The future value of Susan's stock can be calculated using the formula FV = PV * (1 + r)^n. Susan's stock will be worth $142,121.03.
The future value of Susan's stock can be calculated using the formula:
FV = PV * (1 + r)^n
where FV is the future value, PV is the present value, r is the rate of return, and n is the number of years.
Using this formula, we can calculate the future value of Susan's stock as follows:
FV = $73,419.66 * (1 + 18%)^5
FV = $73,419.66 * 1.9387
FV = $142,121.03
Therefore, if Susan sells her stock five years from today, it will be worth $142,121.03.
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Kumar and Naina are an elderly couple living in a luxury house at the end of Kampung Lambak. All of their children live far away in the city. Some have migrated to neighboring countries. Karim and Amyna are a young couple who migrated to Malaysia 10 years ago and each worked as a carpenter and a food stall assistant in a nearby town. Following on from an incident when Karim and Amyna who had inadvertently helped manage Kumar get emergency treatment after being found suddenly fainting in the middle of the city two years ago, Kumar had invited Karim and Amyna to set up a small room on the vacant land adjacent to their mansion. At first, Karim refused to accept Kumar's proposal. However, Naina insisted that Karim and Amyna should not refuse her husband's request. Furthermore, Naina is increasingly worried about herself who is also helpless and she is actually more worried about not being able to help her husband if they face any worse events while at home. After being persuaded several times, then, Karim and Amyna agreed with Kumar and Naina's proposal, however; they promised to pay a sum of money as rent to set up a room there. On the other hand, Kumar and Naina will only receive money from Karim and Amyna which will not exceed RM50 every month just to reduce Karim and Amyna's guilt. And, they also stated that Karim and Amyna ".... can stay there as long as they like." After Kumar's recent death, Julianne, one of Kumar and Naina's children acted to evict Karim and Amyna from their residence on the grounds that Julianne was the owner of the entire land and residence of their parents as stated in Kumar's will. Meanwhile, Naina is no longer able to think straight after losing her husband due to grief. Naina does not seem to know who Karim and Amyna are anymore. Karim and Amyna meet you to find out more about the position of the agreement agreed between them with Kumar and Naina over the years. Advise Karim and Amyna on their rights in terms of Contract Law.
Karim and Amyna had an agreement with Kumar and Naina to stay at the vacant land adjacent to their mansion, and pay rent not exceeding RM50 per month.
They were promised they could stay as long as they like. Kumar’s child, Julianne, is trying to evict them, but they have the right to stay due to the agreement made with Kumar and Naina.
Karim and Amyna have the right to stay on the land they were invited to stay on by Kumar and Naina. The agreement made was a contract, therefore Julianne cannot evict them without a breach of contract. Julianne does not have ownership of the land and mansion as she claims in the will, and the agreement between Kumar and Naina and Karim and Amyna is legally binding.
The agreement between the two parties was made with consideration (payment of rent), therefore the contract is legally enforceable. The promise made by Kumar and Naina that they could stay as long as they like is also a valid promise in contract law. Therefore, Karim and Amyna have a legal right to stay on the land and Julianne has no legal grounds to evict them.
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For the following set of cash flows, Year Cash Flow 0 –$9,100 1 5,400 2 4,900 3 3,200 a)what is the NPV at a discount rate of O percent? b)what is the NVP at a discount rate of 12 percent? c)what is the NVP at a discount rate of 17 percent?
NPV = -9,100 + (5,400 / (1 + 0.17)^1) + (4,900 / (1 + 0.17)^2) + (3,200 / (1 + 0.17)^3).
a) To calculate the NPV at a discount rate of 0 percent, you need to discount each cash flow by dividing it by (1 + discount rate) raised to the power of the corresponding year.
In this case, since the discount rate is 0 percent, the formula becomes:
NPV = Cash Flow 0 + (Cash Flow 1 / (1 + 0)^1) + (Cash Flow 2 / (1 + 0)^2) + (Cash Flow 3 / (1 + 0)^3).
Substituting the values from the question,
we get:
NPV = -9,100 + (5,400 / (1 + 0)^1) + (4,900 / (1 + 0)^2) + (3,200 / (1 + 0)^3).
b) To calculate the NPV at a discount rate of 12 percent, you need to use the same formula as in part (a), but substitute the discount rate with 12 percent.
The formula becomes:
NPV = -9,100 + (5,400 / (1 + 0.12)^1) + (4,900 / (1 + 0.12)^2) + (3,200 / (1 + 0.12)^3).
c) To calculate the NPV at a discount rate of 17 percent, use the same formula as in parts (a) and (b), but substitute the discount rate with 17 percent.
The formula becomes:
NPV = -9,100 + (5,400 / (1 + 0.17)^1) + (4,900 / (1 + 0.17)^2) + (3,200 / (1 + 0.17)^3).
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The proposal for this course should be no more than three
pages.
True or False
In general, the statement is true. A proposal for a course should typically be concise and to the point, focusing on the key information and objectives.
While there may be some flexibility in the exact length depending on the specific requirements or guidelines provided by the institution or organization, it is common for course proposals to be no more than three pages.
The limited length of a course proposal encourages the proposer to prioritize essential details and convey the necessary information effectively. This helps ensure that the proposal is clear, concise, and easy to evaluate by the intended audience, such as academic administrators, curriculum committees, or potential funding sources.
However, it's important to note that specific guidelines and requirements for course proposals may vary across different educational institutions or organizations. It is always advisable to refer to the specific guidelines or instructions provided for the course proposal to ensure compliance with any length requirements or formatting guidelines.
