ORIE 4150/5150
January 30, 2012
Note: Consider attending the Startup Career Fair from 3:00 PM to 7:00 PM Wednesday,
February 1, 2012 in Duffield Hall.
http:/www.engineering.cornell.edu/resources/career_services/employers/recruiting/startu
pfair.cfm
Parame

ORIE 4150/5150
Homework #10
Due April 20, 2012
1. 11-6 from the textbook. There are no tax effects.
2. 11-10 from the textbook. There are no tax effects.
3. Langdale Mill is considering purchasing a new packaging machine. The machine is in
the mid-year, 7

ORIE 4150/5150
Homework #12
Due May 4th 2012. You may submit it in class on May 2nd, or put it in the homework submission
box on the second floor of Rhodes Hall on or before May 4th.
1. Find the preferred alternative if C > A > F > B > D > E
A
B
C
D
E
F
a

Decision:
Decision:
Prob
State of Nature
Fair
-1,000,000
1,000,000
0.2
Sell
Lease
State of Nature
Good
10,000,000
9,000,000
0.5
State of Nature
Excellent
30,000,000
30,000,000
0.3
EV
13,800,000
13,700,000
Information Signal: Enthusiastic
States of
Nature

ORIE 4150/5150
Homework #11
Due April 27, 2012
1. Bright Lites Movie Company is contemplating the production of a feature-length
documentary concerning the building of the Alaska oil pipeline. It can either produce and sell the
film rights, or it can leas

ORIE 4150/5150
Sensitivity Analysis
April 9, 2012
Replacement Analysis:
I. Infinite Horizon
a.
The opportunity cost for keeping the defender is the after tax salvage value at time
zero. You will have to find the book value and determine the loss or gain o

ORIE 4150/5150
March 26, 2012
Prelims are returned to the students today. Please be sure that you know how to solve
the problems. It is not possible to distribute solutions as there were 14 different
versions of the exam. Please ask for assistance if you

ORIE 4150/5150
March 12, 2012
Inflation It has been defined as a process of continuously rising prices, or of
continuously falling value of money.
Price Indices
Price indices measure the current cost of a particular good (or basket of goods) relative to
a

ORIE 4150/5150
March 7, 2012
Additional Complications to Cash Flows
Reminder:
The prelim is either March 12th (makeup) or March 15th (regular), at 7:30 PM, in the
computer labs on the 4th floor of Rhodes. The coverage is up to and including
depreciation.

ORIE 4150/5150
January 23, 2012
Review of Accounting I
Note: The prerequisite for this class is ORIE 3150. That course used the text
Accounting, 4th Edition, Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso There is a
copy on reserve at the Olin Library

ORIE 4150/5150
April 27, 2012
Attribute Ranking
Compensatory Models
Section 14.7
Note: Final exam is Thursday, May 17th 2:00 4:30 PM Rhodes Hall 471
Note: The instructor is out of town from May 8th to May 13th.
Attribute Ranking by Pairwise Comparison
If

ORIE 4150/5150
April 25, 2012
Non-Compensatory Models
Section 14.6
Homework #11 comments
1. Bright Lites Movie Company Construct the decision tree and find the expected
values. Describe the optimal course of action.
Comment: Be sure to find the posterior

ORIE 4150/5150
March 26, 2012
Prelims are returned to the students today. Please be sure that you know how to solve
the problems. It is not possible to distribute solutions as there were 14 different
versions of the exam. Please ask for assistance if you

ORIE 4150/5150
Homework #6
Due March 9, 2012
Please keep a copy of this homework as it will not be graded and returned to you prior to the
prelim.
1. Wicks Company purchased an asset on July 4, 2007 and immediately put it into service. The
asset was in th

ORIE 4150/5150
Homework #5
Due March 2, 2012
1. Botwell Company purchased an asset in 2009. If the asset cost $300,000 including
installation, and the asset is in the mid-year MACRS 7-year class, find the annual depreciation
and book value over time for t

ORIE 4150/5150
Conditional Probability
Bayesian statistics plays a role in assessing additional sample information obtained from
various sources. Perhaps similar decisions were made in the past, or by others in the
same industry. This additional informati

ORIE 4150
Sensitivity Analysis
April 9, 2012
Replacement Analysis:
I. Infinite Horizon
a.
The opportunity cost for keeping the defender is the after tax salvage value at time
zero. You will have to find the book value and determine the loss or gain on sal

ORIE 4150/5150
April 6, 2012
Public Sector Recap.
Public Sector
- Benefits are hard to $ value
- Rare events are often critical
- May be multiple objectives
- Who is the stockholder?
- Finally, what is the interest rate to use?
Interest Rates
At a minimum

ORIE 4150/5150
Public Projects
Learning Objective
7.2 Understand how to perform a benefit-cost analysis for a single project and an
incremental benefit-cost analysis to choose between several alternative projects.
7.2 Benefit-Cost Analysis
7.2.1 Definitio

ORIE 4150/5150
April 2, 2012
Finite Horizon Replacement
1. For a MARR of 15%, we have the following after-tax costs and salvage values.
Age of asset refers to the age of the asset at the time at which the cash flow occurs.
a. Show by hand how to get d(0,

ORIE 4150/5150
Tornado Charts
A tornado chart is a handy way to plot the changes in PW or AW due to changes in
different input parameters. Well assume we are looking at the PW variation due to five
different input parameters. Here is what you need.
1. Ext