Business, 23.06.2019 07:50 zitterkoph

Your company is starting a new r& d initiative: a development of a new drug that dramatically reduces the addiction to smoking. the expert team estimates the probability of developing the drug succesfully at 60% and a chance of losing the investment of 40%. if the project is successful, your company would earn profits (after deducting the investment) of 9,000 (thousand usd). if the development is unsuccessful, the whole investment will be lost -1,000 (thousand usd). your company's risk preference is given by the expected utility function: u(x) v1000 +x, where x is the monetary outcome of a project. calculate the expected profit of the project . calculate the expected utility of the project . find the certainty equivalent of this r& d initiative . find the risk premium of this r& d initiative e is the company risk-averse, risk-loving or risk-neutral? why do you think so?

Answers: 3

Show answers

Another question on Business

Business, 22.06.2019 12:40

When cell phones were first entering the market, they were relatively large and reception was undependable. all cell phones were essentially the same. but as the technology developed, many competitors entered, introducing features unique to their phones. today, cell phones are only a small fraction of the size and weight of their predecessors. consumers can buy cell phones with color screens, cameras, internet access, daily planners, or voice activation (and any combination of these features). the history of the cell phone demonstrates what marketing trend?

Answers: 3

Answer

Business, 23.06.2019 02:30

Harmon inc. produces joint products l, m, and n from a joint process. information concerning a batch produced in may at a joint cost of $75,000 was as follows:

Answers: 3

Answer

Business, 23.06.2019 07:00

Rare beef roasts can be cooked to what internal temperature? a) 120°f b) 130°f c) 145°f d) 155°f

Answers: 1

Answer

Business, 23.06.2019 10:10

Which of the following is not correct about renter's insurance? multiple choice renter's insurance is relatively inexpensive. renter's insurance covers the building and other structures on the site. typical coverage pays only the actual cash value of one's losses. the comprehensive form protects personal property against perils not specifically excluded in the policy. the broad form covers personal property against perils specified in the policy.

Answers: 3

Answer

You know the right answer?

Your company is starting a new r& d initiative: a development of a new drug that dramatically r...

Questions