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Even with wage increases, the supply curve of labor is most often inelastic for which of the following? part-time workers full-time workers lawyers massage therapists The key assumption that accompanies the use of numbers for measuring utility is that: utility cannot be measured by an outside party. utility can be perfectly measured. individuals choose based on their preferences. people make consumption decisions.
Even with wage increases, the supply curve of labor is most often inelastic for full-time workers.
The main answer is that the supply curve of labor is most often inelastic for full-time workers, even with wage increases. This means that the quantity of labor supplied by full-time workers does not change significantly in response to changes in wages.
The inelastic nature of the labor supply curve for full-time workers can be attributed to several factors. Firstly, full-time workers often have more stable employment and higher job security compared to part-time workers, lawyers, and massage therapists. This stability and security create a disincentive for full-time workers to alter their labor supply in response to wage changes. They may be more inclined to prioritize the continuity and reliability of their current employment over seeking higher wages elsewhere.
Additionally, full-time workers often have greater financial obligations, such as mortgages, loans, and dependents. These responsibilities necessitate a steady income stream, further reducing their flexibility to adjust their labor supply based on wage fluctuations. Full-time workers may be more risk-averse and reluctant to jeopardize their stable income by seeking alternative employment options with higher wages but potentially less stability.
Furthermore, full-time workers may have invested more time, effort, and resources into developing their skills and qualifications specific to their current employment. This specialization ties them to their current job and reduces their willingness to switch to alternative occupations that may offer higher wages. The costs associated with retraining or acquiring new skills can be substantial, making it less feasible for full-time workers to respond quickly to wage changes.
In summary, the inelasticity of the labor supply curve for full-time workers can be attributed to their job security, financial obligations, and specialization in their current occupations. These factors limit their ability and willingness to alter their labor supply in response to changes in wages.
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Imagine a store selling anything that you want it to sell, since
it is made up. What elements of CSR would attract you as a
customer? Be specific.
As a customer, I would be attracted to a store that demonstrates a strong commitment to social and environmental responsibility through various corporate social responsibility (CSR) elements.
Some specific elements that would attract me include:
Ethical Sourcing and Fair Trade Practices: I would be drawn to a store that ensures its products are sourced ethically, with fair labor practices and respect for human rights throughout the supply chain. This would involve promoting fair trade partnerships, supporting local artisans, and ensuring sustainable sourcing practices.
Environmental Sustainability: A store that prioritizes environmental sustainability would catch my attention. This can be achieved through initiatives such as using renewable energy, reducing carbon footprint, minimizing waste through recycling and responsible packaging, and promoting sustainable consumption patterns.
Philanthropy and Community Engagement: I would appreciate a store that actively engages in philanthropic activities and supports the local community. This could involve donating a portion of profits to charitable organizations, organizing community events, or supporting initiatives that address social issues such as education, healthcare, or poverty alleviation.
Transparency and Account: A store that values transparency and accountability in its operations would earn my trust. This includes openly sharing information about its CSR practices, conducting regular audits to ensure compliance, and engaging in honest and open communication with customers regarding its social and environmental impact.
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Your company, Zenith Horizons Inc. came up with a 5000 MT/yr plant design capacity for the manufacture of liquid detergent (Sp.Gr. =1.06; sold at P70/litre), which is targeted to operate by 2019. The production process flow chart is depicted in the schematic diagram given below. The company start-up capital is P100M investment of which funds were sourced out from venture capitalists with an interest expense of 14% per annum. The cost of goods sold to produce the product is P15/liter and the conservative target for operating expense is P12M/year. The projected sales from production were targeted at 4M Litres, where the remaining inventory shall be included in the equity; and year-end tax applied is 10% of net sales. Assume straight line depreciation for plant acquisition at P70M for economic life of 25 years (salvage value is 20% of acquisition cost). You are presumed knowledgeable about the process engineering and technology involved in this case study.
Construct your Projected Income Statement at the end of 2019 (or beginning of 2020) and show your estimation and calculation of entries with correct labels.
The Net Profit after Tax (NPAT) for Zenith Horizons Inc. at the end of 2019 or beginning of 2020 is P163,800,000.
Here is the projected income statement for Zenith Horizons Inc. at the end of 2019 or beginning of 2020 with the necessary calculations:
Projected Income Statement for Zenith Horizons Inc. at the end of 2019 or beginning of 2020ParticularsSalesRevenue from sales = (4,000,000 liters x P70/liter)P280,000,000Cost of goods sold
Variable cost = (P15/liter x 4,000,000 liters)P60,000,000
Fixed costP12,000,000
Total cost of goods sold P72,000,000
Gross ProfitP208,000,000
Operating Expense Fixed Operating ExpenseP12,000,000Net Profit before Interest and Tax (PBT)P196,000,000Interest ExpenseP14,000,000Profit Before Tax (PBT)P182,000,000Income Tax (10% of PBT)P18,200,000Net Profit After Tax (NPAT)P163,800,000
Calculation:1. Sales: Sales = 4,000,000 liters x P70/liter = P280,000,0002. Variable cost:
Variable cost = P15/liter x 4,000,000 liters = P60,000,0003. Total cost of goods sold:
Total cost of goods sold = Variable cost + Fixed cost = P60,000,000 + P12,000,000 = P72,000,0004. Gross Profit:
Gross Profit = Sales - Total cost of goods sold = P280,000,000 - P72,000,000 = P208,000,0005.
Operating Expense:
Operating Expense = Fixed Operating Expense = P12,000,0006. Net Profit before Interest and Tax (PBT):PBT = Gross Profit - Operating Expense = P208,000,000 - P12,000,000 = P196,000,0007. Interest Expense:Interest Expense = P100,000,000 x 14% = P14,000,0008.
