McDowell Corporation spends the same amount on capital expenditures each year. All capital expenditures have an estimated useful life of 10 years. Over time, which of the following is most likely true? A. Capital expenditures and depreciation expense converge.
B. PP&E steadily increases to perpetuity.
C. PP&E approaches zero.
D. Capital expenditures > depreciation expense.

Your company is starting a new r& d initiative: a development of a new drug that dramatically reduces the addiction to smoking. the expert team estimates the probability of developing the drug succesfully at 60% and a chance of losing the investment of 40%. if the project is successful, your company would earn profits (after deducting the investment) of 9,000 (thousand usd). if the development is unsuccessful, the whole investment will be lost -1,000 (thousand usd). your company's risk preference is given by the expected utility function: u(x) v1000 +x, where x is the monetary outcome of a project. calculate the expected profit of the project . calculate the expected utility of the project . find the certainty equivalent of this r& d initiative . find the risk premium of this r& d initiative e is the company risk-averse, risk-loving or risk-neutral? why do you think so?