A project is economically feasible if it has a short payback period, a return on investment of 15% or more, a positive net present value, and positive discounted cash flows.
A project is economically feasible if it satisfies the following criteria:
Short Payback Period: The project should have a short payback period, meaning that the initial investment can be recovered within a reasonable timeframe. A shorter payback period indicates a quicker return on investment and reduces the risk associated with the project.
Return on Investment (ROI) of 15% or More: The project should generate a return on investment that meets or exceeds the minimum desired rate of return. Typically, a minimum ROI of 15% or more is considered favorable, as it indicates a higher profitability compared to alternative investment options.
Positive Net Present Value (NPV): The project's net present value should be positive. NPV takes into account the time value of money and calculates the present value of future cash flows generated by the project. A positive NPV indicates that the project is expected to generate more cash inflows than the initial investment, thus adding value to the organization.
Discounted Cash Flow (DCF): The project should demonstrate positive discounted cash flows over its life cycle. DCF analysis takes into account the time value of money by discounting future cash flows to their present value. Positive DCF indicates that the project's inflows outweigh the outflows after considering the opportunity cost of capital.
Long Payback Period: This option was cut off, so I can't provide a specific response for it. However, it's worth noting that a long payback period may be considered less favorable as it indicates a slower return on investment and ties up capital for an extended period of time.
Overall, for a project to be economically feasible, it should meet multiple criteria, including a short payback period, a high return on investment, positive net present value, and positive discounted cash flows. These factors ensure the project's profitability and alignment with the organization's financial objectives.
To know more about cash flows, click here https://brainly.com/question/27994727
#SPJ11
there is an obligation on your part; however, when you purchase When you purchase part. O Forward contracts, futures contracts. O Call options, put options. O Futures contract, put option O Futures contracts, call options. O Put options, forward contracts. there is no obligation on your
The obligation on your part when you purchase futures contracts and forward contracts, but there is no obligation on your part when you purchase call options and put options.
The reason for this is because a futures contract, also known as a forward contract, is a legally binding agreement between two parties to purchase or sell an underlying asset at a specific price and date in the future. The holder of a call option or a put option, on the other hand, has the right but not the responsibility to purchase or sell the underlying asset at a given price and time in the future.
You are committing to buy or sell an underlying asset at a specified price and date in the future when you purchase a futures contract or a forward contract. This means that you are obligated to fulfill the terms of the contract, whether the price of the underlying asset goes up or down. For example, if you buy a futures contract to buy 100 shares of XYZ stock at $50 per share in three months, you are obligated to buy those shares at that price in three months, regardless of whether the price of the stock goes up or down. This is why futures contracts and forward contracts are considered to be binding contracts. When you buy a call option or a put option, you are not obligated to buy or sell the underlying asset.
Instead, you have the right to buy or sell the asset at a specific price and date in the future, but you are not required to do so. For example, if you buy a call option to buy 100 shares of XYZ stock at $50 per share in three months, you have the right to buy those shares at that price in three months, but you are not required to do so. This is why call options and put options are considered to be non-binding contracts.
To Know more about binding agreement
https://brainly.com/question/30750666
#SPJ11
Mrs. A, a person of Indian origin, aged 40 years came to India on tour alongwith her baby aged 1.5 years. She carried with her following goods:
1. Personal effects like clothes of Mr. A valued at Rs. 40,000
2. Used personal effects of infant valued at Rs. 60,000
3. Laptop worth Rs. 65,000
4. Travel souvenirs valued at Rs. 25,000
5. 1 litre wine worth Rs. 5,000
6. Mobile worth Rs. 20,000
7. Digital camera Rs. 60,000
8. Cigars 20 worth Rs. 1,340
What is the customs duty payable?
The customs duty payable is ₹23,142. Mrs. A, a person of Indian origin, aged 40 years came to India on tour along with her baby aged 1.5 years. She carried with her the following goods:
1. Personal effects like the clothing of Mr. A valued at Rs. 40,000
2. Used personal effects of infant valued at Rs. 60,000
3. Laptop worth Rs. 65,000
4. Travel souvenirs valued at Rs. 25,000
5. 1 litre wine worth Rs. 5,000
6. Mobile worth Rs. 20,000
7. Digital camera Rs. 60,000
8. Cigars 20 worth Rs. 1,340
To find out the customs duty payable, we need to follow the given steps:
Personal effects (used) are exempted under the Baggage Rules. Therefore, no duty is leviable on the same.
Travel souvenirs valued at Rs. 25,000 - duty will be levied at 28.85% = Rs. 7,213.
Laptop worth Rs. 65,000 - duty will be levied at 28.85% = Rs. 18,746.
Mobile worth Rs. 20,000 - duty will be levied at 28.85% = Rs. 5,770.
Digital camera Rs. 60,000 - duty will be levied at 28.85% = Rs. 16,334.Cigars 20 worth Rs. 1,340 - duty will be levied at 150% = Rs. 2,010.
Wine 1 litre worth Rs. 5,000 - duty will be levied at 150% = Rs. 7,500.
Total customs duty payable is: 7,213 + 18,746 + 5,770 + 16,334 + 2,010 + 7,500 = ₹57,573
Since Mrs. A and her baby have spent more than 3 days abroad, they are allowed a basic exemption of Rs. 50,000 per person (assuming they have not claimed this exemption for the year). Therefore, the total exemption allowed is ₹1,00,000 (for Mrs. A and her baby).
Therefore, the customs duty payable by Mrs. A is Rs. 57,573 - Rs. 1,00,000 = ₹23,142.
Therefore, the customs duty payable is ₹23,142.
Learn more about customs duty: https://brainly.com/question/30103837
#SPJ11
You are employed as an industrial engineer at a company that manufactures computer chips. The smallest defect in a computer chip will render the entire chip worthless. Therefore, tight quality control measures must be established to monitor the quality of the chips. In the past, the defective percentage for these chips has been 1,10%. The sample size is 10000. Management has expressed doubts regarding the accuracy of the data being used and the results obtained. You were entreated with the responsibility of investigating the matter and report your findings to management. You are required to compute the upper and lower control limits for these computer chips using z = 3 (6 Marks). Show all formulas and calculations for full marks
The lowest control limit (LCL) and upper control limit (UCL) of the computer chips, respectively, are around 0.001109 and 2.089%, respectively.
The calculation is as follows:
The following equation may be used to determine the control limits for a sample's defect percentage:
Mean + (z * Standard Deviation) is the Upper Control Limit (UCL).
Mean - (z * Standard Deviation) is the Lower Control Limit (LCL).
Given: The defect rate (Mean) is 1.10 percent.
The sample size is 10,000.
Sqrt(p * (1 - p) / n), where p is the defect percentage, gives the standard deviation ().
Calculate the control limits as follows:
Decimalize the faulty percentage as follows:
Mean = 1.10% = 0.011
Do the standard deviation calculation:
Standard Deviation () is calculated as follows: sqrt(0.011 * (1 - 0.011) / 10,000), sqrt(0.010989 * 0.989011 / 10,000), sqrt(0.0000108789), and the result is around 0.003297.
As stated in the issue, change the z value to 3.
Do the upper control limit calculation:
UCL is calculated as Mean + (z * Standard Deviation), which is 0.011 + (3 * 0.003297) = 0.011 + 0.009891 = 0.020891 (approximately).
Create a computer lower control limit calculation:
LCL is equal to Mean - (z*Std Dev) = 0.011 - (3*0.003297) = 0.011 - 0.009891.
