Q. In general, we say that two projects with cash flows xi and yi, i=0,1,2,.. n, cross if x0 < y0 and summation i=0 to n (xi) > summation i=0 to n (yi). Let Px(d) and Py(d) denote Current values of se two projects when discount factor is d.
Show that there is a crossover value c >0 such that Px(c) = Py(c)
Q. If Starbucks demand and supplies for premium coffee (one-pound bag) are in equilibrium and demand rises substantially. Illustrate what will happen if this market moves to new equilibrium?