ou have an option to build a new mall or remove it. A new mall will cost P500M as investment to build it or demolish/remove an old one which cost P150M. To build – 75% chance of high demand – profit is P75M and a 25% weak demand w/ a profit of P25M. To remove – 60% chance of high demand – profit of P50M and a 40& weak demand w/ a profit of P10M. If you are the CEO, should you build or remove it. What is the EVM of either option? Draw the design tree
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You have an option to build a new mall or remove it.
A new mall will cost P500M as investment to build it or demolish/remove an old one which cost P150M.
To build – 75% chance of high demand – profit is P75M and a 25% weak demand w/ a profit of P25M.
To remove – 60% chance of high demand – profit of P50M and a 40& weak demand w/ a profit of P10M.
If you are the CEO, should you build or remove it.
What is the EVM of either option? Draw the design tree.
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- Ray Holt seeks an investment for his new business. The investor will bear all the costs(fixed + variable) and wants a rate of return of at least Y%. For the business fixed cost is Fc, selling price of a unit is Sp, and Cost of production of a unit is Cp. How many units, x, should Ray Holt maketo meet the investor’s rate of return requirement? If the requested rate of return is 10%, fixed cost is $10,000, selling price is $5, and cost of production is $3, how many units should be made?4. A bridge that was constructed at a cost of P75,000,000 is expected to last 30 years, at the end of which time its renewal cost will be P40,000,000. Annual repairs and maintenance are P3,000,000. What is the capitalized cost of the bridge at an interest of 6%?5. A telephone company purchased a microwave equipment for P6 Million with a salvage value of P600,000.00 over a period of 5 years and pay lump sum of P400,000.00 for maintenance cost. Minimum attractive rate of return is 16% annually. Compute the annual cost of investment of purchasing the microwave equipment. A. P1,592,362.54 B. P1,695,452.87 C. P1,803,374.41 D. P1,346,121.25
- A shopping center in Miami, Florida was purchased for $16 million and was expected to produce a first year annual NOI of $960,000. Financing was obtained at a 60% LTV ratio with a 4.5% annual interest rate payable monthly and fully amortizing over 25 years. What is the expected first year before tax cash return on invested equity? 8.25% 6.0% 4.5% 5.0%What is the amount of the annual coupon payment for a bond that has 6 years until maturity, sells for $1,050, and has a yield to matu Multiple Choice $98.64 $95.27 $101.38 $104.97Ally’s friend, Kat, is going to start selling cookies for her at local events. Ally is going to give her 40% of the gross profit for each dozen she sells as a commission. The investment and fixed costs have changed but the variable cost for each dozen cookies has not. Since the cookies are so popular they are raising the price to $15 per dozen. Ally’s costs are: Initial investment: $450Fixed costs: $375Variable costs: $3 (per dozen) Ally expects Kat to sell 100 dozen cookies at each event. What is Ally’s projected NET profit after ALL expenses including her initial investment for the first twelve events Kat attends and how much will Kat make in commissions? Ally’s Net Profit = ; Kat’s Commission = Question 18 options: 1) Ally’s Net Profit = $13,575; Kat’s Commission = $3,600 2) Ally’s Net Profit = $10,185; Kat’s Commission = $4,800 3) Ally’s Net Profit = $7,815; Kat’s Commission = $5,760 4) Ally’s Net Profit = $9,815; Kat’s Commission = $6,760
- 2. A city is holding an annual marathon event and wants to produce t-shits. Alfonso was able to obtain previous years' demand and probability data as given in below table. The selling price is $10, cost is $5, and the salvage value is $1. Calculate all payoff numbers in the table and profit. Show work. How many shirts should they prepare? Prepare 1000 Prepare 2000 Prepare 3000 Demand=1000| Demand=2000 Demand=3000 30% 35% 35% Profit IA suburban retail property in Arlington, Virginia with 60,000 square feet and 600 surface parking spaces was purchased for $6,000,000 at a cap rate of 6.0% with a 60% LTV interest-only loan at a 6% annual interest rate. If after six years the property appreciated by 60%, what would be the amount of the owner’s equity in the property at that time? a. $6,000,000 b. $2,400,000 c. $3,600,000 d. $9,600,000An elevator company has redesigned their product to be 50% moreenergy efficient than hydraulic designs. Two designs are beingconsidered for implementation in a new building.(a) Given an interest rate of 20% which bid should be accepted?Alternatives A BInstalled cost $45,000 $54,000Annual cost 2700 2850Salvage value 3000 4500Life, in years 10 15
- An apartment complex has a vacancy rate of 5%. If the apartment's PG is $450,000, what is the apartment's vacancy cost? $32,000 $22.500 S2.050 $47,500find the NPV FOR THE FOLL WITH A DISCOUNT RATE OF 15.15? 6,122,500.00 9,612,500.00 10,207,500.00 13,092,500.00 12,785,000.00 16,328,750.00 16,328,750.00Phillip Witt, president of Witt Input Devices, wishesto create a portfolio of local suppliers for his new line of keyboards.As the suppliers all reside in a location prone to hurricanes,tornadoes, flooding, and earthquakes, Phillip believes thatthe probability in any year of a " super-event" that might shutdown all suppliers at the same time for at least 2 weeks is 3%.Such a total shutdown would cost the company approximately$400,000. He estimates the " unique-event" risk for any of thesuppliers to be 5%. Assuming that the marginal cost of managingan additional supplier is $15,000 per year, how many suppliersshould Witt Input Devices use? Assume that up to three nearlyidentical local suppliers are available.