Suppose you think AppX stock is going to appreciate substantially in value in the next year. Say the stock’s current price, S0, is $100, and the call option expiring in one year has an exercise price, X, of $100 and is selling at a price, C, of $10. With $10,000 to invest, you are considering three alternatives: Invest all $10,000 in the stock, buying 100 shares. Invest all $10,000 in 1,000 options (10 contracts). Buy 100 options (one contract) for $1,000 and invest the remaining $9,000 in a money market fund paying 4% interest annually. a. Calculate the value of the investment for stock price one year from now? (Leave no cells blank - be certain to enter "0" wherever required.)

Abakery wants to determine how many trays of doughnuts it should prepare each day. demand is normal with a mean of 5 trays and standard deviation of 1 tray. if the owner wants a service level of at least 95%, how many trays should he prepare (rounded to the nearest whole tray)? assume doughnuts have no salvage value after the day is complete.

Mordica company identifies three activities in its manufacturing process: machine setups, machining, and inspections. estimated annual overhead cost for each activity is $156,960, $382,800, and $84,640, respectively. the cost driver for each activity and the expected annual usage are number of setups 2,180, machine hours 25,520, and number of inspections 1,840. compute the overhead rate for each activity. machine setups $ per setup machining $ per machine hour inspections $ per inspection

Suppose that a major city’s main thoroughfare, which is also an interstate highway, will be completely closed to traffic for two years, from january 2014 to december 2015, for reconstruction at a cost of $535 million. if the construction company were to keep the highway open for traffic during construction, the highway reconstruction project would take much longer and be more expensive. suppose that construction would take four years if the highway were kept open, at a total cost of $800 million. the state department of transportation had to make its decision in 2014, one year before the start of construction (so that the first payment was one year away). so the department of transportation had the following choices: (i) close the highway during construction, at an annual cost of $267.5 million per year for two years. (ii) keep the highway open during construction, at an annual cost of $200 million per year for four years. now suppose the interest rate is 80%. calculate the present value of the costs incurred under each plan.