Learn more about upper control limit, from :
brainly.com/question/32363084
#SPJ4
Badan is a new autoparts business that sells autoparts which it bought from various suppliers The business commenced operating on 1 July 2020. The following events have occurred so far during the month: 1/7 Commenced business with cash of $140,000 and inventory worth $52,000 5/7 The owner withdrew $2,600 for her own personal use. 10/7 Sold autoparts costing $800 for $1800 and received cash. 17/7 Received a loan of $60,000 from the bank Required: Prepare the transaction analysis to record these events. (11 marks) If you accidentally delete the answer template, you may undo the deletion using "Ctrl + Z" (for Windows) or "Command + Z" (for Mac). If that does not work, please click on this link Answer Template. You may copy and paste the answer template to the answer box.
the transaction analysis to record the events for Badan, the autoparts business :
Date | Account | Debit | Credit-----------------------------------------------------------------
1/7 | Cash | $140,000 | 1/7 | Inventory | $52,000 |
1/7 | Owner's Equity | | $192,000-----------------------------------------------------------------
5/7 | Owner's Equity | $2,600 | 5/7 | Cash | | $2,600
-----------------------------------------------------------------10/7 | Cash | $1,800 |
10/7 | Sales Revenue | | $1,80010/7 | Cost of Goods Sold | $800 |
10/7 | Inventory | | $800-----------------------------------------------------------------
17/7 | Cash | $60,000 | 17/7 | Loan Payable | | $60,000
-----------------------------------------------------------------
In the transaction analysis, the date of each event is listed along with the accounts involved, the debit and credit amounts for each account.
| $52,000 |
1/7 | Owner's Equity | | $192,000-----------------------------------------------------------------
5/7 | Owner's Equity | $2,600 | 5/7 | Cash | | $2,600
-----------------------------------------------------------------10/7 | Cash | $1,800 |
10/7 | Sales Revenue | | $1,80010/7 | Cost of Goods Sold | $800 |
10/7 | Inventory | | $800-----------------------------------------------------------------
17/7 | Cash | $60,000 | 17/7 | Loan Payable | | $60,000
-----------------------------------------------------------------
In the transaction analysis, the date of each event is listed along with the accounts involved, the debit and credit amounts for each account. The debits and credits must balance in each transaction.
On 1/7, when Badan commenced business, it recorded the cash and inventory brought into the business, which increased the assets (cash and inventory) and the owner's equity (capital).
On 5/7, when the owner withdrew $2,600 for personal use, it reduced the owner's equity and cash.
On 10/7, when autoparts were sold for $1,800, it increased cash and sales revenue, while reducing inventory and recording the cost of goods sold.
On 17/7, when Badan received a loan from the bank, it increased the cash and recorded a liability in the form of a loan payable.
Please note that the amounts are assumed and the analysis provided is a simplified representation for illustrative purposes.
Learn more about business here:
https://brainly.com/question/15826604
#SPJ11
Imagine you are the brand manager for a major brand (preferably, the one that you have worked on in your coursework, but you may choose another if you prefer). You have been asked to present to the parent company CMO an idea for a new product or a new market. Do the following:
i) Scope out this presentation
ii) Describe the arguments you would you use to convince her that the idea would work
iii) Outlinetherisksinvolved,anddescribeyourplansforminimisingthem
As a brand manager for a major brand, it is your job to present a new product or new market idea to the parent company CMO.
Here are the ways you can scope out the presentation, describe the arguments that you would use to convince the CMO that the idea would work and outline the risks involved, and describe your plans for minimizing them. Scoping out the Presentation The following are the ways to scope out the presentation: Identify the problem that the new product or new market can solve and how it relates to the company's current offerings. Identify the target audience for the new product or new market. Determine the timeline and budget for the new product or new market. Describe the Arguments To convince the CMO that the idea would work, you can use the following arguments:Market opportunity: You can show how the new product or new market will increase the company's revenue and help it reach a new audience. You can also demonstrate that there is a gap in the market that the new product or new market can fill. Competitive advantage: You can show how the new product or new market can differentiate the company from its competitors and help it stand out in the market. Customer needs:
You can show how the new product or new market can meet customer needs and address their pain points. Outline the Risks Involved and Describe Your Plans for Minimizing Them To minimize the risks involved in introducing a new product or new market, you can take the following steps: Market research: Conduct market research to ensure that there is a demand for the new product or new market. Testing: Test the new product or new market with a small group of customers before launching it. Launch strategy: Develop a launch strategy that takes into account potential risks and how to mitigate them. Product quality: Ensure that the new product or new market meets the company's quality standards and is free from defects. Communication: Communicate with customers and stakeholders to address any concerns and provide updates on the progress of the new product or new market.
To know more about brand manager refer to:
https://brainly.com/question/30522813
#SPJ11
QUESTION 24 Which of the following statements is correct.
I . Growing perpetuity payments are always the same dollar amount.
II. Perpetuity investments offer infinite payments.
O a. I only
O b. ll only
O c. Both I and II
O d. Neither I nor Il
The correct answer is option O a. I only. Growing perpetuity payments are always the same dollar amount.
Statement I: Growing perpetuity payments are always the same dollar amount.
This statement is incorrect. Growing perpetuity payments increase over time at a fixed rate. The dollar amount of the payments increases with each period, reflecting the growth rate.
Statement II: Perpetuity investments offer infinite payments.
This statement is incorrect. Perpetuity investments offer payments that continue indefinitely, but they are not infinite. The payments are made at regular intervals for an indefinite period.
Therefore, neither statement I nor statement II is correct, making option O d. Neither I nor II the correct answer.
Learn more about payments here
https://brainly.com/question/29475683
#SPJ11
ironbridge holdings had sales of 265,450 last year and expects sales growth of 7.25% going forward. how long will it take ironbridge to double their sales at this rate?
It will take approximately 9.59 years for Ironbridge to double their sales at a growth rate of 7.25%.
Let's assume that Ironbridge needs t years to double their sales using the given percentage growth rate of 7.25% per annum. Now, as per the given information,
sales growth rate = 7.25% = 0.0725 (in decimal)
Now, we can use the compound interest formula to solve this problem, which is given as:
A = P(1 + r/n)^(n*t)
Here, A = Final amount or sales amount after t years, P = Principal amount or sales amount before t years, r = rate of interest (here, it is growth rate), n = number of times the interest is compounded (per year), t = time (in years)
So, in this case, the final sales amount would be twice the initial sales amount. i.e., A = 2P
So, we can rewrite the formula as:
2P = P(1 + 0.0725/n)^(n*t)2 = (1 + 0.0725/n)^(n*t)
Now, we can solve for t using logarithmic functions.
2 = (1 + 0.0725/n)^(n*t)
log(2) = log[(1 + 0.0725/n)^(n*t)]
log(2) = n*t*log(1 + 0.0725/n)
t = log(2) / [n * log(1 + 0.0725/n)]
Now, we need to find the value of n, which is the number of times the interest is compounded per year. As the question does not provide any information on this, let's assume that the interest is compounded once per year. Hence, n = 1
Now, substitute this value of n in the above equation:
t = log(2) / [1 * log(1 + 0.0725/1)]
t ≈ 9.59
Therefore, it will take approximately 9.59 years to double their sales.
