Profit Maximization

There are only two firms in this industry. The total demand is Q=30-2O. The two firms have identical cost functions, TC=3+10Q. The two firms agree to collude and act as the industry monopoly. At what price and quantity will the cartel maximize its profit?

Why do insurance companies not offer policies to older individuals at a higher price rise to reflect this?

It is difficult for older people to buy private medical insurance at almost any price. Although it is true that older people have much higher probability of ilness and therefore claims agains insurances, why do insurance companies not offer policies to older individuals to reflect this?

Your firm has an opportunity to make an investment of $50,000

Cost of capital is 12%. Its expects aftertax cash flows (including the tax shield from depreciation) for the next 5 years are: Year 1 $ 10,000 Year 2 20,000 Year 3 30,000 Year 4 20,000 Year 5 5,000 a) Calculated the NPV. b) calculate the IRR c) Would you accept the project?

A U.S Corporation as a subsidiary in Netherlands.

A U.S Corporation as a subsidiary in Netherlands. It is deciding whether to invest 2 millions from the parent's funds in a 3 year project in the Netherlands. the after tax cash flows to the subsidiary are estimated to be as follows (in euros): Year 1 500.000 year 2 800,000 Year 3 900,000 The entire cash flows of the subsidiary are remitted to the parent annually. There is no additional tax or credits in the parent company country. the exchange rate today is ₤1/$1.20 the exchange rate forecast for the next 3 years is: Year 1 1/$1.15 Year 2 1/$1.10 Year 3 1/$1.05 Cost of capital for both companies is 13% 1) what is the NPV of this project for both compa... click for more

NPV of project

A firm must spend $ 10 millions today in a project. That is expected to bring in annual revenues of $1.5 millions for the next 10 years (beginning at the end of year 1).The firm cost of capital is 5%, what is the NPV of this project?