{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

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

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
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
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern