2) (a)An entrepreneur creates a wealth of amount of Rs.1,60,000 from her start-up 'Ecosense' on waste...
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2) (a)An entrepreneur creates a wealth of amount of Rs.1,60,000 from her start-up 'Ecosense' on waste management. The clients of the company are big corporate houses and the expenditure on waste management accounts for 50 % share of compulsory CSR activity. During phase 1 complete lockdown, the average net profit of the corporate houses went down by 35%. How much funding crunch did Ecosense had to face? Construct the lottery. (b)If there is a 15% chance of another complete lockdown and von Neumann- Morgenstern utility function of the entrepreneur is u = √w, defined over her wealth w. How much price he would be willing to pay for insuring his initial wealth? [Assume: price of unit insurance is q and the insurance company pays Re.1 if loss occurs]] 2) (a)An entrepreneur creates a wealth of amount of Rs.1,60,000 from her start-up 'Ecosense' on waste management. The clients of the company are big corporate houses and the expenditure on waste management accounts for 50 % share of compulsory CSR activity. During phase 1 complete lockdown, the average net profit of the corporate houses went down by 35%. How much funding crunch did Ecosense had to face? Construct the lottery. (b)If there is a 15% chance of another complete lockdown and von Neumann- Morgenstern utility function of the entrepreneur is u = √w, defined over her wealth w. How much price he would be willing to pay for insuring his initial wealth? [Assume: price of unit insurance is q and the insurance company pays Re.1 if loss occurs]]
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a To calculate the funding crunch faced by Ecosense during the lockdown we need to determine the decrease in the expenditure on waste management by th... View the full answer
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Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston
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