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Week 6 Assignment

# Week 6 Assignment - 75 chance Profits \$1,000,000 or...

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Week 6 Kristyn Mugrauer Assignment 6 AC574 Chapter 16: 16-13: A. The best income statement statistic to use for this scenario is to focus on the loss of sales due to the website shutdown for one day. B. \$14,000,000 * 15% * (1/365) = \$5,753.42 \$14,000,000 * 20% * (1/365) = \$7,671.23 Therefore, the unavailability loss is between \$5,753 and \$7,671 in sales for 2004. 16-15: Initial Investment \$250,000 Legality settled after 1 year
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Unformatted text preview: 75% chance Profits \$1,000,000 or \$4,000,000 Profit Chances 50% - 50% Option Loss: i = 6% \$4,000,00 0 50% (\$250,000) (\$500,000) 1 year Today 50% \$1,000,00 0 {.5[(\$4 M - \$500,000)/1.06]} + {.5[(\$1 M - \$500,000)/1.06]} {.5[(\$3.5 M)/1.06]} + {.5[(\$500,000)/1.06]} {.5[\$3,301,887]} + {.5[\$471,698]} \$1,650,943 + \$235,849 \$1,886,792 \$250,000 + \$1,886,792 \$2,136,792...
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