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Multinational Finance question: Suppose a laptop computer manufacturer estimate that it will cost $800(including a normal profit) to manufacture a laptop computer if a customer
Multinational Finance question:
Suppose a laptop computer manufacturer estimate that it will cost $800(including a normal profit) to manufacture a laptop computer if a customer does not return the computer he/she has ordered, $1,100 if he/she returns it: The average return rate is 10%.
What is the laptop computer price the manufacture would set?
How much is the implicit put option premium included in the laptop computer price?
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