Asking for Question 1 Year 1

10:32 PM Sun Sep 26 51% E 0 ECON+366+-+Problem+Set+1+-+Avoiding+Releg..." 02 x Siegel_CTC_7e_0... x Siegel_CTC_7e_0... x Siegel_CTC_7e_01 x Genki An Integrate... x ECON+366+-+... O 2 T by "1", which influences the probability of being promoted/relegated and playing in a higher/lower league for any remaining years. Total Cost by Roster Type "q": Roster M Year 1 (1-game) - $200,000 Year 2 (10-games) - $2.000.000 Year 3 (10-games) - $2,000,000 Total for 3 Years - S4,200,000 Roster E Year 1 (l-game) - $400,000 Year 2 (10-games) - $4,000,000 Year 3 (10-games) - $4,000,000 Total for 3 Years - $8.400,000 Roster T Ycar 1 (1-game) - $100,000 Year 2 (10-games) - $1,000,000 Year 3 (10-games) - $1,000,000 Total for 3 Years - $2,100,000 Probability of Relegation and Promotion Each Year - By Roster Type: Note: Assume that, once relegated or promoted, the team will remain in that league through the end of Year 3. The team would be relegated AFTER the year in question. Roster M Year 1 - Promotion: 0% ; Relegation: 50% Year 2 - Promotion: 0% ; Relegation: 50% Year 3 - Promotion: 0%; Relegation: 50% Roster E Year 1 - Promotion: 0% ; Relegation: 20% Year 2 - Promotion: 0% ; Relegation: 20% Year 3 - Promotion: 0% ; Relegation: 20% Roster T Year 1 - Promotion: 0% ; Relegation: 80% Year 2 - Promotion: 0% ; Relegation: 80% Year 3 - Promotion: 0% ; Relegation: 80% 2 of 4 10:32 PM Sun Sep 26 51% E a ECON+366+-+Problem+Set+1+-+Avoiding+Releg... 02 x Siegel_CTC_7e_0... x Siegel_CTC_7e_0... x Siegel_CTC_7e_01 x Genki An Integrate... x ECON+366+-+... I 2 . 38- Total Revenue by League Type "l": Any Roster Year 1 (1-game) Tournament League - $500,000 Year 2 (10-games) Victor's League - $20,000,000 Tournament League - $5,000,000 Sporting League - $1,000,000 Year 3 (10-games) Victor's League - $20,000,000 Tournament League - $5,000,000 Sporting League - $1,000,000 As we're only considering a 3-year span, we will ignore any effects of inflation and even forgo calculating any differences in the time-value of money. The revenue is based on the league in which you are participating, not the specific quality of your team. 1 Year 1 Consider the following questions pertaining only to the remainder of the current (first season. 1. Calculate the total expected profit in Year 1 associated with each team quality choice for the one remaining game in the season. Roster M (Mediocre) - Mr = $_------- Roster E (Excellent) - 11 = $ Roster T (Terrible) - In = $ 2. Considering only the profit calculations above, which team quality should you choose in order to maximize profits in Year 1? Roster Quality -------- (M; E: or T) 2 Through Years 1 and 2 Consider the following questions pertaining only to the remainder of the current (first) scason, and the full second season. Remember, while the cost of the team is set based on the quality chosen, beginning in Year 2 you'll need to factor in the probability of having been relegated after year one. 3. Calculate the total expected profit in total for Year 1 and 2 associated with each team quality choice for the one remaining game in season 1 and the full season 2 Roster M (Mediocre) - II1 = $_------- Roster E (Excellent) - T1 = $_------- Roster T (Terrible) - 1 = $ 3 3 of 4 10:32 PM Sun Sep 26 51% E 0 ECON+366+-+Problem+Set+1+-+Avoiding+Releg..." 02 x Siegel_CTC_7e_0... x Siegel_CTC_7e_0... x Siegel_CTC_7e_01 x Genki An Integrate... x ECON+366+-+... O 2 T by "1", which influences the probability of being promoted/relegated and playing in a higher/lower league for any remaining years. Total Cost by Roster Type "q": Roster M Year 1 (1-game) - $200,000 Year 2 (10-games) - $2.000.000 Year 3 (10-games) - $2,000,000 Total for 3 Years - S4,200,000 Roster E Year 1 (l-game) - $400,000 Year 2 (10-games) - $4,000,000 Year 3 (10-games) - $4,000,000 Total for 3 Years - $8.400,000 Roster T Ycar 1 (1-game) - $100,000 Year 2 (10-games) - $1,000,000 Year 3 (10-games) - $1,000,000 Total for 3 Years - $2,100,000 Probability of Relegation and Promotion Each Year - By Roster Type: Note: Assume that, once relegated or promoted, the team will remain in that league through the end of Year 3. The team would be relegated AFTER the year in question. Roster M Year 1 - Promotion: 0% ; Relegation: 50% Year 2 - Promotion: 0% ; Relegation: 50% Year 3 - Promotion: 0%; Relegation: 50% Roster E Year 1 - Promotion: 0% ; Relegation: 20% Year 2 - Promotion: 0% ; Relegation: 20% Year 3 - Promotion: 0% ; Relegation: 20% Roster T Year 1 - Promotion: 0% ; Relegation: 80% Year 2 - Promotion: 0% ; Relegation: 80% Year 3 - Promotion: 0% ; Relegation: 80% 2 of 4 10:32 PM Sun Sep 26 51% E a ECON+366+-+Problem+Set+1+-+Avoiding+Releg... 02 x Siegel_CTC_7e_0... x Siegel_CTC_7e_0... x Siegel_CTC_7e_01 x Genki An Integrate... x ECON+366+-+... I 2 . 38- Total Revenue by League Type "l": Any Roster Year 1 (1-game) Tournament League - $500,000 Year 2 (10-games) Victor's League - $20,000,000 Tournament League - $5,000,000 Sporting League - $1,000,000 Year 3 (10-games) Victor's League - $20,000,000 Tournament League - $5,000,000 Sporting League - $1,000,000 As we're only considering a 3-year span, we will ignore any effects of inflation and even forgo calculating any differences in the time-value of money. The revenue is based on the league in which you are participating, not the specific quality of your team. 1 Year 1 Consider the following questions pertaining only to the remainder of the current (first season. 1. Calculate the total expected profit in Year 1 associated with each team quality choice for the one remaining game in the season. Roster M (Mediocre) - Mr = $_------- Roster E (Excellent) - 11 = $ Roster T (Terrible) - In = $ 2. Considering only the profit calculations above, which team quality should you choose in order to maximize profits in Year 1? Roster Quality -------- (M; E: or T) 2 Through Years 1 and 2 Consider the following questions pertaining only to the remainder of the current (first) scason, and the full second season. Remember, while the cost of the team is set based on the quality chosen, beginning in Year 2 you'll need to factor in the probability of having been relegated after year one. 3. Calculate the total expected profit in total for Year 1 and 2 associated with each team quality choice for the one remaining game in season 1 and the full season 2 Roster M (Mediocre) - II1 = $_------- Roster E (Excellent) - T1 = $_------- Roster T (Terrible) - 1 = $ 3 3 of 4