Karur Ltd. invited applications for issuing 2,40,000 equity shares of 10 each at a premium of 74 per share. The amount was payable as under :
On application - 4 per share (including premium + 2) 2
On allotment
- 34 per share
On first and final call - 36 per share (including premium * 2)
Applications for 3,00,000 shares were received and pro-rata allotment
was made to all the applicants. Excess application money received on
application was adjusted towards sums due on allotment. All calls were
made and were duly received except from Rohini, who failed to pay
allotment and first and final call on 7,500 shares applied by her. These
shares were forfeited. Afterwards, 40% of the forfeited shares were
re-issued at 11 per share as fully paid-up.
Pass the necessary journal entries in the books of Karur Ltd. Open
call-in-arrears and call-in-advance accounts wherever necessary.

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?