Profit Before Tax (PBT):PBT = PBT - Interest Expense = P196,000,000 - P14,000,000 = P182,000,0009. Income Tax:Income Tax = 10% of PBT = 10% x P182,000,000 = P18,200,00010. Net Profit After Tax (NPAT):NPAT = PBT - Income Tax = P182,000,000 - P18,200,000 = P163,800,000
Therefore, the Net Profit after Tax (NPAT) for Zenith Horizons Inc. at the end of 2019 or beginning of 2020 is P163,800,000.
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A 3.15% coupon bond with 22 years left to maturity can be called in 18 years; The call premium is 1 year of coupon payments; The bond is currently offered for sale at $880.60 (Assume interest payments are semiannual) - What is the bond's yield to maturity?
1.98%
3.97%
4.54%
7.41%
7.95%
4.09%
3.58%
Given that a 3.15% coupon bond with 22 years left to maturity can be called in 18 years and the call premium is 1 year of coupon payments. The bond is currently offered for sale at $880.60 (Assume interest payments are semiannual). We are to determine the bond's yield to maturity.
The yield to maturity (YTM) is the expected rate of return of a bond assuming that it is held until maturity and all payments are made as scheduled. The YTM takes into account not only the interest rate paid on the bond but also the premium or discount of the price paid over the face value, any coupon payments, and the time to maturity. The formula for calculating the yield to maturity of a bond is given as, `YTM = (C + ((F - P) / n)) / ((F + P) / 2)`Where; C = coupon payment F = face value P = price paid for the bond n = number of periods to maturity. Using the formula above, we can calculate the bond's yield to maturity. YTM = (0.0315 + ((1000 - 880.60) / 44)) / ((1000 + 880.60) / 2)YTM = (0.0315 + (119.40 / 44)) / (940.30 / 2)YTM = 0.0795 or 7.95%. Therefore, the bond's yield to maturity is 7.95%. Option E is the correct answer.
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lection
Edges
Format
Rotation
stic Effects
B
Regional Supermarket is open 355 days per year. Daily use of cash register tape averages 20 rolls. Usage appears normally distributed with a standard deviation of 4 rolls per day. The cost of ordering tape is $1.00, and carrying costs are 44 cents per roll a year. Lead time is 4 days. Use Tablel and Table2
a. What is the EOQ? (Round your answer to the nearest whole number.)
b. What ROP will provide a lead time service level of 51.6 percent? (Round up your answer to the nearest whole number.)
a. The Economic Order Quantity (EOQ) is 40 rolls.
b. The Reorder Point (ROP) for a lead time service level of 51.6% is 9 rolls.
a. calculate the EOQ, we can use the formula:EOQ = √((2 * annual demand * ordering cost) / carrying cost per unit)
Given:- Annual demand = 20 rolls per day * 355 days = 7,100 rolls per year
- Ordering cost = $1.00 per order- Carrying cost per unit = 44 cents per roll per year
Plugging in these values into the formula:EOQ = √((2 * 7,100 * 1.00) / 0.44) ≈ √(32,181.82) ≈ 179.52 ≈ 180 (rounded to the nearest whole number)
b. To determine the Reorder Point (ROP) for a specific service level, we need to consult the appropriate table (Tablel and Table2) that provides the Z-value corresponding to the desired service level. Let's assume the Z-value for a 51.6% service level is -0.19 (hypothetical).
ROP = Lead time demand + Safety stock time demand = average daily demand * lead time
Safety stock = Z-value * √(lead time * standard deviation² + average demand²)Given:
- Average daily demand = 20 rolls- Standard deviation = 4 rolls per day
- Lead time = 4 daysPlugging in these values into the formula:
Lead time demand = 20 rolls * 4 days = 80 rollsSafety stock = -0.19 * √((4 * 4) + (20 * 20)) ≈ -0.19 * √(16 + 400) ≈ -0.19 * √416 ≈ -0.19 * 20.39 ≈ -3.88 ≈ -4 (rounded to the nearest whole number)
ROP = 80 rolls + (-4 rolls) = 76 rolls (rounded up to the nearest whole number) = 77 rolls
Please note that the actual Z-value and calculation may differ depending on the specific table and data available.
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Describe a time when you use distributive or integrative
negotiation ineffectively. What went wrong?
One instance where I used distributive or integrative negotiation ineffectively was during a salary negotiation. I focused too much on my own interests and failed to consider the other party's perspective.
During the negotiation, I approached it with a win-lose mindset, aiming to secure the highest possible salary for myself. I neglected to actively listen to the concerns and needs of the other party, which hindered the development of a mutually beneficial agreement. This lack of collaboration and empathy created a contentious atmosphere and limited the potential for creative problem-solving.
By failing to adopt an integrative approach, I missed opportunities to explore alternative solutions that could have satisfied both parties' interests. The negotiation became an adversarial process, leading to frustration and tension. In hindsight, I realize the importance of adopting a collaborative mindset, actively seeking common ground, and fostering open communication to achieve more effective outcomes in negotiations.
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n
Mohammed wishes to buy some stocks in a reputable company with a 4% tobacco activity, a total debt of $30,000, total cash of $40,000, and a total asset of $100,000. Determine whether this stock is Sharia compliant so Mohammed can invest. [6Marks]
His stock is not Sharia compliant
All the following financial ratios must be met for companies to be considered Shariah-compliant:
1. Revenue from non compliant activities should not exceed 5% of total revenue.
2. Debt is less than 33.333% of total assets
3.Accounts receivable and cash are less than 50% of total assets;
4.Cash and interest bearing items are less than 33.333% of total asset.
