter to reduce pollution by 30 units? Why or why not?

b. What is the total cost to each polluter in this case? What is the total cost to society?

c. What is the deadweight loss to society of this policy? (Hint: derive answer to (f) first)

Tom incorporates his sole proprietorship as Total Corporation and transfers its assets to Total in exchange for all 100 shares of Total stock and four $10,000 interest-bearing notes. The stock has a $125,000 FMV. The notes mature consecutively on the first four anniversaries of the incorporation date. The assets transferred are as follows:

Assets

Adjusted Basis FMV

Cash $ 5,000 $ 5,000

Equipment $130,000

Minus: Accumulated depreciation (70,000) 60,000 90,000

Building $100,000

Minus: Accumulated depreciation (49,000) 51,000   40,000

Land 24,000 30,000

Total $140,000 $165,000

a. What are the amounts and character of Tom’s recognized gains or losses?

b. What is Tom’s basis in the Total stock and notes?

c. What is Total’s basis in the property received from Tom?

Please use the new tax rules.