You lend $400,000 to your friend for seven years. According to the agreement, your friend has to repay $89,000 annually for the first four years with a fixed interest rate of 15% compounded annually. Your friend tries to bargain for a 13% charged for the remaining periods. What should be the annual repayment for the last three years?

Designing a Managerial Incentives Contract

Specific Electric Co. asks you to implement a pay-for-performance incentive contract for its new CEO and four EVPs on the Executive Committee. The five managers can either work really hard with 70 hour weeks at a personal opportunity cost of $200,000 in reduced personal entrepreneurship and increased stress-related health care costs or they can reduce effort, thereby avoiding the personal costs. The CEO and EVPs face three possible random outcomes: the probability of the company experiencing good luck is 30 percent, medium luck is 40 percent, and bad luck is 30 percent. Although the senior management team can distinguish the three “states” of luck as the quarter unfolds, the Compensation Committee of the Board of Directors (and the shareholders) cannot do so. Once the board designs an incentive contract, soon thereafter the good, medium, or bad luck occurs, and thereafter the senior managers decide to expend high or reduced work effort. One of the observable shareholder values listed below then results.

Assume the company has 10 million shares outstanding offered at a $65 initial share price, implying a $650,000,000 initial shareholder value. Since the EVPs and CEOs effort and the company’s luck are unobservable to the owners and company directors, it is not possible when the company’s share price falls to $50 and the company’s value to $500,000,000 to distinguish whether the company experienced reduced effort and medium luck or high effort and bad luck. Similarly, it is not possible to distinguish reduced effort and good luck from high effort and medium luck.

Answer the following questions from the perspective of a member of the Compensation Committee of the board of directors who is aligned with shareholders’ interests and is deciding on a performance-based pay plan (an “incentive contract”) for the CEO and EVPs.

Referenced Questions:

• 2. If you decide to pay 1 percent of the increase in shareholder value as a cash bonus, what performance level (what share price or shareholder value) in the table should trigger the bonus? Suppose you decide to elicit high effort by paying a bonus should the company’s value rise to $800,000,000. What two criticisms can you see of this incentive contract plan?
• 3. Suppose you decide to elicit high effort by paying a bonus only for an increase in the company’s value to $1,000,000,000. When, and if, good luck occurs, what two criticisms can you see of this incentive contract plan?
• 4. Suppose you decide to elicit high effort by paying the bonus when the company’s value falls to $500,000,000. When, and if, bad luck occurs, what two criticisms can you see of this incentive contract plan?

_______________________________________________________

#8) Design an incentive plan that seeks to elicit high effort by granting restricted stock. Show that one-half million shares granted at $70 improves shareholder value relative to all prior alternatives.

#9) Sketch the game tree for designing this optimal managerial incentive contract among the alternatives in Question 2, 3 and 4. Who makes the first choice? Who the second? What role does randomness play? Which bonus pay contract represents a best reply response in each endgame? Which bonus pay contract should the Compensation Committee of the Board select to maximize expected value? How does that compare with your selection based on the contingent claims analysis in Questions 7 and 8?

In order to study the quality of parts, a batch of 100 parts was checked at the enterprise. The results are presented in the following table:

Determine the mean, variance, mode, median, 1st and 3rd quartiles, coefficient of variation, plot a histogram, find asymmetry and kurtosis. Calculated indicators indicate in the figure.

1. Consider a biased dice, where the probability of rolling a 3 is 4 9 . The dice is rolled 7 times. If X denotes the number of 3’s thrown, then find the binomial distribution for x = 0, 1, . . . 7 and complete the following table (reproducing it in your written solutions). Give your answers to three decimal places.

2. The Maths Students Society (AUMS) decides to conduct small lottery each week to raise money. A participant must pays $2 to enter and chooses three distinct numbers between 1 and 10 (the order does not matter). If their three chosen numbers match the three numbers drawn by AUMS they win a $70 jackpot offered each week, otherwise they recieve nothing. No two entries can use the same numbers.

(a) How many distinct entries can there be?

(b) Write out the probability distribution of returns for one random entry?

(c) A student enters 15 times in one week with different sets of numbers. Determine their probability of winning and the expected return.

(d) A different student enters once each week for 12 weeks. Determine their probability of winning at least once and the expected return.

