Clay earth company sells ceramic pottery at a wholesale price of $ 6.00 per unit. the variable cost of manufacture is $ 3.00 per unit. the fixed costs are $ 7 comma 700 per month. it sold 4 comma 000 units during this month. calculate clay earth's operating income (loss) for this month. a. ($ 7 comma 700) b. $ 4 comma 300 c. $ 16 comma 300 d. ($ 4 comma 300)

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?