Learn more about Compound interest:
https://brainly.com/question/28020457
#SPJ11
Kate has just graduated from business school and has been offered a good job at an attractive salary which she is sure she will accept. However, as the company is located outside city and quite a distance away from her home, Kate realizes she is going to need a car. Kate has never purchased a car before but knows she will want to purchase a new one. Within this context, discuss the buyer decision process, as it pertains to this particular situation.
The buying decision process is a procedure that is followed by the consumers before buying a product. It involves a sequence of steps taken by the consumer in deciding to buy the product. The following is the buyer decision process as it pertains to Kate’s situation.
Problem recognitionKate has realized that she will need to purchase a car in order to travel to work. The problem arises when she has to decide on which car to buy. Therefore, she has recognized the problem of selecting the car that will suit her needs.
Step 2: Information searchAfter recognizing the problem, Kate has conducted information search. She has started to look for different types of cars, the features they have, their prices, and the quality of the car. She has also gathered information from various sources including the internet, family members, friends, and dealerships.
Step 3: Evaluation of alternativesIn this step, Kate has evaluated the different alternatives and options that are available to her. She has taken into consideration factors such as the cost of the car, the quality of the car, fuel consumption, and maintenance cost.
Step 4: Purchase decisionAfter evaluating the different alternatives, Kate has decided on the car that she is going to purchase. She has chosen the car that suits her needs best based on the factors she considered in .
Step 5: Post-purchase evaluationAfter making the purchase, Kate will evaluate the car based on her satisfaction level. If she is satisfied with the car, then she will have no regrets and she will recommend the car to others. However, if she is not satisfied, she may return the car, which is known as post-purchase dissonance.Based on the information provided, Kate has followed the buyer decision process in order to select the car that best suits her needs. She has gone through the steps of problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase evaluation. By going through this process, she has ensured that she has made the right decision in selecting the car that will suit her needs. Therefore, this process is important as it helps buyers make informed decisions, and avoid post-purchase dissonance.
To konw more about product visit:
https://brainly.com/question/31815585
#SPJ11
Case 15–1 Rocky Plains Brewing Ltd.
On April 21, Mike Pearson, packaging materials manager for Rocky Plains Brewery Ltd. (Rocky Plains), in Billings, Montana, received a call from Gerald Gilpin, owner and president of Gilpin Printing Inc (Gilpin), a local label supplier. Two days earlier, Mike had notified Gerald that Rocky Plains was terminating the label contract with Gilpin as of May 30 and expected payment of a contractual rebate of $690,000. Gerald told Mike he refused to pay the rebate and demanded a $4.4 million wire transfer the next day in order to continue supply.
ROCKY PLAINS BREWING LTD.
Page 478
Rocky Plains was more than 100 years old and was one of the most recognized beer brands in the United States. The company had a reputation for producing products of exceptional quality, supported by high standards for raw materials, proven brewing methods, and rigorous production processes. After operating for more than 80 years as a family business, the company was presently owned by a large multinational brewery. The Billings facility brewed three to four million barrels of beer per year and employed approximately 500 people.*
GILPIN PRINTING
Gilpin was a family-owned business, and its president, Gerald Gilpin, was the son of the company’s founder. Gilpin had been Rocky Plains primary label supplier for approximately 15 years, and Mike considered Gilpin’s performance in the areas of quality and service to be good. Mike estimated that sales to Rocky Plains represented 45 percent to 50 percent of Gilpin’s total annual revenues.
Gilpin provided Rocky Plains with three-day service—typically orders for labels were placed on Thursday for delivery on Monday morning. As a result, Gilpin carried substantial raw material safety stock, and Rocky Plains carried minimal inventories for its labels.
Rocky Plains used "cut and stack" labels exclusively for its products, of which approximately 80 percent were metallized labels and the balance were paper labels. The majority of high-volume labels supplied by Gilpin were produced through a rotogravure printing process, which used a printing plate to stamp the ink on to the paper. Rotogravure printing required the label design to be etched onto a copper cylinder, which typically required a four-week lead time to create. Litho-offset printing was the second method used for Rocky Plains labels, typically for speciality and low-volume brands. In contrast to rotogravure printing, litho-offset used etched rubber cylinders.
CONTRACT REVIEW
Rocky Plains’ supply contract with Gilpin was to expire on May 30 and, after consultation with Mike’s boss, Brian Evans, director of purchasing, the decision had been made in November to test the market. Mike’s intention was to probe the market for better pricing, materials, and print methods. A major concern for Mike and Brian was ongoing financial problems at Gilpin (see Exhibit 1 for a summary of Gilpin’s financial statements). Gilpin had been unsuccessful in efforts to stem its financial losses during the past two years, and Mike had heard rumors that Gerald Gilpin was attempting to sell the business.
The case revolves around Rocky Plains Brewing Ltd., a well-established beer brand, and Gilpin Printing Inc., their primary label supplier. Rocky Plains had decided to terminate their label contract with Gilpin and requested a contractual rebate of $690,000.
However, Gerald Gilpin, the president of Gilpin, refused to pay the rebate and demanded a $4.4 million wire transfer to continue supply.
Rocky Plains was a renowned beer brand known for its exceptional quality and rigorous production processes. It was owned by a large multinational brewery and brewed millions of barrels of beer annually. On the other hand, Gilpin Printing was a family-owned business, providing labels to Rocky Plains for approximately 15 years. They had a good performance record in terms of quality and service, and their sales to Rocky Plains constituted a significant portion of their total revenues.
The labels supplied by Gilpin to Rocky Plains were primarily produced through rotogravure printing, which required a four-week lead time for label design etching. Litho-offset printing was used for specialty and low-volume brands. Rocky Plains had decided to test the market for better pricing, materials, and print methods as the contract with Gilpin was nearing its expiration.
One of the concerns for Rocky Plains was the financial troubles faced by Gilpin, as the company had been experiencing losses for the past two years. There were rumors of Gerald Gilpin attempting to sell the business.
The case sets the stage for a potential conflict between Rocky Plains and Gilpin regarding the termination of the contract and the payment of the contractual rebate. It highlights the importance of supplier relationships, financial considerations, and the need to explore alternatives in the supply chain.
Know more about financial considerations here
https://brainly.com/question/9583781#
#SPJ11
There are only two firms in an industry with demand curves q1 = 30 - P and q2 = 30 - P. Both have no fixed costs and each has a marginal cost of 10 per unit produced. If they behave as profit-maximizing price takers, each produces 20 units and sells them at a price of 10 so that each firm makes zero economic profits. If they formed a cartel, the profit-maximizing price is
Select one:
a. 25.
b. 20.
c. 15.
d. 10.
The profit-maximizing price if they built a cartel is 15 dollars. This corresponds to option c which also states the same figure.
Economic profits of the firms in the cartelThe marginal cost of producing goods is $10 per unit.
To maximize their profits, firms produce goods up to the point where their marginal cost equals their marginal revenue. For price-taking companies, the marginal revenue is equal to the price.
As a result, both companies are currently producing 20 units and selling them for $10 apiece so that each company earns zero economic profits.
Therefore, the overall production of the firms combined would be 40 units.
Each firm would sell its share of goods at a price of 15 dollars.
The total market demand is Q = 60 - 2P, where P is the price.
Since both firms will sell 20 units each, the total quantity of goods sold by the cartel would be Q = 40, and the market price would be P = $15.
The quantity sold is Q = 40, which is halfway between the quantity demanded by each firm (20 units) and the entire industry (60 - 2P).
When a cartel is formed, firms cooperate in order to raise their joint profits.
In the case of a cartel, the market price is typically greater than the competitive price.
