Study Guides (247,997)
Canada (121,215)
Economics (239)
ECO359H5 (14)
Sun (12)

Practice problem--it's very helpful ~

3 Pages
Unlock Document


ECO3592011 UniversityofToronto PracticeProblems3 DepartmentofEconomics ECO 359 Practice Problems 3 1. Ross et al.s Corporate Finance text has a number of questions on real options at the end of Chapter 9 (5th edition). To familiarize yourself with the concept I advise you to try a few of these questions. 2. An independent Toronto movie company has hired you as a consultant. They have just finished filming their first blockbuster-to-be and are trying to determine the best strategy for its release. The company is well-known and respected among the local movie-goers, and the movie is guaranteed to make $10,000 in revenues if released in Toronto only (without any additional costs incurred). The outcome of the world-wide release is uncertain. The launch will require additional expenses of $550,000 -- mainly for the marketing campaign, without it the company will make zero profits outside Toronto. This promotion campaign can backfire, as it will reveal the (possibly very low) movie quality to everybody, including the loyal Toronto audience. If the campaign is successful (the revealed movie quality is high), the movie will yield $1,120,000 total (includin
More Less

Related notes for ECO359H5

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.