Tackle the following..

1. Assuming monetary benefits of a robotic surgery system at $75,000 per year, one-time (development) costs of $95,000, recurring costs of $35,000 per year, a discount rate of 10 percent, and a 5-year time horizon, calculate the net present value of these costs and benefit of this robotic surgery system. b. Also, calculate the overall benefit-cost ratio (BCR) of the project and then present a break-even analysis. At what point does break-even occur?

c. Now change the discount rate to 5 percent and redo the analysis.

d. Now change the recurring costs to $40,000 per year and redo the analysis, first for 10% and then for 5%.

Suppose the inverse demand curve for labor is: W = 1000 - 12E

and the inverse supply curve is:

(notice the exponent on "E") and the market is a monopsony.

W = 100 + E^2

a: What is the expression for the marginal cost of labor if the market is a non-discriminating monopsony?

b: How much labor will this non-discriminating monopsony employ maximize profits?

c: What will the non-discriminating monopsony pay?

d: Illustrate your answer in a diagram.

e: How much labor will the monopsony use to maximize profits if it is a perfectly discriminating monopsony?

Hint: You will need to apply the quadratic formula to solve parts (b) and (d). The quadratic formula is:

= ( 2 4)/2a

5. Oil price shocks and global inflation. (21 points). a. Can oil price shocks (increases in the price of oil) lead to a persistent increase in inflation? What are the effects on output and inflation? What is the role of monetary policy? (7 points)

61. An investor purchased Option A and Option B for a certain stock today, with strike prices 70 and 80, respectively. Both options are European one-year put options. Determine which statement is true about the moneyness of these options, based on a particular stock price. (A) If Option A is in-the-money, then Option B is in-the-money. (B) If Option A is at-the-money, then Option B is out-of-the-money. (C) If Option A is in-the-money, then Option B is out-of-the-money. (D) If Option A is out-of-the-money, then Option B is in-the-money.

62. The price of an asset will either rise by 25% or fall by 40% in 1 year, with equal probability. A European put option on this asset matures after 1 year. Assume the following: Price of the asset today: 100 Strike price of the put option: 130 Put option premium: 7 Annual effective risk free rate: 3% Calculate the expected profit of the put option. (A) 12.79 (B) 15.89 (C) 22.69 (D) 27.79 (E) 30.29

65. Assume that a single stock is the underlying asset for a forward contract, a K-strike call option, and a K-strike put option. Assume also that all three derivatives are evaluated at the same point in time. Which of the following formulas represents put-call parity? (A) Call Premium - Put Premium = Present Value (Forward Price - K) (B) Call Premium - Put Premium = Present Value (Forward Price) (C) Put Premium - Call Premium = 0 (D) Put Premium - Call Premium = Present Value (Forward Price - K) (E) Put Premium - Call Premium = Present Value (Forward Price)

66. The current price of a stock is 80. Both call and put options on this stock are available for purchase at a strike price of 65. Determine which of the following statements about these options is true. (A) Both the call and put options are at-the-money. (B) Both the call and put options are in-the-money. (C) Both the call and put options are out-of-the-money. (D) The call option is in-the-money, but the put option is out-of-the-money. (E) The call option is out-of-the-money, but the put option is in-the-money.