You are trying to develop a strategy for investing in two different stocks. The anticipated annual return for a​ $1,000 investment in each stock under four different economic conditions has the probability distribution shown to the right. Complete parts​ (a) through​ (c) below.

Probability Economic condition Stock_X Stock_Y

0.1 Recession -150 -170

0.2 Slow_growth    20 50

0.4 Moderate_growth 100 130

0.3 Fast_growth 160 210

a. Compute the expected return for stock X and for stock Y. The expected return for stock X is ? ​(Type an integer or a​ decimal.)

b. Compute the standard deviation for stock X and for stock Y.

c. Which of the following best describes the decision that should be​ made? Choose the correct answer below.

A.Based on the expected ​value, stock Y should be chosen. ​However, stock Y has a larger standard ​deviation, resulting  in a higher ​risk, which should be taken into consideration.

B.Since the expected values are approximately the​ same, either stock can be invested in.​ However, stock X has a larger standard​ deviation, which results in a higher risk. Due to the higher risk of stock X​, stock Y should be invested in.

C.Since the expected values are approximately the​ same, either stock can be invested in.​ However, stock Y has a larger standard​ deviation, which results in a higher risk. Due to the higher risk of stock Y​, stock X should be invested in.

D.Based on the expected ​value, stock X should be chosen. ​However, stock X has a larger standard ​deviation, resulting  in a higher ​risk, which should be taken into consideration.

Hot & Cold and Caldo Freddo are two European manufacturers of home appliances that have merged. Hot & Cold has plants in France, Germany, and Finland, where Caldo Freddo has plants in the United Kingdom and Italy. The European market is divided into four regions: North, East, West, and South. Plant capacities (millions of units per year), annual fixed costs (millions of euros per year), regional demand (millions of units), and variable production and shipping costs (euros per unit) are listed in the following table.

Each appliance sells for an average price of 300 euros. All plants are currently treated as profit centers, and the company pays taxes separately for each plant. Tax rates in the various countries are as follows: France, 0.25; Germany, 0.25; Finland, 0.3; UK 0.2; Italy, 0.35.

1. Before the merger, what is the optimal network for each of the two firms if their goal is to minimize costs? What is the optimal network if the goal is to maximize after-tax profits?

This is the HW question I cannot get the correct answer for. I've completed the first step but I cannot seem to get the correct numbers for EFN for 20, 25 and 30%!?!? See below for given financial statements and my table with the pro forma of 20, 25 and 30% numbers

Problem 2: (Revised 6.3) Magazine Advertising: In a study of revenue from advertising, data were collected for 41 magazines list as follows. The variables observed are number of pages of advertising and advertising revenue. The names of the magazines are listed as:

(use sas）

Adv Revenue

25 50

15 49.7

20 34

17 30.7

23 27

17 26.3

14 24.6

22 16.9

12 16.7

15 14.6

8 13.8

7 13.2

9 13.1

12 10.6

1 8.8

6 8.7

12 8.5

9 8.3

7 8.2

9 8.2

7 7.3

1 7

77 6.6

13 6.2

5 5.8

7 5.1

13 4.1

4 3.9

6 3.9

3 3.5

6 3.3

4 3

3 2.5

3 2.3

5 2.3

4 1.8

4 1.5

3 1.3

3 1.3

4 1

2 0.3

1. Fit a linear regression equation relating advertising revenue to advertising pages. Verify that the fit is poor.
2. Choose an appropriate transformation of the data and fit the model to the transformed data. Evaluate the fit.
3. You should not be surprised by the presence of a large number of outliers because the magazines are highly heterogeneous and it is unrealistic to expect a single relationship to connect all of them. Find outliers and high leverage points. Delete the outliers and obtain an acceptable regression equation that relates advertising revenue to advertising pages.
4. For the deleted data, check the homogeneity of the variance. Choose an appropriate transformation of the data and fit the model to the transformed data. Evaluate the fit.

Silver Lining Inc. has a balanced scorecard with a strategy map that shows that delivery time and the number of erroneous shipments are expected to affect the company’s ability to satisfy the customer. Further, the strategy map for the balanced scorecard shows that the hours from ordered to delivered affects the percentage of customers who shop again, and the number of erroneous shipments affects the online customer satisfaction rating. The following information is also available:

• The company’s target hours from ordered to delivered is 40.
• Every hour over the ordered-to-delivered target results in a 0.5% decrease in the percentage of customers who shop again.
• The company’s target number of erroneous shipments per year is no more than 65.
• Every error over the erroneous shipments target results in a 0.5 point decrease in the online customer satisfaction rating and an added future financial loss of $500.
• The company estimates that for every 1% decrease in the percentage of customers who shop again, future profit decreases by $4,000 and market share decreases by 0.3%.
• The company also estimates that for every 1 point decrease in the overall online customer satisfaction rating (on a scale of 1 to 10), future profit decreases by $3,000 and market share decreases by 0.6%.

Using these estimates, determine how much future profit and future market share will change if:

• Average hours from ordered to shipped is 27.5.
• Average shipping time (hours from shipped to delivered) is 16.3.
• Number of erroneous shipments is 80.

Total decrease in future profit $37600(which was wrong)

Round your answer to two decimal places.

