Chris LeBlanc estimates that if he does 5 hours of research using data that will cost $75, there is a good chance that he can improve his expected return on a $10,000, 1 year investment from 8 to 10 Chris feels that he must earn at least $20 per hour on the time he devotes to his research a Find th...

a b Increase in expected return New return of 10 Current re ...

Chris LeBlanc estimates that if he does 5 hours of research using data that will cost $75,

Question:

Chris LeBlanc estimates that if he does 5 hours of research using data that will cost $75, there is a good chance that he can improve his on a $10,000, 1-year investment from 8% to 10%. Chris feels that he must earn at least $20 per hour on the time he devotes to his research.
a. Find the cost of Chris’s research.
b. By how much (in dollars) will Chris’s return increase as a result of the research?
c. On a strict economic basis, should Chris perform the proposed research?
Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...