# Homework_5_Answer_Key - AEM aloe Spring a009 Homework 5...

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AEM aloe Spring a009 Homework 5 Ansaer key 11 a1 X x p lx') xa pix) 90 0.5 ~5 y osp I ao o.a a~ a,ao 130 0.3 39 5,O 70 1.0 108 I a, ooo Under -the original pricing pan, the nverage price +or drills sold is 8 108. fie selling has o, s+anda~d deviat-ia 05 8 18.33. ' = fixapod -ha = la, 370 - lioa = sro- la,roo = aY 0 do\\arsa

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Yes, Re mean 06 +he probabilify di~tribufim of selling pice is higher wi* new pricing strategy (u-fl IlO) than with fhe old s-lru-fegy [LA-1 108). 7he sfcategg will thus yield a mean profit in the long pun. he new p~icing s*ategy also changes stand acd deviation, decreasing it Srom 818.33 -to 515.49. a\ . .. . c.51 \nr\\t\~q 0 Win NY and Boston p= [0.6)(0.3) = 0.18 Net pro\$it = ao, 000 t 5r, = 874,000 8 Win NY, lose Goston P' (0.6)(0.7) = 0. Y a tde+ progit = 40,000- q.000 = 8 11,000 8 Lose win ~0.~0.3) = la Met proZif= -Ll,OOO + 5Y,OOO=J 50,000 6) Lose and 8 &on l0~W10.7) = 0, a8 Ne+ prosit = -Y,OOO -9,000 = -8 13,000
Note: x mus+ be a r~hofe number, so +he upper class limits ace 4, 19, as, etc. fherehre, midpoi~s 05 the classes are 03 = 4.5, IO* 19 = 14.5, a a

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4) Let. A= NPV \$or egpanding semiconductor capacity (B millions) 8= NPV SOP entering home computer market L d a a la) aola)
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## This note was uploaded on 08/25/2010 for the course AEM 2100 taught by Professor Vanes,c. during the Spring '08 term at Cornell University (Engineering School).

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Homework_5_Answer_Key - AEM aloe Spring a009 Homework 5...

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