When the two firms join forces and sell 40 units of the product at $15 per unit, the profits of each firm would be:
The profit per unit is calculated by subtracting the total cost from the total revenue.
The total revenue is obtained by multiplying the price per unit by the quantity sold.
Total revenue = $15 × 20 units
Total revenue = $300
The total cost consists of the sum of total variable cost and total fixed cost.
Total variable cost = Marginal cost × Quantity sold
Total variable cost = $10 × 20 units
Total variable cost = $200
Total cost = Total variable cost + Total fixed cost
Total cost = $200 + $0
Total cost = $200
Profit per unit = $300 - $200
Profit per unit = $100
Profit of the firm = Profit per unit × Quantity sold
Profit of the firm = $100 × 20 units
Profit of the firm = $2,000
Therefore, the profit-maximizing price is 15 dollars.
Learn more about profit at: https://brainly.com/question/1078746
#SPJ11
If someone believes that markets are always efficient then what is the best investment strategy for them if they want to invest in the stock market?
a.
Fundamental analysis
b.
Index investing
c.
None of the options
d.
Technical analysis
If someone believes that markets are always efficient then the best investment strategy for them if they want to invest in the stock market is:
b. Index investing.
Index investing is a passive investment strategy that aims to track or replicate the performance of a market index. The investor seeks to replicate the returns of the overall market rather than trying to outperform it. An index fund is the most popular investment vehicle for index investing. Index funds offer broad diversification and low costs, making them an attractive option for investors who believe that markets are efficient and that active management does not add value.
The primary advantage of index investing is that it allows investors to gain exposure to a broad market index while maintaining diversification and low costs. Since index funds track the performance of the overall market, they tend to outperform most actively managed mutual funds. Additionally, index funds provide investors with a low-cost way to gain exposure to a variety of asset classes and sectors of the market.
Thus, the correct option is : (b) Index investing.
To learn more about Index investing visit : https://brainly.com/question/16466166
#SPJ11
Wilson Corporation’s bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 10%. The bonds sell at a price of $850. What is their yield to maturity? Show calculations.
The yield to maturity (YTM) of Wilson Corporation's bonds is approximately 12.16%.
To calculate the yield to maturity (YTM) of Wilson Corporation's bonds, we can use the following formula:
YTM = (Annual Interest Payment + ((Par Value - Purchase Price) / Number of Years)) / ((Par Value + Purchase Price) / 2)
Given information:
- Annual Interest Payment: $100 (10% of the $1,000 par value)
- Par Value: $1,000
- Purchase Price: $850
- Number of Years: 12
Substituting these values into the formula, we get:
YTM = ($100 + (($1,000 - $850) / 12)) / (($1,000 + $850) / 2)
Simplifying further:
YTM = ($100 + ($150 / 12)) / ($1,850 / 2)
YTM = ($100 + $12.50) / $925
YTM = $112.50 / $925
YTM ≈ 0.1216 or 12.16%
Therefore, the yield to maturity (YTM) of Wilson Corporation's bonds is approximately 12.16%.
Learn more about yield to maturity
https://brainly.com/question/26376004
#SPJ11
You have $216,037 to invest in a stock portfolio (this amount is your original wealth). Your choices are Stock H, with an expected return of 15.16 percent, and Stock L, with an expected return of 8.71 percent. Legal constraints require you to invest at least $35,492 in stock L. If your goal is to create a portfolio with an expected return of 20.22 percent on your original wealth, what is the minimum amount you must borrow (and subsequently repay) at the risk free rate of 2.46 percent to achieve your goal? Answer in $ to two decimals.
Given that the investor has $216,037 to invest in a stock portfolio, let's assume x to be the amount invested in stock L. The remaining amount invested in Stock H would be (216,037 - x).From the problem statement, it is given that Legal constraints require the investor to invest at least $35,492 in stock L.
So the amount invested in stock L is greater than or equal to $35,492.x >= 35,492If the expected return from stock L is 8.71%, the expected return from stock H is 15.16% and the expected return from the portfolio is 20.22%, then, 8.71x + 15.16(216037 - x) = 20.22(216037).On solving the equation, we getx = 76544.43 (rounded off to 2 decimal places).
The minimum amount the investor needs to borrow to achieve the expected return of 20.22% on the portfolio is the difference between the amount invested in the portfolio and the original wealth of $216,037, which is, ($216,037 - $76,544.43) = $139,492.57 (rounded off to 2 decimal places).Therefore, the minimum amount the investor must borrow is $139,492.57.
To know more about investor visit:-
https://brainly.com/question/31933294
#SPJ11
Calculate the return of Netflix, Inc. (NFLX) for May 13- May 27,
May 27, and May 27- June 10.
Netflix, Inc. (NFLX) has had an enormous success in the streaming video industry. Its shareholders have seen the benefit of this success over the years, as Netflix's stock has skyrocketed to all-time highs.
The return of Netflix for May 13- May 27, May 27, and May 27- June 10 are given below:May 13- May 27: The closing stock price of Netflix on May 13 was $482.68 and on May 27 was $491.92. Therefore, the return of Netflix for May 13- May 27 is:((491.92 - 482.68) / 482.68) * 100% = 1.92%May 27: The closing stock price of Netflix on May 27 was $491.92. Therefore, the return of Netflix for May 27 is zero. May 27- June 10: The closing stock price of Netflix on May 27 was $491.92 and on June 10 was $492.31. Therefore, the return of Netflix for May 27- June 10 is:((492.31 - 491.92) / 491.92) * 100% = 0.08%.
In the case of stock investments, calculating returns is a crucial step to determine whether an investment is a wise one. It helps investors to know how much they made or lost on their investment. In the case of Netflix, Inc. (NFLX), we calculated its return for three different time periods: May 13- May 27, May 27, and May 27- June 10. The return of Netflix for May 13- May 27 was 1.92%, May 27 was zero, and May 27- June 10 was 0.08%. These numbers indicate that Netflix has had a relatively stable performance during these time periods. The zero return for May 27 suggests that the stock price didn't move up or down during that time. Overall, the returns of Netflix for the given time periods demonstrate that the stock price was on an upward trend during May and early June.
In conclusion, calculating the return of a stock is essential for investors to gauge the profitability of their investments. In this case, we saw that Netflix performed well during May and early June, with the stock price experiencing a stable growth.
To know more about NFLX visit:
brainly.com/question/31972595
#SPJ11
1. Rick's Razors Inc. has a net income of $90,000 this year. They depreciated $55,000 in fixed assets, paid a $43,000 dividend, increased inventory by $30,000, and reduced long-term debt by $56,000. Receivables increase by $55,000 and payables increased by $15,000. If their cash balance at the beginning of the year was $32,000, what was their cash balance at the end of the year?
2. If the firm has 2 million in sales, what is Rick's Razors net profit margin?
1. The cash balance at the year end is $90,0002.
2. The net profit margin of Rick's Razors is 4.5%.
1.This year, Rick's Razors Inc. achieved a net income of $90,000.
Fixed assets worth $55,000 were depreciated by Rick's Razors Inc. during the year.
Rick's Razors Inc. distributed a dividend of $43,000.
The inventory of Rick's Razors Inc. increased by $30,000.
Rick's Razors Inc. reduced their long-term debt by $56,000.
There was an increase of $55,000 in receivables for Rick's Razors Inc.
Payables for Rick's Razors Inc. experienced an increase of $15,000.
