Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Macro-Micro Brew Pub is considering the purchase of one of two hops brew roasters less filling or tastes great. Both should provide a benefit over

Macro-Micro Brew Pub is considering the purchase of one of two hops brew roasters less filling or tastes great. Both should provide a benefit over a 10 year period and each requires an investment of $125,000. Looking at the following table which includes estimates of rates of return, probabilities for pessimistic, most likely and optimistic results.

Hopster A Less Filling

Hopster B Tastes Great

Investment

Amount

Probability

Amount

Probability

$125,000

1.00

$125,000

1.00

Rate of Return

Pessimistic

15%

.30

10%

.50

Likely

18%

.30

14%

.25

Optimistic

20%

.40

18%

.25

11) Range of rate of return

12) Expected Return?

13) Standard Deviation?

14) Best option?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions

Question

Discuss the various types of leasing.

Answered: 1 week ago

Question

Define the term "Leasing"

Answered: 1 week ago

Question

What do you mean by Dividend ?

Answered: 1 week ago

Question

What is database?

Answered: 1 week ago

Question

How efficient is your learning and development department?

Answered: 1 week ago