Rachel acquired a passive activity several years ago. Until 2016, the activity was profitable, and Rachel’s at-risk amount at the beginning of 2016 was $300,000. The activity produced losses of $80,000 in 2016, $50,000 in 2017, and $70,000 in 2018. In 2019, the activity produced income of $90,000. How much is Rachel’s suspended passive activity loss at the beginning of 2020? a. $150,000.
b. $110,000.
c. $60,000.
d. $0.
e. None of these.

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?