Unit 5-Assignment
Activity #4: Submission
There are two parts to this assignment. In the first part, you will be explaining some of the concepts you learned about in the readings. In the second part, you will be performing calculations that apply economic models. Click here for the rubric that will assess your achievement of the Course Learning Outcome.
The format below is recommended for the essay portion of your paper.
Cover page (See APA Sample paper)
Introduction
Purpose of paper
Thesis sentence
Body (Cite sources using in-text citations.)
Main point 1
Example or evidence
Evidence (support from the literature)
Student’s original thoughts and ideas about the section’s content and a concluding thought
Main point 2
Example or evidence
Evidence (support from the literature)
Student’s original thoughts and ideas about the section’s content and a concluding thought
Main point 3
Example or evidence
Evidence (support from the literature)
Student’s original thoughts and ideas about the section’s content and a concluding thought
Conclusion – Summary of main points
Lessons Learned and Recommendations as needed
References – List the references you cited in the text of your paper according to APA format.
(Note: Do not include references that are not cited in the text of your paper). Use this template to complete this assignment.
1. Analytical
Write a short analytical report (3 pages) on how to estimate project risk. In so doing, you define and describe (giving examples):
Sensitivity analysis
Simulation Analysis
Discuss the strengths and shortcomings of these methods and the circumstances under which each can be applied.
Respond to this question in a short paragraph: Who has more information in the job market: the job seeker or the potential employer?
2. Quantitative Analysis Case
Write a Quantitative Analysis report on the following problems:
1. Your firm has an opportunity to make an investment of $50,000. Its cost of capital is 12 percent. It expects after-tax flows (including the tax shield from depreciation) for the next 5 years to follows: The manufacturer of high-quality flatbed scanners is trying to decide what price to set for its product. The costs of production and the demand for product are assumed to be as follows:
Year 1 $10,000
Year 2 $20,000
Year 3 $30,000
Year 4 $20,000
Year 5 $5,000
Calculate the NPV
Calculate the IRR (to the nearest percent)
Would you accept this project.
2. Sam Parkington has a nontransferable option to mine for gold on a certain piece of land. He has three choices of actions:
He can start mining immediately.
He can conduct further tests to see whether there is a good promise of finding gold.
He can drop the option.
The cost of the test would be $45,000, and the cost of mining would be $150,000. If he find gold, he expects 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.
Please submit your completed work
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