A generous university benefactor has agreed to donate a large amount of money for student scholarships Custom Essay

1.  A liberal university upholder has agreed to donate a wide whole of money restraint scholar scholarships. The money can be supposing in undivided lump-sum of $10mln, or in competency, where $5.5mln can be supposing in year 1, and another $5.5mln can be supposing in year 2. Bombastic the gap attention rate is 6%, what is the exhibit compute of the remedy choice? Which of the span choices should be selected and why? How would your resolution alter if the gap attention blame was 12%? Please, pretence full your calculations.

2.  Volkswagen is regarding gap an Assembly Insert in Chattanooga, Tennessee, restraint the product of its 2012 Passat, tailored restraint the US communicate. The CEO of the society is regarding span immanent libertys restraint the magnitude of the insert: undivided is a wide magnitude with a incomplete annual product of 150,000 cars, and the other undivided is a smaller magnitude insert, which is cheaper to institute, save can singly product up to 80,000 cars per year. Depending on the expected equalize of insist restraint these cars in the US, Volkswagen has to career which liberty is past beneficial. The remittance blame is 6% and restraint plainness purposes, the CEO is singly evaluating a span-year horizon. The judicious factory setup consume, the expected insist scenarios, acquisition, and probabilities are pretences in the beneath consultation. Calculate the Net Exhibit Compute in each of the span libertys. Which liberty should the CEO appropriate and why? Please, pretence full your calculations.

 

Factory Magnitude Factory setup consume
($m)
Demand Year 1 Acquisition ($m) Probability Year 2 Acquisition ($m) Probability
Large 100 Low
Medium
High
20
80
100
0.4
0.4
0.2
60
90
150
0.3
0.5
0.2
Small 70 Low
Medium
High
30
50
70
0.4
0.4
0.2
70
80
90
0.3
0.5
0.

3. An angel investor is regarding investing in undivided of span start-up businesses and is evaluating the expected receipts along with the lavish of each liberty in regulate to appropriate the improve choice.

·         Business 1 is an innovative protein intelligence quaff, which has ENPV of $100,000 with a test flexuosity of $40,000.

·         Business 2 is a uncommon chicken wings dipping preserve with an ENPV of $60,000 and a test flexuosity of $25,000.

a)      Apply the coefficient-of-variation resolution measure to these choices to ascertain quenched which is preferred by the angel investor, bombastic that he/she is lavish-averse.

b)      Apply the maximin measure, bombastic that the surpass quenchedcome in Business 1 is to miss $5,000, seeing the surpass quenchedcome in Business 2 is to gain singly $5,000 in acquisition.

c)      If you were the angel investor, what is your confidence equipollent restraint these span projects? Are you lavish-averse, lavish-neutral, or lavish-lover?

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