You can invest 100,000 into either project A or B. You estimate that A would succeed with a ...

You can invest 100,000 into either project A or B. You estimate that A would succeed with a probability of 0.5 in which case it doubles in value. If it fails, its scrap value is 50,000 . Project B would succeed with probability 0.8, in which case it would have a value of 150,000 . If it fails, project B's scrap value is 30,000 . Which project should you invest in?
 a. Project A
 b. Project B
 c. Neither of the projects
 d. You cannot tell from the information presented

QUESTION 2

Swing shift Your firm prints the novelty baseball cards that candy makers include in their bubblegum. Since you regularly sell 100,000 cards per week, you invested in four separate production lines that can each produce 25,000 cards in a standard 40 hour work week. Now a few of the candy makers are increasing their orders so that you will need to produce 150,000 cards per week, at least temporarily. If you produce these cards by adding a swing shift from 4pm to midnight, you will have to pay workers time and a half. What does this imply for the shape of your short-run marginal cost curve? What does it imply for your pricing?

QUESTION 3

You can invest 100,000 into either project A or B. You estimate that A would succeed with a probability of 0.6 in which case it doubles in value. If it fails, its scrap value is 50,000 . Project B would succeed with probability 0.7, in which case it would have a value of 150,000 . If it fails, project B's scrap value is 30,000 . Which project should you invest in
 a. Project A
 b. Project B
 c. Neither of the projects
 d. You cannot tell from the information presented

QUESTION 4

Wine Distribution Merger Two of UK's larger wine distribution companies, Bibendum and PLB, merged their businesses in October 2014 . Bibendum is primarily a restaurant supplier while PLB focuses on supplying wines to retailers. Does this suggest a mechanism through which the merger might create value?

QUESTION 5

You can invest 100,000 into either project A or B. You estimate that A would succeed with a probability of 0.7 in which case it doubles in value. If it fails, its scrap value is 50,000 . Project B would succeed with probability 0.6, in which case it would have a value of 150,000 . If it fails, project B's scrap value is 30,000 . Which project should you invest in?
 a. Project A
 b. Project B
 c. Neither of the projects
 d. You cannot tell from the information presented

QUESTION 6

It costs firm A 800 to produce five radios and it costs firm B 500 to produce five batteries. If Firm A merges with firm B, it can produce both the five radios and the five batteries for 1500 . The firm has experienced
 a. Economies of Scale
 b. Economies of Scope
 c. Diseconomies of Scale
  d. Diseconomies of Scope

QUESTION 7

In a coin toss bet, where both heads and tails are equally likely, you win a 3 on heads but lose 1 on tails. The expected value of the bet is
 a. 0.50
 b. -0.50
  c. 1.00
 d. 0.00