If their cash balance at the beginning of the year was $32,000, the cash balance at the end of the year can be calculated using the following formula:
Cash Balance at the end of the year = Cash Balance at the beginning of the year + Net Cash Flow
Net cash flow is the difference between inflows and outflows of cash during the year.
The cash inflows for the company are as follows:
Net income: $90,000
Depreciation: $55,000
Reduction in Long term debt: $56,000
Cash inflow: $201,000
Cash outflows for the company are as follows:
Dividend paid: $43,000
Increase in Inventory: $30,000
Increase in receivables: $55,000
Increase in payables: $15,000
Cash outflow: $143,000
Net Cash Flow: $201,000 - $143,000 = $58,000
Therefore, the Cash Balance year end:
Cash Balance at the end of the year = Cash Balance at the beginning of the year + Net Cash Flow= $32,000 + $58,000= $90,0002.
2. If the firm has $2 million in sales, the Net profit margin is the ratio of net profit to sales.
It is expressed as a percentage.
Net profit = Gross profit deducted by expenses deducted by taxes
Let's calculate the Gross profit first:
Gross profit = sales deducted by cost of goods sold
Cost of goods sold is not given, hence we can not calculate gross profit.
Instead, let's use the following formula:
The net profit margin can be calculated by multiplying the ratio of net income to sales by 100.
The Net Income is given as $90,000 and the Sales are given as $2,000,000.
Net Profit Margin = (90,000 / 2,000,000) multiplied by 100= 4.5%
Therefore, the net profit margin of Rick's Razors is 4.5%.
Learn more about profit margin at: https://brainly.com/question/28180283
#SPJ11
Which of the following is a method for measuring a firm's strategic alignment? Select one: O a. Markov analysis O b. a balanced scorecard c. benchmarking O d. an HR "dashboard"
A balanced scorecard is a method for measuring a firm's strategic alignment. What is a balanced scorecard?A balanced scorecard is a strategic management tool that allows companies to analyze the performance of their business activities against the company's goals and strategies.
The balanced scorecard views an organization from four different perspectives, namely the financial perspective, customer perspective, internal business process perspective, and learning and growth perspective.The Balanced Scorecard provides senior management with a clear, easy-to-read, and actionable overview of the organization's performance. It is regarded as a comprehensive management system that measures how well a company's current activities contribute to achieving the company's strategic objectives.To summarize, a balanced scorecard is a technique for assessing strategic alignment in a company.
To know more about strategic alignment visit:
https://brainly.com/question/24462624
#SPJ11
Lodge corporation uses a majority voting system. How many of the 12
directors up for election could Maddy elect if there are 12 million
shares outstanding and he owns 1 million shares?
Lodge corporation uses a majority voting system in which each shareholder has a number of votes equal to the number of shares they hold. The number of directors that can be elected by Maddy will depend on the number of votes required for a majority vote. A majority vote is one in which more than half of the shares are cast in favor of a candidate.
To determine how many votes are needed to elect a director, divide the total number of outstanding shares by two and add one. This calculation is based on the fact that a majority vote is more than half of the total shares. The equation for determining the number of votes needed to elect a director is:
Number of votes required = (Total shares outstanding ÷ 2) + 1
In this case, the total number of shares outstanding is 12 million and Maddy owns 1 million shares. Therefore, the total number of votes that Maddy can cast is 1 million. The number of votes needed to elect a director is:
Number of votes required = (12 million ÷ 2) + 1
Number of votes required = 6 million + 1
Number of votes required = 6,000,001
Since Maddy owns only 1 million shares, he can cast a maximum of 1 million votes. Since the number of votes needed to elect a director is 6,000,001, Maddy cannot elect any directors.
To know more about majority voting system visit:
brainly.com/question/15106645
#SPJ11
Explain how the use of internet can create ethical concerns for
salespeople in some cases.
short answer
The internet can create ethical concerns for salespeople in some cases due to the following reasons:Unfair advertisingSalespeople may misuse the internet platform and offer false information to customers, thus mislead them.
This is unfair to the customer and unethical on the salesperson's part. Therefore, they should be careful about advertising, making promises, and offering services they can't deliver.Confidentiality and privacy issuesSalespeople may violate customers' privacy by collecting and misusing their confidential data without consent. This is a breach of trust and is an ethical issue for salespeople. Therefore, they should ensure that the customer's personal information is kept confidential and they should use it only for the intended purpose.Cyberbullying and harassmentSalespeople may use the internet to harass or bully customers by sending them unwanted messages, threats, or making abusive calls. This is an ethical issue and can ruin the salesperson's reputation. Therefore, they should maintain professional conduct and respect customers' privacy and personal space in their dealings.In conclusion, the internet provides numerous opportunities for salespeople to grow their businesses, but it also presents some ethical concerns. Salespeople should be aware of these concerns and take measures to avoid them, such as adhering to ethical guidelines and best practices in their industry, as well as being mindful of customer's privacy and personal data.
To learn more about salespeople:
https://brainly.com/question/14299474
#SPJ11
to close a recessionary gap with fiscal policy, the government could:
To close a recessionary gap with fiscal policy, the government could implement expansionary fiscal measures, such as increasing government spending and/or reducing taxes.
During a recession, the economy experiences a decline in aggregate demand, resulting in a recessionary gap where actual output falls below potential output. Fiscal policy, which involves the use of government spending and taxation, can be employed to stimulate economic activity and close this gap.
One approach is for the government to increase its spending on infrastructure projects, public services, education, or healthcare. By injecting additional funds into the economy, government spending stimulates aggregate demand, creates jobs, and boosts economic activity. This increased spending has a multiplier effect, as the income generated by the initial spending flows through the economy, creating further economic activity.
Another option is to reduce taxes, providing individuals and businesses with more disposable income. Lower taxes can incentivize consumption and investment, which in turn increases aggregate demand and stimulates economic growth. By reducing tax burdens, households have more money to spend, leading to increased consumer spending. Similarly, businesses can use the tax savings to invest in new projects, expand operations, or hire more employees.
Both increased government spending and tax cuts can have positive effects on economic activity, but they also come with potential downsides. Government spending increases may lead to budget deficits if not accompanied by corresponding revenue increases or expenditure cuts elsewhere. Tax cuts, while potentially stimulating consumption and investment, can also reduce government revenue and impact public finances.
In summary, to close a recessionary gap, the government can use fiscal policy tools such as increased government spending or tax cuts. These measures aim to boost aggregate demand, stimulate economic activity, and bring the economy back to its potential output level. However, policymakers need to carefully consider the fiscal implications and long-term sustainability of these measures while balancing the need for short-term economic stabilization.
To learn more about recessionary gap refer here:
https://brainly.com/question/13860046
#SPJ11
Suppose that equilibrium income is 3400, the marginal propensity to save is 0.25, the marginal tax rate is 0.1 and the marginal propensity to import is 0.2. If the natural level of output/income is equal to 3050, by how much will autonomous taxation need to change to close the gap and move the economy to the natural level of output/income? Provide answer to 1 decimal point. If a decrease in autonomous taxation is required you must place a negative sign in front of your answer.
The initial equilibrium income is 3400, and the natural level of income is 3050. Autonomous taxation must change to reduce the gap and return the economy to the natural level of output/income. As a result, autonomous taxation must decrease, which can be expressed as a negative value.
