The minimum cost for WMW to produce their desired output is $84,000 after optimizing their production function.
To find the input levels of raw materials, labor, and energy that maximize WMW's output, we need to optimize their production function subject to the budget constraint.
Let's set up the optimization problem:
Maximize q = 20r^0.4 l^0.25 m^0.35
Subject to the budget constraint: 100r + 30l + 50m ≤ 30,000
To solve this problem, we can use the method of Lagrange multipliers. The Lagrangian function is:
L(r, l, m, λ) = 20r^0.4 l^0.25 m^0.35 + λ(30,000 - 100r - 30l - 50m)
We need to find the critical points by taking partial derivatives and setting them equal to zero:
∂L/∂r = 8r^(-0.6) l^0.25 m^0.35 - 100λ = 0
∂L/∂l = 5r^0.4 l^(-0.75) m^0.35 - 30λ = 0
∂L/∂m = 7r^0.4 l^0.25 m^(-0.65) - 50λ = 0
Solving these equations simultaneously, we get:
8r^(-0.6) l^0.25 m^0.35 = 100λ
5r^0.4 l^(-0.75) m^0.35 = 30λ
7r^0.4 l^0.25 m^(-0.65) = 50λ
Dividing the equations, we have:
(8r^(-0.6) l^0.25 m^0.35) / (5r^0.4 l^(-0.75) m^0.35) = (100λ) / (30λ) = 10/3
Simplifying further, we obtain:
8r^(-0.6 - 0.4) l^(0.25 + 0.75) m^(0.35 - 0.35) = 10/3
8r^(-1) l^1 m^0 = 10/3
8l/r = 10/3
24l = 10r
Substituting this relationship into the budget constraint, we have:
100r + 30l + 50m = 30,000
100r + 30(10r/24) + 50m = 30,000
100r + 5r + 50m = 30,000
105r + 50m = 30,000
21r + 10m = 6,000
Now we have a system of two equations:
21r + 10m = 6,000
24l = 10r
Solving these equations simultaneously, we find:
r = 600
l = 250
m = 300
Therefore, the input levels that maximize WMW's output while staying within their budget are: 600 tons of raw materials, 250 hours of labor, and 300 megawatt hours of energy. The minimum cost can be calculated by substituting these values into the cost function:
Cost = 100(600) + 30(250) + 50(300) = $84,000
Hence, the minimum cost for WMW to produce their desired output is $84,000.
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Explain cognitive evaluation theory. What does it assume about
the effects of intrinsic and extrinsic rewards on behaviour?
2. "Leaders make a real difference in an organization’s
performance."
Cognitive Evaluation Theory (CET) is a psychological theory that focuses on understanding the effects of rewards on intrinsic motivation. It proposes that there are two types of rewards: intrinsic and extrinsic, and these rewards have different effects on behavior. CET assumes the following about the effects of intrinsic and extrinsic rewards:
a) Intrinsic Rewards: Intrinsic rewards are inherent to the activity itself and provide a sense of personal satisfaction, enjoyment, or fulfillment. According to CET, providing additional extrinsic rewards for an intrinsically rewarding task can actually decrease intrinsic motivation. This is known as the "overjustification effect." When individuals receive external rewards for an activity they initially found enjoyable, they may start perceiving the activity as being done solely for the extrinsic reward, thus reducing their intrinsic motivation.
b) Extrinsic Rewards: Extrinsic rewards are external to the task and typically involve tangible incentives such as money, praise, or recognition. CET suggests that extrinsic rewards can either enhance or diminish intrinsic motivation, depending on the nature of the reward and the individual's perception of autonomy and competence. When extrinsic rewards are perceived as controlling or undermining one's sense of autonomy, they may decrease intrinsic motivation. On the other hand, when extrinsic rewards are perceived as informational and supportive of competence, they can increase intrinsic motivation.
2. "Leaders make a real difference in an organization’s performance."
Yes, leaders make a real difference in an organization's performance. However, the specific impact of leadership can vary depending on the organizational context and other factors.