(e) Suppose 20 entries are made every week for a year. By first calculating the expected amount raised each week, determine how much money AUMS expects to raise in a year?

31. Consider the function f(x) = 3x⁴ − 8x³ + 1.

(a) Find the derivative f 0 (x), and hence the critical points for the function (for this question give both x and y coordinates).

(b) Classify the critical points using the first derivative test to determine if they are local maximum or minimum or neither.

(c) Find any points of inflection for f(x) (give both x and y coordinates).

Rainbow Company, a medium-sized company specialized in the manufacture and
distribution of equipment for babies and small children, is evaluating a new capital
expenditure project. In a joint venture with another separate company it has invented a
remote controlled pushchair, one of the first of its kind on the market. It has been unable
to obtain a patent for the invention, but is sure that it will monopolize the market for the
first three years. After this, it expects to be faced with stiff completion.
The details are set out below:
1. The project has an immediate cost of K2, 100,000
2. Sales are expected to be K1, 550, 000 per annum for the first three years, falling
to K650, 000 per annum for the last two years.
3. Cost of sales is 40% of sales
4. Distribution costs represents 10% of sales.
5. The company’s cost of capital is 5%
Required:
a) Calculate the NPV of the project at the company’s required rate of return. State
whether the project is financially viable? [5 Marks]
b) Calculate the projects Internal Rate of Return (IRR) to the nearest percent.

Summerville Inc. is considering an investment in one of two common stocks. Given the information in the popup​ window: ​, which investment is​ better, based on the risk​ (as measured by the standard​ deviation) and return of​ each? a. The expected rate of return for Stock A is nothing ​%. ​ (Round to two decimal​ places)

COMMON STOCK A COMMON STOCK B PROBABILITY RETURN PROBABILITY RETURN 0.20 12% 0.20 -6% 0.60 15% 0.30 7% 0.20 18% 0.30 15% 0.20 20%

The president of Hill​ Enterprises, Terri​ Hill, projects the​ firm's aggregate demand requirements over the next 8 months as​ follows:

Her operations manager is considering a new​ plan, which begins in January with

200 units of inventory on hand. Stockout cost of lost sales is

​$125 per unit. Inventory holding cost is

​$20 per unit per month. Ignore any​ idle-time costs. The plan is called plan A.

Plan​ A: Vary the workforce level to execute a strategy that produces the quantity demanded in the prior month. The December demand and rate of production are both

1,600 units per month. The cost of hiring additional workers is $50 per unit. The cost of laying off workers is

​$80 per unit. Evaluate this plan.

​(Enter all responses as whole numbers​.)

​Note: Both hiring and layoff costs are incurred in the month of the change. For​ example, going from

1,600 in January to

1,400 in February incurs a cost of layoff for

200 units in February.

The language is C++

Below are a list of sequences of numbers. Your job is to program each sequence with any loop of your preference (while, for, do/while). I want the code to output the sequence provided and the next number in the sequence (you can output more but there is 1 sequence that may only have 1 number after).. Please order and notate each sequence in your output –. The output should also be horizontal like that shown below (if you output it vertically it will be -10pts). Each sequence should be programed with only 1 loop and optionally 1 selection statement. Hint: a selection statement may be used for the last 3 problems.

Series 1:

15, 14, 13, 12, 11, ...

Series 2:

1, 2, 5, 14, 41, ...

Series 3:

2, 3, 5, 8, 12, 17, ...

Series 4:

15, 13, 11, 9, 7, ...

Series 5:

71, 142, 283, 564, 1125, 2246, 4487, 8968, ...

Series 6:

10, 5, 1, -2, -4, -5, -5, -4, -2, ...

Series 7:

0, 1, 3, 7, 15, 31, 63, ...

Series 8:

0, 1, 4, 13, 40, 121, ...

Series 9:

15, 29, 56, 108, 208, 400…

series 10: (finite)

0, 1, 3, 6, 10, 10, 11, 13, 16, 16, 17, 19, 19, ...

series 11:

7, 9, 14, 20, 27, 33, 42, 52, 63, 73, 86, ...

Series 12:

13, -21, 34, -55, 89 ...

Series 13:

0, 1, 4, 12, 32, 80, 192, ...

Provide a procedure to separate a mixture composed of 50% Ethyl Aminobenzoate, 40% Benzil, 10% and 1,4-dibromobenzene.