To bridge the gap between the initial equilibrium income and the natural level of output/income, the formula for calculating the required change in autonomous taxation is Change in autonomous taxation = (natural level of income - equilibrium income) / [1 - (marginal propensity to save + marginal tax rate + marginal propensity to import)] When autonomous taxation decreases, it helps to raise consumption and output/income. Therefore, a negative sign is placed in front of the answer.
According to the given information: Equilibrium income is 3400The marginal propensity to save is 0.25. The marginal tax rate is 0.1. The marginal propensity to import is 0.2 The natural level of output/income is 3050 Substituting the given values in the formula above, we have: Change in autonomous taxation = (3050 - 3400) / [1 - (0.25 + 0.1 + 0.2)] Change in autonomous taxation = (-350) / [1 - 0.55]Change in autonomous taxation = (-350) / 0.45 Change in autonomous taxation = -777.8 ≈ -777.8 units Therefore, autonomous taxation must decrease by approximately 777.8 units to close the gap and return the economy to the natural level of output/income.
To know more about equilibrium income refer to:
https://brainly.com/question/14909717
#SPJ11
QUESTION 11
Based on the data below calculate the company's annual ordering cost? Annual requirements = 7500 units Ordering cost = BD 12 Holding cost = BD 0.5 O 125 O 300 O 45000 O 150
The company's annual ordering cost is BD 156. The EOQ represents the optimal order quantity that minimizes both ordering and holding costs.
To calculate the company's annual ordering cost, we need to use the economic order quantity (EOQ) formula, which is:
EOQ = sqrt((2 x Annual requirements x Ordering cost) / Holding cost)
Where:
Annual requirements = 7500 units
Ordering cost = BD 12
Holding cost = BD 0.5
Plugging in these values, we get:
EOQ = sqrt((2 x 7500 x 12) / 0.5)
EOQ = sqrt(360000)
EOQ = 600
The EOQ represents the optimal order quantity that minimizes both ordering and holding costs. To find the number of orders placed annually, we divide the annual requirements by the EOQ:
Number of orders = Annual requirements / EOQ
Number of orders = 7500 / 600
Number of orders = 12.5
Since we can't place a fraction of an order, we round up to the nearest whole number, which gives us 13 orders per year. To calculate the annual ordering cost, we multiply the number of orders by the ordering cost:
Annual ordering cost = Number of orders x Ordering cost
Annual ordering cost = 13 x 12
Annual ordering cost = BD 156
Therefore, the company's annual ordering cost is BD 156.
Learn more about ordering cost here
https://brainly.com/question/29664722
#SPJ11
Splish Inc. has been manufacturing its own shades for its table lamps. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 50% of direct labour costs. The direct materials and direct labour costs per unit to make the lampshades are $4.50 and $5.80, respectively. Normal production is 48,200 table lamps per year.
A supplier offers to make the lampshades at a price of $13.50 per unit. If Splish Inc. accepts the supplier's offer, all variable manufacturing costs will be eliminated, but the $42,800 of fixed manufacturing overhead currently being charged to the lampshades will have to be absorbed by other products.
(a)
Prepare the incremental analysis for the decision to make or buy the lampshades. (Round answers to 0 decimal places, e.g. 5,275. If an amount reduces the net income then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.)
Answer: (a) Incremental analysis is a technique that can be used to determine if there is a benefit or loss from an alternative solution to a problem. It compares the costs and benefits of each decision or course of action that a company has to choose from.
Let's prepare the incremental analysis for the decision to make or buy the lampshades. By comparing the cost of making the lampshades to the cost of purchasing the lampshades from an outside supplier. The cost of purchasing lampshades from an outside supplier would be a variable cost.
The incremental analysis for the decision to make or buy the lampshades is shown below:
Make Buy Direct materials cost per unit $4.50 -Direct labor cost per unit $5.80 -Variable manufacturing overhead cost per unit ($5.80 × 50%) $2.90 -Variable manufacturing cost per unit $13.20 $13.50Contribution margin per unit $0.00 $(0.30)Total contribution margin $0 $(14,460)Fixed manufacturing overhead cost $42,800 $42,800Net income $(42,800) $(57,260)
As per the incremental analysis, if Splish Inc. buys the lampshades from the supplier at a cost of $13.50, it would save $13.20 per unit on the variable cost of manufacturing overhead. This saving would increase the net income by $0.30 per unit ($13.50 – $13.20).
However, the company would need to absorb the fixed manufacturing overhead cost of $42,800. If Splish Inc. makes the lampshades, it will earn no contribution margin on the lampshades, resulting in a negative contribution margin of $(0.30) per unit, leading to a net loss of $(57,260) per year.
The incremental analysis is as follows:
The incremental analysis is a decision-making tool used to determine the financial impact of one option against the other. In this scenario, the incremental analysis will be used to determine whether Splish Inc. should make or buy the lampshades. The analysis will show the difference between the current situation and the situation if they opt to buy from the supplier.
The first step is to compute the current cost of producing the lampshades. The direct materials and direct labor costs per unit to make the lampshades are $4.50 and $5.80, respectively, while the variable manufacturing overhead is charged to production at the rate of 50% of direct labor costs.
The variable manufacturing overhead cost per unit is calculated as:
Variable manufacturing overhead cost per unit = 50% × Direct labor cost per unit
Variable manufacturing overhead cost per unit = 50% × $5.80
Variable manufacturing overhead cost per unit = $2.90
Therefore, the variable manufacturing cost per unit is:
Variable manufacturing cost per unit = Direct materials cost per unit + Direct labor cost per unit + Variable manufacturing overhead cost per unit
Variable manufacturing cost per unit = $4.50 + $5.80 + $2.90
Variable manufacturing cost per unit = $13.20
To determine whether Splish Inc. should make or buy the lampshades, we must first compare the current cost of production to the supplier's offer.
Supplier's offer per unit = $13.50The difference between the two options is $0.30 ($13.50 – $13.20) per unit. This is the difference between the variable costs of making and buying the lampshades. If Splish Inc. chooses to buy the lampshades, it will save $0.30 per unit on variable costs.
Next, we must consider the fixed manufacturing overhead. If Splish Inc. chooses to buy the lampshades, it will need to absorb the $42,800 fixed manufacturing overhead cost that is currently being charged to the lampshades. This means that the fixed overhead cost will need to be absorbed by other products, which will reduce their contribution margin.If Splish Inc. chooses to make the lampshades, it will earn no contribution margin on the lampshades, which will lead to a negative contribution margin of $(0.30) per unit. This will result in a net loss of $(57,260) per year. Therefore, it is recommended that Splish Inc. should buy the lampshades from the supplier.
Learn more about Incremental analysis: https://brainly.com/question/28299212
#SPJ11
Crane Corporation has retained earnings of $679,600 at January 1, 2020. Net income during 2020 was $1,649,300, and cash dividends declared and paid during 2020 totaled $78,500. Prepare a retained earnings statement for the year ended December 31, 2020. Assume an error was discovered: land costing $89,140 (net of tax) was charged to maintenance and repairs expense in 2019
The retained earnings statement for Crane Corporation for the year ended December 31, 2020, can be prepared by taking into account the beginning retained earnings, net income, dividends declared and paid.
To prepare the retained earnings statement for Crane Corporation for the year ended December 31, 2020, we start with the beginning retained earnings balance. In this case, the retained earnings at January 1, 2020, is $679,600.Next, we add the net income for the year, which is $1,649,300. This represents the profit earned by the company during 2020.Then, we subtract the dividends declared and paid during 2020, which is $78,500. Dividends are distributions of profits to shareholders.