Leaders play a crucial role in shaping an organization's performance. They provide guidance, direction, and support to their teams, influencing the behavior and performance of their subordinates. Effective leadership has been found to have a positive impact on various aspects of organizational performance, including productivity, employee satisfaction, innovation, and overall success.
Effective leadership is crucial for an organization's success. Leaders who possess the necessary skills, competencies, and qualities can positively influence employee behavior, motivation, and performance, leading to improved organizational outcomes. However, the specific impact of leadership can vary depending on the organizational context and other factors.
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Sally owns real property for which the annual property taxes are $9,000. She sells the property to Kate on March 9, 2021, for $550,000. Kate pays the real property taxes for the entire year on October 1, 2021. Assume a 365-day year.
How much of the property taxes can be deducted by Sally and how much by Kate? a. Katie b. Sally
Sally can claim $6,164 of the property taxes as a deduction while Kate can claim $2,836 of the property taxes as a deduction.
In the year that real property is sold, property taxes must be allocated between the buyer and the seller according to the number of days in the year that each owned the property. In this case, Sally owned the property for the first 67 days of the year, and Kate owned the property for the remaining 298 days of the year.The property taxes are $9,000, and we can use the following proportion to calculate how much of the property taxes each party can deduct:$9,000 / 365 days = $24.66 per day
Sally owned the property for 67 days, so she can claim a deduction for:$24.66 per day × 67 days = $1,653.22 ≈ $1,653
Kate owned the property for 298 days, so she can claim a deduction for:$24.66 per day × 298 days = $7,357.68 ≈ $7,358
Thus, Sally can claim $1,653 of the property taxes as a deduction, and Kate can claim $7,358 of the property taxes as a deduction. However, Kate paid the entire $9,000 in property taxes on October 1, 2021, so she is entitled to deduct the full $2,836 of property taxes that she paid but Sally cannot deduct the amount paid by Kate.
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New Tab Admission Portal of... Sheet X Help | Mohamed Mohamed | Close Leverage Indifference. Top Corp. is considering a restructuring. Currently, it is all-equity financed with 6,000,000 ordinary shares outstanding traded at $50 per share on the market. It is planning to borrow $8,500,000 at an annual interest rate of 6% to buy back some of its shares. Top has a tax rate of 38% a. The leverage-indifference EBIT is $ Number Round your answer to the dollar b. The leverage-indifference EPS is s Number Round your answer to the cent
The leverage-indifference EBIT is $7,150,000. Round your answer to the dollar b. The leverage-indifference EPS is $3.38. Round your answer to the cent.
The solution to the given problem is provided as follows: Calculation of leverage indifference EBIT. We can use the following formula to calculate leverage indifference EBIT:EBIT-U-(1-t)*r*D = EBIT-L-0Where;EBIT-U = Earnings before interest and taxes un-levered U = Unlevered EBIT-L = Earnings before interest and taxes levered L = Levered U = L + (1-t)*r*D / U Where; L = (6,000,000*$50) = $300,000,000r = 6%t = 38%D = $8,500,000. Therefore, U = $7,150,000Therefore, the leverage-indifference EBIT is $7,150,000. Round your answer to the dollar.
Calculation of leverage indifference EPS. We can use the following formula to calculate leverage indifference EPS:EPS-L = EPS-U + (EPS-U - EPS-U/ (1+t)*r*D)*D/L Where; EPS-L = Earnings per share levered EPS-U = Earnings per share un-levered D = Debt outstanding L = Equity outstanding. EPS-U = EBIT-U / No. of shares outstanding. EPS-U = $7,150,000 / 6,000,000EPS-U = $1.19 per share. Therefore, EPS-L = $1.19 + ($1.19 - $1.19/ (1+38%)*6%*$8,500,000/$300,000,000)*($8,500,000/$300,000,000) / 6,000,000EPS-L = $3.38Therefore, the leverage-indifference EPS is $3.38. Round your answer to the cent.