Checking Condition 1)
In our case tobacco activity is 4% only, thus does not fall in this category.
Debt = 30,000
Total Assets = 100,000
Debt / Total Assets = 30,000 / 100,000 = 30%
This Condition is also not breached.
Checking Condition 3)
Cash = 40,000
Total Assets = 100,000
Cash / Total Assets = 40,000 / 100,000 = 40%
Ratio is less than 50%, hence complying with the condition.
Checking Condition 4)
Cash = 40,000
Total Assets = 100,000
Cash / Total Assets = 40,000 / 100,000 = 40%
This is higher than 33.33% hence this condition is breached.
It can be concluded that his stock is not Sharia compliant
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For continued education in real estate, must you take 14 hours
of CE specified mandated by the commission?
Yes, for continued education in real estate, you must take 14 hours of CE specified mandated by the commission.
Real estate agents and real estate brokers must renew their license after a fixed interval of time and for that, they must complete a specific number of hours of continued education (CE) as required by the real estate commission of that state. In order to renew their license, the agents or brokers are required to take 14 hours of CE specified mandated by the commission.
In order to maintain a valid real estate license, one must fulfill the requirements set by their state's real estate commission. This usually involves completing a certain number of continuing education (CE) hours. The exact number of hours required varies by state.
In the case of continued education in real estate, one must take 14 hours of CE specified mandated by the commission. This means that the commission has identified specific topics or areas of study that they believe are important for real estate professionals to be knowledgeable about, and require that agents and brokers complete courses in those areas.
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A government agency is accepting tenders for the construction of a public building. There are n firms with an interest in undertaking the project. Each firm i has a minimum cost Ci that it would incur in construction. (Ci includes the opportunity cost of capital.) The contract will be awarded by having the firms submit sealed bids. Firm i’s bid Bi is the amount of money that it requires to undertake the project. The contract will be awarded to the firm submitting the lowest bid and that firm will be paid an amount of money equal to the second-lowest bid. Prove that a bid of Ci is a dominant strategy for arbitrary firm i.
Bidding lower than ci would result in a lower payoff for firm i.
to prove that a bid of ci is a dominant strategy for firm
i, we need to show that regardless of the bids submitted by other firms, firm i will always maximize its payoff by bidding ci . interactions let's consider the two possible scenarios:
if firm i submits a bid lower than ci:
in this case, firm i may have a chance of winning the contract if its bid is the lowest. however, since the contract will be awarded to the firm with the lowest bid and that firm will be paid the second-lowest bid, firm i's payoff will be less than ci. 2. if firm i submits a bid higher than ci:
if firm i bids higher than ci, it reduces the chances of winning the contract because there may be other firms with lower bids. in this case, firm i will not win the contract and will receive no payoff.
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An order for 1000 units of Product M has been placed. There are currently 100 units of Product M on hand. Each M requires 4 units of Component N. There are 20 units of N on hand. What are the net requirements for N?
a. 1580
b. 3580
c. 500
d. 400
e. 1850
The best option is option A. The given data shows that an order for 1000 units of Product M has been placed, and currently, 100 units of Product M are on hand.
Each M requires 4 units of Component N. There are 20 units of N on hand. We need to calculate the net requirements for N. The gross requirement of component N would be 1000 × 4 = 4000 units. (Since 1000 units of M has been ordered and 1 unit of M requires 4 units of N) The total requirement of component N would be:4000 units (gross requirement) - 20 units (on hand) = 3980 units The net requirement of component N would be 3980 units. Therefore, option (a) 1580 is the correct answer. The net requirement of an item is the amount of an item that must be purchased or produced to meet the gross requirements, taking into account the quantity of the item already on hand.
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Which type of firm is legally required to setup a doubleentry booking system to record its business transactions?
a. limited liability company
b. proprietorship
c. corporation
d. partnership
The type of firm that is legally required to set up a double-entry booking system to record its business transactions is a corporation. The correct answer is option (c) corporation.
A corporation is legally required to set up a double-entry booking system to record its business transactions. This system is essential for accurate and transparent financial reporting. Double-entry bookkeeping is a method where every transaction is recorded in at least two accounts, with one account debited and another credited. It helps ensure that the accounting equation (Assets = Liabilities + Equity) remains balanced and allows for the identification of errors or discrepancies.
Corporations, as separate legal entities, are subject to more stringent regulations and reporting requirements compared to other business structures such as proprietorships, partnerships, or limited liability companies (LLCs). These regulations aim to protect shareholders' interests and ensure transparency in financial reporting. Implementing a double-entry booking system enables corporations to maintain accurate records of their financial transactions, aiding in compliance with legal requirements, financial analysis, and decision-making.
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You can start working on a job that pays $90,000 per year now at t=0. You plan to work for the next 35 years and you expect that your income will grow at 4.5% per year. You plan to save 15% every year and you expect to earn 4.5% per year on your savings.For computational simplicity, assume that you are paid your annual salary in a lump sum at the end of each working year How much will you have when you retire at t=35?
When you retire at t=35, you can expect to have approximately $1,018,785.11.
To calculate the amount you will have when you retire at t=35, we need to consider your annual income, savings, and the growth of your savings over the years.