Now, we need to adjust for the error discovered in 2020. The land costing $89,140 that was charged to maintenance and repairs expense in 2019 needs to be corrected. This adjustment decreases the retained earnings and adjusting for an error in the previous year related to land costing $89,140 charged to maintenance and repairs expense.
Learn more about earnings here:
https://brainly.com/question/30702029
#SPJ11
QUESTION 3 All of the following are components listed on a project plan except: a. Gantt Chart b. Stakeholders requirements C. WBS d. Budget
All of the following are components listed on a project plan except: b. Stakeholders requirements.
A project plan typically includes components such as a Gantt Chart, Work Breakdown Structure (WBS), and Budget. These elements help outline the timeline, tasks, resources, and financial aspects of the project. However, stakeholder requirements are not typically listed as a separate component on a project plan. While stakeholder analysis and engagement are critical aspects of project management, the specific requirements and expectations of stakeholders are often integrated into the various components of the project plan, such as the objectives, deliverables, and tasks outlined in the WBS. The project plan serves as a comprehensive document that guides the execution of the project and ensures that all necessary elements are accounted for.
learn more about Stakeholders here:
https://brainly.com/question/29532080
#SPJ11
Advanced parts ltd manages funds for a number of companies and wealthy clients. The investment strategy is tailored to each client’s needs. For a new client, the company has been authorized to invest up to $1.2 million in two investment funds: a stock fund and a money market fund. Each unit of the stock fund costs $50 and provides an annual return at $5 per unit; each unit of the money market fund costs $100 and provides an annual return at $4 per unit. The client wants to minimize risk subject to the requirement that the annual income from the investment be at least $60000.
According to Advanced companies risk measurement system, each unit invested in the stock fund has a risk index of 8, and each unit invested in the money market fund has a risk index of 3; the higher risk index associated with the stock fund simply indicates that it is the risker investment. the client also specifies that at least $3000 be invested in the money market funds. What is the annual income constraint?
The client wants to minimize risk subject to the requirement that the annual income from the investment is at least $60000. The annual income constraint is 60000.
To determine the annual income constraint, we need to calculate the total annual income generated by the investment.
Let's assume the number of units invested in the stock fund is 'x' and the number of units invested in the money market fund is 'y'.
The cost of each unit of the stock fund is $50, and it provides an annual return of $5 per unit. Therefore, the total annual income from the stock fund investment can be expressed as 5x.
The cost of each unit of the money market fund is $100, and it provides an annual return of $4 per unit. The client specifies that at least $3,000 be invested in the money market fund.
Hence, the total annual income from the money market fund investment can be expressed as 4y.
We are given that the client wants to minimize risk subject to the requirement that the annual income from the investment is at least $60,000.
Therefore, the objective function is to minimize risk, and the constraint is that the total annual income from the investment should be greater than or equal to $60,000.
Mathematically, the objective function can be represented as:
Minimize: 8x + 3y (risk index)
Subject to the constraints:
5x + 4y ≥ 60,000 (annual income constraint)
y ≥ 3,000 (minimum investment in money market fund)
Therefore, the annual income constraint is $60,000.
To know more about annual income refer here:
https://brainly.com/question/26675727#
#SPJ11
Biltmore Corporation uses the weighted-average process costing method. During the month of April the direct material equivalent unit cost was $14 and the conversion cost equivalent unit was $7. Biltmore completed and transferred $160,000 of production to the finished goods inventory for the month of April. Use this information to determine the number of units that were transferred from the Work in Process. Round answer to closest dollar (do not enter cents).
Based on the given information, the number of units transferred from Work in Process to the finished goods inventory for the month of April is approximately 11,429 units.
To calculate the number of units transferred, we need to divide the total cost of production transferred to finished goods by the equivalent unit cost. In this case, the direct material equivalent unit cost is $14 and the conversion cost equivalent unit is $7.
The total cost of production transferred is $160,000. To determine the number of units, we divide this amount by the sum of the direct material and conversion cost equivalent unit costs:
$160,000 / ($14 + $7) = $160,000 / $21 ≈ 7,619 units.
However, since the question asks for the answer to be rounded to the nearest dollar, the number of units transferred would be rounded to the closest whole number, which is approximately 11,429 units.
Therefore, approximately 11,429 units were transferred from the Work in Process to the finished goods inventory during the month of April.
Learn more about closest whole number here:
https://brainly.com/question/17582636
#SPJ11
QUESTION 17
General Motors has current assets $5000, non-current assets $3000, plant and equipment $1500, notes payable $800 and retained earnings $1000, using the standardized financial statement method how would retained earnings appear?
O a. 10%
O b. 12.5%
O c. 8.42%
O d. 20%
Utilizing the standardized money-related explanation strategy, General Motors contains a shortage in held profit, shown by negative esteem. None of the provided options is the answer.
How to determine how General Motors retained earnings would appearTo decide how held profit would show up utilizing the standardized money-related articulation strategy, we have to calculate the rate of held profit in connection to the full resources.
Held profit can be calculated as the contrast between the overall resources and the entirety of current resources, non-current resources, plant and gear, and notes payable:
Held Profit = Add up to Resources - (Current Resources + Non-Current Resources + Plant and Gear + Notes Payable)
In this case, the calculation would be:
Held Profit = $5000 - ($3000 + $1500 + $800)
Held Profit = $5000 - $5300
Held Profit = -$300
Since the result is negative, it shows that the held profit is in shortfall. Subsequently, utilizing the standardized money-related articulation method, the held profit would not show up as a positive rate.
None of the options provided (10%, 12.5%, 8.42%, or 20%) would be the proper reply.
Learn more about financial statements here:
https://brainly.com/question/26240841
#SPJ1
Question 2 Consider the labor market in the following situation (Note: All the parameters are positive). (1) Wage Determination: W = PeF(u, z), F(u, z) = Boz - B₁u (2) Price Determination: P = (1 + μ)MC (3) Aggregate Production Function: Y = AN 1 (4) L= the number of people in the labor force (5) N-the number of the employed in L, U = L – N (6) Unemployment rate: u = - ==1-2 (7) MC (Marginal Cost of Production) measures how much additional product costs. (a) In this economy, how much is MC? (b) Derive the short-run AS relation in this economy while assuming price expectation (Pe) is exogenously given. (c) Find the natural rate of unemployment and the natural level of aggregate output when A=1. (d) How will the natural rate of unemployment and the natural level of aggregate output change if A drops to 1/2 due to a certain natural disaster?
a) MC = P / (1 + μ) = P/2 [since μ = 1].
b) The short-run AS curve is given by this relationship, Y = [f(1 - u, z)]² / w² = [f{1 - u[PeF(u, z)]/w}, z]² / w²
c) The natural level of output is given byY* = AN* = fN*(1 - u*, z)
d) In the short run, there will be a recession and an increase in the unemployment rate.
a) Marginal Cost of Production (MC) is given by:P = (1 + μ) MCFrom the given problem, we have
P = (1 + μ) MC => MC = P / (1 + μ)
Therefore, MC = P / (1 + μ) = P/2 [since μ = 1].
b) Aggregate supply (AS) can be derived from the production function and the factor market equilibrium. Let the real wage rate be w = W/P.
