Assignment: Arundel Partners You should prepare the Arundel Partners case for class discussion. I will ask several members of the class to present their analyses of the case issues‚ and we will discuss the pros and cons of each approach. In particular‚ one might think of analyzing this case using the real options perspective‚ and/or one might think of analyzing this case using the traditional analysis perspective (DPL‚ @Risk‚ etc.). Choose one or both of these ways of thinking about the problem
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Linear Programming Notes VII Sensitivity Analysis 1 Introduction When you use a mathematical model to describe reality you must make approximations. The world is more complicated than the kinds of optimization problems that we are able to solve. Linearity assumptions usually are significant approximations. Another important approximation comes because you cannot be sure of the data that you put into the model. Your knowledge of the relevant technology may be imprecise‚ forcing you to approximate
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1. How sensitive is Db to s? To N? Db is the particular measure of species richness and it decreases when s (the number of different species) decreases. Db decreases when N (the number of individuals) increases. 2. How s and N affect the Simpson Index? Simpson Index is a measure of diversity which takes into account the number of species present‚ as well as the relative abundance of each species. In this case‚ a few rare species (s) with only a few representatives (N) will not affect the diversity
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Sensitivity analysis is a technique that indicates exactly how much a project’s profitability (NPV or IRR) will change in response to a given change in a single input variable‚ other things held constant. Sensitivity analysis begins with a base case developed using expected values (in the statistical sense) for all uncertain variables. Then‚ each uncertain variable is usually changed by a fixed percentage amount above and below its expected value‚ holding all other variables constant at their expected
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Case Write-Up: Arundel Partners 15.415 Finance Theory Section B‚ Oysters Arundel Partners: The Sequel Project With the purchase of sequel rights‚ what Arundel is achieving is to have a call option on the revenue that each movie brings. This helps to remove the uncertainty and risks associated with producing a movie‚ especially with regard to moviegoers’ taste. With the sequel right‚ Arundel will only exercise this option to produce a sequel if the first movie proved to be popular and the
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----------------------------------- spootyhead Apr 17‚ 2007 Arundel Partners Case Analysis ----------------------------------- Arundel Partners Case Analysis Executive Summary: A group of investors (Arundel group) is looking into the idea of purchasing the sequel rights associated with films produced by one or more major movie studios. Movie rights are to be purchased prior to films being made. Arundel wants to come up with a decision to either purchase all the sequel rights for
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mainly intrigued by the rare quality of objects. These objects possess a greater value because they are in limited supply‚ and are extremely exclusive. The Wilton House is one of the few institutions that possess some of the Arundel marbles‚ and numerous other sculptures. The Arundel marbles are from classical Rome. These possessions reinforce the idea that some objects are collected based on their rarity‚ rather than their intrinsic value. This provides the owner with a certain amount of social persuasion
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1. INTRODUCTION In 1992‚ Arundel Partners was looking into the idea of purchasing the sequel rights associated with films produced by one or more major movie studios. Movie rights were to be purchased prior to films being made. Arundel wanted to determine if this innovative business strategy is viable by estimating the value of the sequel rights. 2. OBJECTIVE Our report aims to investigate the viability of the implementation of Arundel’s strategy in purchasing sequel rights to produce
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2. How can the Capital Asset Pricing Model (CAPM) be used to estimate the cost of capital for real (not financial) investment decision? The CAPM is a sound mathematical model that emphasizes expected returns in the market. It offers a basis of assessment for financial decisions when compared to real investments. The expected return on any venture must be higher than what a firm can receive by investing an equal sum of money in financial investments. Some notable investors disagree with the use of
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Sensitivity Analysis Source: Introduction to Management Science 10 e‚ Anderson Sweeney Williams Example 1 Max s.t. 5x1 + 7x2 x1 < 6 2x1 + 3x2 < 19 x1 + x2 < 8 x1‚ x2 > 0 x2 8 7 6 5 4 3 2 1 x1 + x2 < 8 Max 5x1 + 7x2 x1 < 6 Optimal: x1 = 5‚ x2 = 3‚ z = 46 2x1 + 3x2 < 19 x1 1 2 3 4 5 6 7 8 9 10 x2 8 7 6 5 4 3 2 1 5 5 Feasible Region 1 1 1 2 3 4 4 4 3 3 2 2 5 6 7 8 9 10 x1 Example 1 • Range of Optimality for c1 The slope of the objective
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