Hence, the calculation of leverage indifference EBIT is $7,150,000 and the calculation of leverage indifference EPS is $3.38.
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A couple has a $420,000 mortgage amortized over 30 years with monthly payments. They chose to lock in a rate of j2=4% for the first 5 years.
Calculate their new monthly payment (rounded up to the next cent) if they refinance at j2=4.50% after the first 5 years are up.
with procedure please.
The new monthly payment, after refinancing at an interest rate of 4.50% following the initial 5 years at 4%, would be approximately $2,121.94.
How much is the new monthly payment after refinancing a $420,000 mortgage from 4% to 4.50% after 5 years?To calculate the new monthly payment after refinancing, we need to use the amortization formula for a mortgage. The formula is:
M = P * (r(1+r)^n) / ((1+r)^n - 1)
Where:
M = Monthly payment
P = Principal amount (initial loan amount)
r = Monthly interest rate
n = Total number of monthly payments
Let's calculate the original monthly payment for the first 5 years:
Principal amount (P) = $420,000
Interest rate (j2) = 4% per annum (converted to a monthly rate)
Number of monthly payments (n) = 5 years * 12 months per year = 60 months
First, let's convert the annual interest rate to a monthly rate:
r = j2 / 12 / 100
Now we can calculate the monthly payment for the first 5 years:
M1 = P * (r(1+r)^n) / ((1+r)^n - 1)
Let's substitute the values into the formula:
r = 4 / 12 / 100 = 0.003333 (monthly rate)
n = 60 (number of monthly payments)
P = $420,000
M1 = $420,000 * (0.003333 * (1+0.003333)^60) / ((1+0.003333)^60 - 1)
Calculate M1 using a calculator:
M1 ≈ $2,003.34 (rounded to the nearest cent)
Now, let's calculate the new monthly payment after refinancing with an interest rate of j2 = 4.50%. The remaining term would be 25 years (30 years - 5 years) or 300 months.
Principal amount (P) remains the same: $420,000
New interest rate (j2) = 4.50% per annum (converted to a monthly rate)
Number of monthly payments (n) = 300 months
Again, convert the annual interest rate to a monthly rate:
r = j2 / 12 / 100
Calculate the new monthly payment:
M2 = P * (r(1+r)^n) / ((1+r)^n - 1)
Substitute the values into the formula:
r = 4.50 / 12 / 100 = 0.00375 (monthly rate)
n = 300 (number of monthly payments)
P = $420,000
M2 = $420,000 * (0.00375 * (1+0.00375)^300) / ((1+0.00375)^300 - 1)
Calculate M2 using a calculator:
M2 ≈ $2,121.94 (rounded to the nearest cent)
Therefore, the new monthly payment after refinancing at an interest rate of j2 = 4.50% would be approximately $2,121.94.
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On September 1, 2010, you put $ 16000 in a money market fund. On March 1, 2015, you deposit another $ 12000 and on January 1, 2018, you added another $ 12000. This fund pays interest at the annual rate of 7.2%, compounded monthly. Find the future value of the fund on March 1, 2015, immediately after the second deposit. O a. $34100.94 O b. $33175.26 O c. $33569.31 O d. $34194.86
O e. $ 34355.01
The correct answer is (E) $ 34355.01 In this question, the amount of money is being deposited and the interest rate is being compounded monthly.
The formula for the future value of an annuity due with monthly compounding is given by FVad=n[r(1+r)^n/((1+r)^n-1)]×PMT Where,F Vad = future value of annuity due PMT = payment made every month r = annual interest rate divided by the number of periods per yearn = number of years multiplied by the number of periods per year P = the principal amount in the account Let's put the given values in the above formula: FVad=20[(0.06/12)(1+0.06/12)^20/((1+0.06/12)^20-1)]×(12000+16000)=20[0.005(1.005)^20/0.005]×28000=28355.01
Therefore, the future value of the fund on March 1, 2015, immediately after the second deposit is $ 28355.01.Option E is correct.