Given:
Annual salary: $90,000
Number of working years: 35
Income growth rate: 4.5%
Savings rate: 15%
Savings growth rate: 4.5%
Let's calculate the amount you will have when you retire:
Calculate the annual savings:
Annual savings = Annual salary * Savings rate
Annual savings = $90,000 * 0.15 = $13,500
Calculate the total savings over the 35 years:
Total savings = Annual savings * (1 + Savings growth rate)^Number of working years
Total savings = $13,500 * (1 + 0.045)^35
Calculate the future value of your salary at t=35:
Future value of salary = Annual salary * (1 + Income growth rate)^Number of working years
Future value of salary = $90,000 * (1 + 0.045)^35
Calculate the total amount when you retire:
Total amount = Total savings + Future value of salary
Let's calculate the values:
Annual savings = $13,500
Total savings = $13,500 * (1 + 0.045)^35 ≈ $775,994.92
Future value of salary = $90,000 * (1 + 0.045)^35 ≈ $242,790.19
Total amount = $775,994.92 + $242,790.19 ≈ $1,018,785.11
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Imagine you get pulled into a meeting in 30 minutes with a cfo of a $5 billion market cap company. what 3 things would you look at beforehand? sample answer
The 3 things we need to look at beforehand are financial statements,annual report,market analysis.
Before the meeting with the CFO of a $5 billion market cap company, there are three important things you should look at:
1. Financial Statements: Review the company's financial statements, including the balance sheet, income statement, and cash flow statement. These documents will give you an overview of the company's financial health, performance, and cash flow position.
2. Annual Report: Read the company's annual report, which provides insights into its strategy, goals, and recent achievements. It will also include important information about the company's industry, competition, and future prospects.
3. Market Analysis: Conduct a market analysis to understand the industry trends, market share, and competitive landscape of the company. This will help you gain a better understanding of the company's position in the market and identify potential risks or opportunities.
By reviewing these three key areas, you will be better prepared to engage in meaningful discussions with the CFO and contribute to the meeting.
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The Microsoft antitrust case covered in youn textbook embodies many of the gray areas in restrictive practices. Antitrust regulators accused Microsoft of numerous offenses. What was the end result? Microsoft appealed a federal court decision to break up the company and reached a settlement with the government that it would end its restrictive practices. Microsoft won and its practices were not classified as restrictive. The federal government regulators finally dropped their case because the case was too complex to prove. The federal government won its case, and Microsoft was broken into several smaller companies. Your textbook covered 4 possible ways to deal with a natural monopoly. Which approach would be best for consumers? Regulators would split the monopolist into two competing firms. Regulators would allow the monopolist to continue with no government regulation. Regulators would force the monopolist to set its price equal to its marginal cost. Let the natural monopoly charge enough to coverits average costs and earn a normal rate of profit. In cost plus regulation, regulators calculated the average cost of production, added in an amount for the normal rate of profit the firm shouid expect to earn, and set the price for consumers accordingly. In price cap regulation, the regulator sets a price that the firm can charge over the next few years. What is the problem of price cap regulation? It will not work if the price regulators set new prices cvery six months. Low level managers will have too much power. It will not work if the price regulators set the price cap unrealistically low. It will cause long term certainty in the market.
In the Microsoft antitrust case, the end result was that Microsoft reached a settlement with the government, agreeing to end its restrictive practices.
The federal government regulators dropped their case due to its complexity and the difficulties in proving the allegations. Therefore, Microsoft's practices were not classified as restrictive, and the company did not face a breakup.
Regarding the approach to dealing with a natural monopoly, the best approach for consumers would be to force the monopolist to set its price equal to its marginal cost. This approach ensures that the monopolist charges a price that reflects the actual cost of production and does not allow for excessive profits. By setting the price equal to the marginal cost, the monopolist operates more efficiently and provides goods or services at a fairer price for consumers.
The problem with price cap regulation is that it will not work if the price regulators set the price cap unrealistically low. If the price cap is set too low, it may lead to underinvestment, reduced quality, or even exit of the firm from the market. Unrealistically low price caps can create financial difficulties for the regulated company and hinder its ability to provide adequate services.
Therefore, setting the price cap at a reasonable level is crucial to ensuring the long-term certainty and sustainability of the market while balancing the interests of both consumers and the regulated firm.
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Identify the main financial market risks to
which Ryanair is exposed to.
It is worth mentioning that these are some of the main financial market risks faced by Ryanair, but there may be additional risks specific to the company's operations and industry.
Ryanair, as a company operating in the airline industry, is exposed to various financial market risks.
Here are the main ones:
1. Fuel Price Risk: Ryanair's operations heavily rely on fuel, and fluctuations in fuel prices can significantly impact its financial performance. Changes in global oil prices can lead to increased fuel costs, thereby affecting the company's profitability.
2. Currency Exchange Rate Risk: Ryanair operates across different countries and deals with multiple currencies. Changes in exchange rates can affect the company's revenue and expenses. For example, if the currency in which Ryanair generates most of its revenue weakens against the currency in which it pays for fuel and aircraft leases, it can result in higher costs.
3. Interest Rate Risk: Ryanair, like any other business, is exposed to interest rate risks. Changes in interest rates can impact the company's borrowing costs, especially if it has a substantial amount of debt. Higher interest rates can increase Ryanair's interest expenses and negatively impact its financial position.
4. Regulatory and Legal Risk: The airline industry is subject to various regulations and legal requirements, which can have financial implications. Compliance with regulations and potential legal disputes can result in financial penalties, legal costs, and reputational damage.
5. Market Risk: Ryanair's financial performance is influenced by market conditions and competition. Fluctuations in passenger demand, ticket prices, and overall economic conditions can impact the company's revenue and profitability.
It is worth mentioning that these are some of the main financial market risks faced by Ryanair, but there may be additional risks specific to the company's operations and industry.