Total decrease in future market share 5.07%(which was wrong)

Mr. Jones is a retired 84 year-old farmer. He is still living in the farmhouse, but rents the farm land. He has an 8^th grade education. He is recently widowed, living alone, and adjusting to managing his health care on his own since his wife passed away. One area of concern is his medication management since he is taking 10 different prescription medications plus his 6 nonprescription medications. Mr. Jones is currently taking:

Ferrous sulfate 240 mg daily for anemia

Protonix 20 mg daily for GERD

Tums 1-2 tabs PRN for GERD

Flomax 0.4 mg daily for BPH

Restoril 15 mg as needed for sleep

Aspirin 81 mg daily for his heart

Lasix 40 mg daily for HTN

KCl 10 mEq daily for hypokalemia

Lisinopril 20 mg daily for HTN

Metoprolol 100 mg BID for HTN

Digoxin 125 mcg daily for A. Fib

Coumadin 4 mg on M/W/F and 5 mg on all other days for A. Fib

Nitroglycerin 0.3 mg q5 minutes PRN for angina

Acetaminophen 325 mg PRN for pain

Ginkgo Biloba 2 capsules daily for memory

St. John’s wort 1 capsule daily for anxiety

Directions:

Do any of these medications interact with each other? If so, which?

What effects can caffeine, nicotine, alcohol, or other nutrients have on the specific medications that Mr. Jones is taking?

How can age-related changes affect his medication effectiveness?

What other information would you like to know to ensure medication safety?

Consider the following payoff table in which D1 through D3 represent decision alternatives, S1 through S4 represent states of nature, and the values in the cells represent return on investments in millions.

    S1 S2 S3 S4

D1 30 20 -50 100

D2 60 150 40 -80

D3 40 10 80 80

1. What are the decision alternatives, and what are the chance events for this problem?

2. Construct a decision tree

3. What is the preferred alternative when the decision maker is optimistic?

4. What is the preferred alternative when the decision maker is conservative?

5. What is the preferred alternative when using the minimax regret criterion?

6. Suppose that each state of nature is equally likely to occur, what is the expected value of the

   payoff?

7. Assume the probabilities remain the same under state of natures in the preceding question (part

   f), what is the expected value of perfect information. (show your work to receive full credit)

8. Suppose P(s1) = 0.4, P(s2) = 0.3, and P(s3) = 0.2, what is the best decision using the expected

   value approach?

9. Perform sensitivity analysis on the best decision alternative payoffs from the preceding question (part h). Assuming the probabilities remain the same (as in part h), find the range of payoffs under state of nature s1 that will keep the solution found in the preceding question (part h) optimal. (show your work to receive full credit)

Note: You need to be able to interpret the results for parts c-e of this problem.
For part f, you need to know how to construct a risk profile for the optimal decision For parts g and i, you need to show your work to receive full credit.

Mr. Jones is a retired 84 year-old farmer. He is still living in the farmhouse, but rents the farm land. He has an 8th grade education. He is recently widowed, living alone, and adjusting to managing his health care on his own since his wife passed away. One area of concern is his medication management since he is taking 10 different prescription medications plus his 6 nonprescription medications. Mr. Jones is currently taking:

Ferrous sulfate 240 mg daily for anemia Protonix 20 mg daily for GERD Tums 1-2 tabs PRN for GERD Flomax 0.4 mg daily for BPH Restoril 15 mg as needed for sleep Aspirin 81 mg daily for his heart Lasix 40 mg daily for HTN KCl 10 mEq daily for hypokalemia Lisinopril 20 mg daily for HTN Metoprolol 100 mg BID for HTN Digoxin 125 mcg daily for A. Fib Coumadin 4 mg on M/W/F and 5 mg on all other days for A. Fib Nitroglycerin 0.3 mg q5 minutes PRN for angina Acetaminophen 325 mg PRN for pain Ginkgo Biloba 2 capsules daily for memory St. John’s wort 1 capsule daily for anxiety

Answer these questions

Do any of these medications interact with each other? If so, which?

What effects can caffeine, nicotine, alcohol, or other nutrients have on the specific medications that Mr. Jones is taking?

How can age-related changes affect his medication effectiveness?

What other information would you like to know to ensure medication safety?

Aiolos plc. is a small firm that produces and sells industrial machinery. The
following figures of the company are from the most recent financial period:
- Sales €20,000,000
- Earnings before interest and taxes €2,000,000
- Debt €10,000,000
- Interest expenses before tax €1,000,000
- Capital Expenditures €1,000,000
- Depreciation expenses are 50% of capital expenditures
- Book value of equity € 10,000,000
Also, you have collected financial information concerning the industrial
machinery sector of listed companies (all figures are on an average basis):
- Beta coefficient of listed companies of the sector 1.30
- Financial leverage in terms of debt to market value of equity 20%
- Firms in the sector trade three times (3x) their book value of equity.
- Effective tax rate 20% tax rate.
The management of Aiolos plc. expects that the company will experience a twostage
growth pattern. Specifically, during the first period which will last for the
next 5 years, net income, capital expenditures and depreciation will have a 25%
growth rate per annum, whereas during the second period (i.e. steady state),
net income will have a 7% growth rate to infinity and capital expenditures and
depreciation will offset each other.
Working capital requirements are estimated to remain stable during both growth
periods, while the proportion of net capital expenditure changes with debt will
remain to 0.3 for the next five years. The yield-to-maturity of the 10 year
government bond is 3%, while the market risk premium is 5%.

Required:
A. Estimate the cost of equity for this Aiolos plc.
B. Estimate the value of the owner's stake in Aiolos plc., using the free cash
flow to equity approach.
C. Identify and briefly describe any qualitative aspects of growth.