Question 1. How is the company’s optimal capital budget determined? Does the decision-making process in this case resemble the procedure used in determining the price and quantity of output? How? Can you provide examples from your work experience? Only has to be 150 words
Question 2. Analytical
Write a short analytical report (3 pages) on how to estimate project risk. In so doing, you define and describe (giving examples):
Discuss the strengths and shortcomings of these methods and the circumstances under which each can be applied. (Make sure I put ILO for quant in here)
Respond to this question in a short paragraph: Who has more information in the job market: the job seeker or the potential employer?
Question 3. – Quantitative Analysis Case
Write a Quantitative Analysis report on the following problems:
Year 1$10,000Year 2$20,000Year 3$30,000Year 4$20,000Year 5$5,000
The cost of the test would be $45,000, and the cost of mining would be $150,000. If he find gold, he expect s to net $600,000.
He estimates the following probabilities. If he starts mining without further tests, he estimates that the probability of finding gold is 55 percent. He expects that the probability of the test being successful is 60 percent. If the test is favorable, the probability is 85 percent that there is gold in the ground, but if the test is not favorable it is only 10 percent. Using a decision tree (that you must show in the paper), make a recommendation.