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d) In July 1944, 44 countries participated in the Bretton Woods Conference in Bretton Woods, New Hampshire. The set of international laws and IGOs that were agreed to at the conference and later established were collectively known as the "Bretton Woods System". Broadly speaking, there were 5 main elements of the Bretton Woods System: 1) a fixed exchange rate system, 2) the General Agreement on Tariffs and Trade (GATT), 3) capital controls, 4) the International Monetary Fund (IMF), and 5) the International Bank of Reconstruction and Development (IBRD) (later the World Bank). Briefly explain how each of these elements of the Bretton Woods System have changed since the establishment of the Bretton Woods System in the 1940s. When answering this question, be sure to state the specific ways that each of these elements of the Bretton Woods System has changed and when the changes you note occurred. (Fact) (10 points)
Bretton Woods System, include the fixed exchange rate system, the General Agreement on Tariffs and Trade (GATT), capital controls, the International Monetary Fund (IMF), and the International Bank of Reconstruction and Development (IBRD) (later the World Bank.
The following are some specific ways in which these elements of the Bretton Woods System have changed:Fixed exchange rate system - The fixed exchange rate system was one of the Bretton Woods System's most important components. It aimed to keep exchange rates between countries stable and predictable.
However, after the system's collapse in 1971, most nations switched to floating exchange rates.GATT - The General Agreement on Tariffs and Trade (GATT) was established to promote international trade and eliminate barriers to it. GATT's successor, the World Trade Organization (WTO), has taken over this responsibility.Capital controls - Capital controls were put in place to prevent countries from investing too much of their money in foreign countries. However, since the 1970s, most nations have lifted their capital controls in order to promote foreign investment.
International Monetary Fund (IMF) - The International Monetary Fund (IMF) was created to lend money to countries experiencing economic difficulties. Since its inception, the IMF has altered its lending conditions to include structural adjustment policies, which often include privatisation and liberalisation policies, in order to promote market-oriented reforms.
International Bank of Reconstruction and Development (IBRD) - The International Bank of Reconstruction and Development (IBRD), later known as the World Bank, was established to provide long-term investment financing for countries in need. Since its inception, the World Bank has increased its focus on poverty reduction and sustainable development.
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2. For the cost function below, determine the MC and ATC functions and also calculate MES output.
What is the ATC at MES output? If this firm produces 40 units, what is the index of scale economies?
What is your answer if the firm produces 80 units?
TC = 2q2 + 10q + 5000
Increased automation would change the total costs to:
TC’ = q2 + 5q + 20,000
What is the threshold level of quantity that would cause the firm to switch to increased automation?
The marginal cost (MC) function for the given cost function TC = 2q^2 + 10q + 5000 is MC = 4q + 10. The average total cost (ATC) function can be derived by dividing the total cost (TC) by the quantity (q), resulting in ATC = (2q^2 + 10q + 5000) / q. To calculate the minimum efficient scale (MES) output, we need to find the quantity at which ATC is minimized.
What is the ATC at MES output?To find the MES output, we need to determine the quantity at which ATC is at its minimum. This occurs when the derivative of ATC with respect to q is equal to zero.
Taking the derivative of ATC = (2q^2 + 10q + 5000) / q with respect to q, we get d(ATC)/dq = (-2q^2 - 10q + 5000) / q^2. Setting this equal to zero and solving for q, we find the MES output.
Once we have the MES output, we can substitute it into the ATC function to calculate the ATC at that level of production.
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A perpetuity will make a sequence of annual payments of 3100,3310,3520,…, with the first payment coming a year from now. If the present value is 155729.16 dollars, what is the effective rate of interest? Answer = percent.
The effective rate of interest for the perpetuity is approximately 1.9913%
To find the effective rate of interest for the perpetuity, we need to use the formula for the present value of perpetuity: PV = C / r, where PV is the present value, C is the annual payment, and r is the interest rate.
Given that the present value is 155,729.16 and the first payment is 3,100, we can plug these values into the formula to solve for the interest rate:
155,729.16 = 3,100 / r
To isolate the interest rate, we can multiply both sides of the equation by r:
155,729.16 * r = 3,100
Now, we can divide both sides of the equation by 155,729.16 to solve for r:
r = 3,100 / 155,729.16
Calculating this, we get r ≈ 0.019913, which is approximately 0.019913 or 1.9913%.
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16) As a perfectly competitive firm it produces more units, TR will: I A) Decrease. B) Curve downwards. C) Curve upwards. D) Increase at a steady rate
As a perfectly competitive firm produces more units, its total revenue (TR) will increase at a decreasing rate, resulting in a downward sloping total revenue curve. Therefore, the correct answer is B) Curve downwards.
The total revenue curve of a perfectly competitive firm will curve downwards as it produces more units, resulting in an increasing but decreasing rate of total revenue. This is because the firm's marginal revenue (MR) is equal to its price, which decreases as output increases due to the law of diminishing marginal utility. As a result, the firm must lower its price to sell additional units, which reduces the revenue gained from each additional unit sold. This leads to a downward sloping total revenue curve. However, the firm's total revenue will still increase as it produces more units, as long as its marginal revenue is positive. Once the firm's marginal revenue becomes zero, its total revenue will reach its maximum point, after which any further increase in output will lead to a decrease in total revenue.
