An investor is deciding whether to build a retail store. If she invests in the store and it is successful, she expects a return of $100,000 in the first year. If the store is not successful, she will suffer a loss of $80,000. She guesses that the probability that the store will be a success is 0.6. To remove some of the uncertainty from this decision, the investor tries to establish more information, but this market research will cost $20,000. If she spends this money, she will have more confidence in her investment. There is a 0.6 probability that this information will be favorable; if it is, the likelihood that the store will be a success increases to 0.9. If the information is not favorable, the likelihood that the store will be a success reduces to only 0.2. Of course, she can elect to do nothing. A) Draw the associated decision tree.
B) What do you recommend?
C) How much is the information worth?
Replace all the monetary values with the following utilities
Monetary Value Utility
$100,000 1.00
$80,000 0.40
$0 0.20
-$20,000 0.10
-$80,000 0.05
-$100,000 0.00
A) What do you recommend, based on expected utility?
B) Is the investor a risk soeker or a risk avoider?

Aldrich and co. sold goods to donovan on credit. the amount owed grew steadily, and finally aldrich refused to sell any more to donovan unless donovan signed a promissory note for the amount due. donovan did not want to but signed the note because he had no money and needed more goods. when aldrich brought an action to enforce the note, donovan claimed that the note was not binding because it had been obtained by economic duress. was he correct? [aldrich & co. v. donovan, 778 p.2d 397 (mont.)]

Afirm's before-tax cost of debt, rd, is the interest rate that the firm must pay on debt. because interest is tax deductible, the relevant cost of debt used to calculate a firm's wacc is the cost of debt, rd (1 – t). the cost of debt is used in calculating the wacc because we are interested in maximizing the value of the firm's stock, and the stock price depends on cash flows. it is important to emphasize that the cost of debt is the interest rate on debt, not debt because our primary concern with the cost of capital is its use in capital budgeting decisions. the rate at which the firm has borrowed in the past is because we need to know the cost of capital. for these reasons, the on outstanding debt (which reflects current market conditions) is a better measure of the cost of debt than the . the on the company's -term debt is generally used to calculate the cost of debt because more often than not, the capital is being raised to fund -term projects. quantitative problem: 5 years ago, barton industries issued 25-year noncallable, semiannual bonds with a $1,600 face value and a 8% coupon, semiannual payment ($64 payment every 6 months). the bonds currently sell for $845.87. if the firm's marginal tax rate is 40%, what is the firm's after-tax cost of debt? round your answer to 2 decimal places. do not round intermediate calcu

What is the key to success in integrating both lethal and nonlethal activities during planning? including stakeholders once a comprehensive operational approach has been determined knowing the commander's decision making processes and "touch points" including stakeholders from the very beginning of the design and planning process including the liaison officers (lnos) in all the decision points?