In the year prior to going public, a firm has revenues of $20 million and net income after taxes of $2 million. the firm has no debt, and revenue is expected to grow at 20% annually for the next five years and 5% annually thereafter. net profit margins are expected remain constant throughout. capital expenditures are expected to grow in line with depreciation and working capital requirements are minimal. the average beta of a publicly traded company in this industry is 1.50 and the average debt/equity ratio is 20%. the firm is managed very conservatively and does not intend to borrow through the foreseeable future. the treasury bond rate is 6% and the tax rate is 40%. the normal spread between the return on stocks and the risk free rate of return is believed to be 5.5%. reflecting the slower growth rate in the sixth year and beyond, the discount rate is expected to decline by 3 percentage points. estimate the value of the firm’s equity.

The hawthorne works was a large western electric factory with 45,000 employees. during the 1920s and 1930s, hawthorne works was the site of some well-known industrial studies. in one of the studies, researchers investigated the impact of different working conditions on worker productivity. prior to the start of the study, researchers secretly measured workers' productivity for several weeks. then researchers chose two workers, who then chose their own teams. the teams were separated from the general workforce and completed their work in different experiment rooms where the researchers could observe them more easily. over a 5-year period researchers manipulated the structure of the workday for each team (number and duration of breaks and number of hours per shift). for each of these changes in working conditions, the researchers measured the effect on productivity. for some conditions, such as frequent short breaks, workers rebelled by intentionally decreasing productivity.why did the researchers secretly measure the workers' productivity before creating the two treatment groups? a, to create similar treatment groups so that a cause-and-effect relationship could be establishedb, to draw conclusions about the productivity of all workers in the plant based on the test groupsc, to directly control for confounding variablesd, to provide a baseline for measuring worker productivity

Afreelance​ singer-songwriter is planning the restoration of a recently purchased civil​ war-era farmhouse. while he professes an enjoyment​ of, and talent in the construction​ trades, the theory of comparative advantage implies that a. the value of what he imports​ (in this​ case, professional contractor​ services) must equal the value of what he exports​ (songs). b. he should concentrate on the restoration work since his​ out-of-pocket costs will be much lower than if he hires professionals. c. ​self-sufficiency is​ advantageous, hence he should split his time between music and construction. d. the income lost while away from music will likely exceed the savings realized by doing the work​ himself, thus, he should hire professionals to do the restoration work. e. he ought to do as much of the work himself as possible since imports​ (in this​ case, professional contractor​ services) should always be restricted to those things that cannot be done internall

What are the general categories of capital budget scenarios? describe the overall decision-making context for each.