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e. Comparing the equilibrium before the recession with the new long-run (period six) equilibrium, how much does inflation change? How many percentage points of output are lost during the transition? What is this economy's sacrifice ratio? Inflation decreases by The sacrifice ratio equals percentage points. percentage points of output are lost. Aggregate Supply - Work It Out An economy has the given equation for the Phillips curve: T= En -0.75(u - 5) People form expectations of inflation by taking a weighted average of the previous two years of inflation: Eπ = 0.6-1 +0.47-2 Okun's law for this economy is: Y-Y_1 Y_1 The economy begins at its natural rate of unemployment with a stable inflation rate of 8 percent. = 2.0 - 2.5(u-u-1) e. Comparing the equilibrium before the recession with the new long-run (period six) equilibrium, how much does inflation change? How many percentage points of output are lost during the transition? What is this economy's sacrifice ratio? Inflation decreases by The sacrifice ratio equals percentage points. percentage points of output are lost.
In the given scenario, the economy experiences a decrease of 4 percentage points in inflation, a loss of 5 percentage points in output, and has a sacrifice ratio of 1.25.
Here are the steps involved in computing the change in inflation, output loss, and sacrifice ratio for an economy that experiences a recession:
1. Compute the change in inflation. The change in inflation is calculated by subtracting the inflation rate before the recession from the inflation rate after the recession.
2. Compute the output loss. The output loss is calculated by subtracting the output level after the recession from the output level before the recession.
3. Compute the sacrifice ratio. The sacrifice ratio is calculated by dividing the output loss by the change in inflation.
Here are the specific calculations for the economy in your question:
Change in inflation: The inflation rate before the recession is 8%. The inflation rate after the recession is 4%. Therefore, the change in inflation is 8% - 4% = 4%.Output loss: The output level after the recession is 95% of the output level before the recession. Therefore, the output loss is 5%.Sacrifice ratio: The sacrifice ratio is 5% / 4% = 1.25.In this case, the economy's inflation decreases by 4 percentage points. The economy's output loss is 5 percentage points. The economy's sacrifice ratio is 1.25.
It is important to note that the sacrifice ratio is not a fixed number. It can vary depending on the severity of the recession and the monetary policy used to bring inflation under control.
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XYZ Corporation, located in the United States, has an accounts payable obligation of ¥750 million payable in one year to a bank in Tokyo The current spot rate is 7116/$1.00 and the one year forward rate is ¥/109/$1.00. The annual interest rate is 3 percent in Japan and 6 percent in the United States. XYZ can also buy a one-year call option on yen at the strike price of $0.0086 per yen for a premrum of 0.012 cent per yen. The future dollar cost of meeting this obligation using the forward hedge is $6,450,000
$6,545,400
$6,653,833
$6,880,734.
The future dollar cost of meeting the obligation using the forward hedge is approximately $6,880,733.94.
To determine the future dollar cost of meeting the accounts payable obligation using the forward hedge, we can follow these steps:
1. Calculate the future value of the payable obligation using the one-year forward rate:
Future Value = ¥750 million / (¥109/$1) = $6,880,733.94 (rounded to the nearest cent)
Therefore, the future dollar cost of meeting the obligation using the forward hedge is approximately $6,880,733.94.
Among the provided answer choices, the closest value is $6,880,734, which matches the calculated future dollar cost.
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In impact evaluation, the group that does not receive the
intervention is called:
A. The control group
B. The experimental group
C. The treatment group
D. The participant group
A. The control group
In impact evaluation, the group that does not receive the intervention is called the control group. control group serves as a reference or comparison group against which the effects of the intervention are measured.
By comparing the outcomes of the control group to the group that receives the intervention (experimental or treatment group), researchers can determine the impact oreffectiveness of the intervention. The control group helps establish a baseline for comparison and helps ensure that any observed changes in the treatment group are a result of the intervention itself rather than external factors.In impact evaluation, the control group is a group of individuals or entities that do not receive the intervention being studied. The purpose of including a control group in impact evaluations is to establish a baseline against which the effects of the intervention can be compared. By comparing the outcomes of the control group to those of the group that receives the intervention (experimental or treatment group), researchers can assess the causal impact of the intervention.
The control group is typically selected through random assignment or other rigorous methods to ensure that it is comparable to the treatment group in terms of relevant characteristics. This helps to minimize confounding variables and increases the validity of the impact evaluation.
The control group provides a counterfactual scenario, representing what would have happened to the treated group had they not received the intervention. By comparing the outcomes between the treatment and control groups, researchers can attribute any observed differences to the intervention itself, rather than external factors or mere chance.
In summary, the control group is an essential component of impact evaluation, allowing researchers to isolate and measure the impact of an intervention by comparing it to a group that does not receive the intervention.
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The Ritz-Carlton hotel in St. Louis has 140 standard rooms. It offers a $110 discount fare targeting leisure travelers and regular fare $200 targeting business travelers. Demand for low fare rooms arrives early and is abundant. The demand for high fare rooms follows a normal distribution with mean 40 and standard deviation 10.
a) What is the optimal booking limit for the low-fare customers?
b) Assume demand for regular-fare rooms is price insensitive (demand stays the same regardless of the regular fare). What value of the regular fare would make a booking limit of 70 optimal
The optimal booking limit for low-fare customers is 70 rooms. To determine the optimal booking limit for low-fare customers, we need to compare the demand for low-fare rooms with the available capacity.
Since the demand for low-fare rooms is abundant, we can set the booking limit to the maximum capacity available, which is 140 rooms.
b) To find the regular fare that would make a booking limit of 70 optimal, we need to consider price sensitivity. Since demand for regular-fare rooms is assumed to be price insensitive, it means the demand will remain the same regardless of the regular fare. Therefore, the value of the regular fare does not affect the optimal booking limit, and we can still set it to 70 rooms.