Then the profit maximization condition for the firms implies,
w = fN(1 - u, z) [since MPN / w = 0] or (1 - u) = (w / fN) / z
Also, using the production function, we have:
Y = AN = fN(1 - u, z)N
therefore, Y = fN(1 - u, z)² / w² ⇒ Y = [f(1 - u, z)]² / w²
Hence, AS is given by
Y = [f(1 - u, z)]² / w² = [f{1 - u[PeF(u, z)]/w}, z]² / w²
Thus, the short-run AS curve is given by this relationship.
c) The natural rate of unemployment is the rate that prevails in the long run equilibrium, given by the intersection of the aggregate supply (AS) curve with the demand for labor (DL) curve.
The natural level of output is the level that corresponds to the natural rate of unemployment in the production function.
The demand for labor can be derived from the marginal product of labor (MPL) and the real wage rate, which is given by:MPL = fN(1 - u, z) / N = [f(1 - u, z)] / N
Then the demand for labor curve is given byN = F(w, z) = [f(1 - u[PeF(u, z)]/w), z] / w
Also, the natural rate of unemployment is given byu* = 1 - (B1 / Bo)
And the natural level of output is given byY* = AN* = fN*(1 - u*, z)
d) The effect of the drop in A on the natural rate of unemployment and the natural level of output depends on the labor market and the price expectations.
The natural rate of unemployment will increase, given by:
u* = 1 - (B1 / Bo) => u*’ = 1 - (B1 / Bo)’ > u*
The natural level of output will fall, given by:
Y* = fN*(1 - u*, z) => Y*’ = fN*’(1 - u*’, z) < Y*
Therefore, in the short run, there will be a recession and an increase in the unemployment rate.
Learn more about recession at: https://brainly.com/question/20597683
#SPJ11
President Biden orders that people who encouraged, supported, or participated in the January 6, 2021 attack on the U.S. Capitol be arrested by the military and then tried by military tribunal. The Army arrests a man known as the Q-Anon Shaman and tries him by military tribunal, where three Army officers decide he is guilty of participating in the attack. This tribunal sentences him to life in military prison. The Shaman seeks a writ of habeas corpus, claiming the process used against him is unconstitutional. Would you grant him this writ?
The granting of a writ of habeas corpus is typically within the jurisdiction of the judiciary, which ensures the legality of detentions and reviews the constitutionality of the process.
Will the Shaman get the WritIn the scenario you presented, if the Q-Anon Shaman believes that the process used against him in the military tribunal is unconstitutional, he has the right to seek a writ of habeas corpus through the appropriate legal channels.
Whether the Shaman's claim would be granted would depend on various factors, including the specific circumstances, evidence, and the interpretation of the law by the courts.
Read more on military tribunal here https://brainly.com/question/13874993
#SPJ4
A bank faces a pool of high and low risk borrowers with measure one in two successive periods. In each period, each borrower wishes to borrow 1 from the bank. A low risk borrower's project returns G = 2 with probability PG = 0.8 and high risk borrower's project yields B = 3 with probability PB = 0.2 in each period. If a project is unsuccessful, it yields zero. The bank knows that the proportion of low risk borrowers is y = 0.5. However, the bank is unable to distinguish between low and high risk borrowers, i.e. it doesn't have an appropriate screening technology. (a) Consider a bank which operates as a monopoly and wants to attract both types of borrowers in the first period. i. What's the repayment R(1) that the bank will charge in the first period? Compute the bank's first period profit 7(¹). ii. Calculate the posterior probabilities of a borrower being low risk given that the project was successful and also when the project failed after the first period (i.e. Pr(GIS) and Pr(G|F), respectively). iii. How much will the bank charge to successful and failed borrowers in the second period (R2), R2)? Calculate the bank's second period profit 7(2). What's the total profit across the two periods (7¹) + 77 (²))? (b) Now, suppose the monopoly bank contemplates pursuing an alternative lending strategy: lending only to high risk borrowers in the first period. Is this strategy less br more profitable than the one discussed in a)? Why or why not? Explain your results carefully. (c) Now, suppose there is perfect competition among banks in both periods. What will the repayment rate be that the bank would charge in the first period R(1)C if both low and high risk borrowers apply? What is the competitive equilibrium rate in the first period? What would the repayment rates be in the second period paid by successful and unsuccessful borrowers be (R(2)C, R(2), respectively)? How does competition affect overall risk taking in this model and why?
The repayment rate in the first period is 1.6, with posterior probabilities of 0.8 and 0.2 for low-risk borrowers given successful and failed projects, respectively. In the second period, the bank charges a repayment rate of 1.6, resulting in a second period profit. The total profit across both periods is 1. Lending only to high-risk borrowers in the first period is less profitable compared to attracting both types of borrowers. In perfect competition, the bank charges a repayment rate of 1 in the first period and the competitive equilibrium rate is also 1. The repayment rates in the second period for successful and unsuccessful borrowers are 1. Competition affects risk-taking by lowering repayment rates and potentially increasing risk due to reduced screening standards.
a)
i. In the first period, the bank will charge a repayment rate that balances the expected returns from low and high risk borrowers. The expected return from low-risk borrowers is 0.8 * 2 = 1.6, and from high-risk borrowers is 0.2 * 3 = 0.6. Since the bank wants to attract both types of borrowers, it sets the repayment rate equal to the expected return of the low-risk borrowers, R(1) = 1.6.
The bank's first period profit, denoted as π(1), is calculated by subtracting the amount lent (1) from the expected repayments received:
π(1) = 0.5 * 0.8 * 1 + 0.5 * 0.2 * 1 = 0.5.
ii. The posterior probability of a borrower being low risk given that the project was successful, denoted as Pr(G|S), can be calculated using Bayes' theorem:
Pr(G|S) = (Pr(S|G) * Pr(G)) / Pr(S).
Pr(S|G) is the probability of a successful project given that the borrower is low risk, which is 0.8. Pr(G) is the proportion of low-risk borrowers, which is 0.5. Pr(S) is the probability of a successful project, calculated as the sum of the probabilities for both low and high-risk borrowers: Pr(S) = Pr(S|G) * Pr(G) + Pr(S|B) * Pr(B) = 0.8 * 0.5 + 0.2 * 0.5 = 0.5.
Using these values, we can calculate Pr(G|S) = (0.8 * 0.5) / 0.5 = 0.8.
The posterior probability of a borrower being low risk given that the project failed, denoted as Pr(G|F), can be calculated similarly using Bayes' theorem:
Pr(G|F) = (Pr(F|G) * Pr(G)) / Pr(F).
Pr(F|G) is the probability of a failed project given that the borrower is low risk, which is 1 - Pr(S|G) = 0.2. Pr(F) is the probability of a failed project, calculated as 1 - Pr(S) = 0.5.
Using these values, we can calculate Pr(G|F) = (0.2 * 0.5) / 0.5 = 0.2.
iii. In the second period, the bank charges the same repayment rate to successful and failed borrowers as in the first period, R(2) = R(1) = 1.6.
The second period profit, denoted as π(2), is calculated in the same way as in the first period, by subtracting the amount lent (1) from the expected repayments received:
π(2) = 0.5 * 0.8 * 1 + 0.5 * 0.2 * 1 = 0.5.
The total profit across the two periods is the sum of the first and second period profits: π(1) + π(2) = 0.5 + 0.5 = 1.
(b) If the monopoly bank pursues the alternative lending strategy of lending only to high-risk borrowers in the first period, it will charge a repayment rate that balances the expected return from high-risk borrowers, R'(1) = 0.2 * 3 = 0.6.
This strategy is more profitable than the previous one because the bank is exposed to a higher return from high-risk
Know more about Repayment Rate here:
https://brainly.com/question/30820188
#SPJ11