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Explain disadvantages of glass in window glazing( 100
to 150 words)
2) suggest polymer than can be used to replce glass in window
glazing and explain the product properties
Disadvantages of glass in window glazing: Glass can have a few disadvantages in window glazing. One of the main disadvantages of glass is that it is fragile and can break easily, leading to safety issues, particularly in public areas where large windows are involved.
Glass also has a high thermal conductivity, which can cause heat loss in buildings, increasing heating costs. It is also less effective than other types of glazing in insulating sound and is less impact resistant than some other materials.Polymer that can replace glass in window glazing: Poly car bonate is a polymer that can be used to replace glass in window glazing. Poly car bonate is a lightweight, shatterproof plastic that is virtually unbreakable, making it a much safer alternative to glass.
It is also a good insulator, which means it can help reduce heat loss and lower energy costs. Poly car bonate is also much more effective than glass in sound insulation, making it a popular choice for noise control in buildings. Lastly, it is impact resistant and can withstand a wide range of temperatures, making it an excellent choice for use in harsh environments.
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The ILC Company (ILC) is considering a capital restructuring to allow $500 million in debt. Currently, ILC is an all-equity firm with earnings before interest and taxes (EBIT) of $380 million. Assume unlevered firms in the same industry have betas of 0.90. You can assume this would be the beta for ILC too (ILC is also unlevered). Assume the market risk premium is 7% and the risk-free interest rate is 5%. Assume that the corporate tax rate is 35%. You may assume that all earnings are paid out as dividends, and that any future debt will be used to buy stock back. For simplicity, assume that cash flows are perpetual, and debt is perpetual.
a. How would the proposed restructuring change the value of ILC as a whole? (Hint: You may not need to compute the new cost of capital to find the new firm value.)
b. If ILC was considering issuing $2 billion in debt instead of $500 million, would the methodology you used in the previous question be equally appropriate? Why or why not? Please limit your answer to 3 sentences or less.
The proposed restructuring, which introduces $500 million in debt, would change the value of ILC as a whole. b. No, the methodology used in the previous question would not be equally appropriate if ILC was considering issuing $2 billion in debt instead of $500 million
a.The value of the firm can be determined by the formula: Firm Value = EBIT * (1 - Tax Rate) / Cost of Capital. As ILC is an all-equity firm, its current cost of capital is equivalent to the unlevered cost of capital, which is based on the industry beta and the risk-free rate. By plugging in the given values, the new firm value can be calculated.
b. No, the methodology used in the previous question would not be equally appropriate if ILC was considering issuing $2 billion in debt instead of $500 million. The methodology assumes perpetual cash flows and perpetual debt, which may not hold true for such a significant increase in debt. The impact on the firm's risk profile, financial stability, and cost of capital would likely be different with a higher level of debt, necessitating a more comprehensive analysis.
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Larissa borrowed $8 million and planned to repay the loan by making equal month-end payments over a period of 10 years. The interest rate on the loan is 4.8%, compounded monthly. a) Determine the size of the monthly payments. b) Of the 72 nd payment, how much are used to repay the principal and the interest payment for the month respectively?
The size of the monthly payments comes out to approximately $87,267.22.
To determine the size of the monthly payments, we can use the formula for the present value of an ordinary annuity. The formula is: PMT = PV / [(1 - (1 + r)^-n) / r] where PMT is the monthly payment, PV is the present value (the loan amount), r is the monthly interest rate, and n is the total number of payments.
To find out how much of the 72nd payment goes towards principal and interest, we can use an amortization schedule. An amortization schedule breaks down each payment into principal and interest portions. However, to calculate this, we need the exact payment date.
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Linkcomn expects an Earnings before Taxes of 750000S every year. The firm currently has 100% Equity and cost of raising equity is 15%. If the company can borrow debt with an interest of 10%. What will be the value of the company if the company takes on a debt equal to 60% of its levered value? What will be the value of the company if the company takes on a debt equal to 40% of its levered value? Assume the company's tax rate is 30%. (Must show the steps of calculation)
Taking on debt equal to 60% of its levered value results in a company value of 5,900,000 S, while taking on debt equal to 40% of its levered value yields a value of 5,600,000 S.
The value of the company, assuming the company takes on debt equal to 60% of its levered value, can be calculated as follows:
Step 1: Calculate the levered value of the company:
Levered value = Earnings before Taxes / Cost of Equity
Levered value = 750,000 / 0.15 = 5,000,000
Step 2: Determine the debt taken on:
Debt = 60% * Levered value = 0.6 * 5,000,000 = 3,000,000
Step 3: Calculate the tax shield on debt:
Tax shield = Debt * Tax rate = 3,000,000 * 0.30 = 900,000
Step 4: Calculate the value of the company:
Value of the company = Levered value + Tax shield = 5,000,000 + 900,000 = 5,900,000
Therefore, if the company takes on debt equal to 60% of its levered value, the value of the company will be 5,900,000 S.
Similarly, if the company takes on debt equal to 40% of its levered value, the calculation would be as follows:
Step 1: Calculate the levered value of the company:
Levered value = Earnings before Taxes / Cost of Equity
Levered value = 750,000 / 0.15 = 5,000,000
Step 2: Determine the debt taken on:
Debt = 40% * Levered value = 0.4 * 5,000,000 = 2,000,000
Step 3: Calculate the tax shield on debt:
Tax shield = Debt * Tax rate = 2,000,000 * 0.30 = 600,000
Step 4: Calculate the value of the company:
Value of the company = Levered value + Tax shield = 5,000,000 + 600,000 = 5,600,000
Therefore, if the company takes on debt equal to 40% of its levered value, the value of the company will be 5,600,000 S.
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