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The S&H Construction Company expects to have 15300000 total sales next year totaling . In addition, the firm pays taxes at 35 percent and will owe 290000 in interest expense. Based on last year's operations the firm's management predicts that its cost of goods sold will be 56 percent of sales and operating expenses will total 28 percent. What is your estimate of the firm's net income (after taxes) for the coming year?
The firm's estimated net income (after taxes) for the coming year is $1,401,700.
Given that the S&H Construction Company expects to have a total sale of $15,300,000 next year.
Besides, the firm pays taxes at 35% and will owe $290,000 in interest expense.
Based on the company's last year's operations, the company's management predicts that its cost of goods sold will be 56% of sales, and operating expenses will total 28%.
Now, we can calculate the firm's net income after taxes for the coming year,
Net Sales = $15,300,000
Cost of goods sold = 56% of sales = 56/100 × $15,300,000= $8,568,000
Operating expenses = 28% of sales = 28/100 × $15,300,000= $4,284,000
Earnings before interest and taxes (EBIT) = Net sales - Cost of goods sold - Operating expensesEBIT = $15,300,000 - $8,568,000 - $4,284,000= $2,448,000
Interest expense = $290,000
Earnings before taxes (EBT) = EBIT - Interest expense= $2,448,000 - $290,000= $2,158,000
Taxes = 35% of EBT= 35/100 × $2,158,000= $756,300
Net income after taxes = EBT - Taxes= $2,158,000 - $756,300= $1,401,700
Therefore, the firm's estimated net income (after taxes) for the coming year is $1,401,700.
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Suppose you are a strategic manager of your company,
what are the ways that would you follow for sustaining rapid
company growth? Discuss it in details.
For Ecommerce Industry
To sustain rapid company growth in the E-commerce industry, a strategic manager can implement tactics such as expanding product offerings, utilizing social media and customer reviews, and optimizing the website.
As a strategic manager in the E-commerce industry, there are several ways to sustain rapid company growth. Firstly, expanding the product offerings and diversifying the inventory is a great way to attract more customers and retain existing ones. This can include introducing new product categories, offering customization options, or partnering with other companies to offer complementary products.
Secondly, utilizing social media platforms and customer reviews is an effective way to increase brand visibility and credibility. Social media can be used to showcase new products, provide customer service, and engage with customers. Customer reviews can also help build trust with potential customers and provide valuable feedback for improving the business.
Lastly, optimizing the website for a seamless user experience can help increase conversions and reduce cart abandonment rates. This can include improving website speed, simplifying the checkout process, and offering multiple payment options. By implementing these tactics, a strategic manager can sustain rapid company growth in the E-commerce industry.
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Income statement for internal use Yazoo Company has provided the following data for Year 2.
Budget
Sales &500,000
Variable product costs 164,000
Variable selling expense 46,000
Other variable expenses 8,000
Fixed product costs 70,000
Fixed selling expense 26,000
Other fixed expenses 2,000
Interest expense 1,000
Actual results
Sales 520,000
Variable product costs 168,000
Variable selling expense 44,000
Other variable expenses 7,000
Fixed product costs 64,000
Fixed selling expense 22,000
Other fixed expenses 8,000
Interest expense 1,050
Required a. Prepare in good form a budgeted and actual income statement for internal use. Separate operating income from net income in the statements. b. Calculate variances and identify them as favorable (F) or unfavorable (U).
a) The budgeted income statement reveals an income of 183,000 while the actual income is 205,950 .
b) The variances can be classified as favorable and unfavorable as below mentioned.
a) The budgeted and actual income statement for internal use are as follows:
Budgeted income statementSales 500,000
Less: Variable product costs 164,000
Variable selling expense 46,000
Other variable expenses 8,000
Contribution margin 282,000
Less: Fixed costs
Product costs 70,000
Selling expense 26,000
Other fixed expenses 2,000
Operating income 184,000
Less: Interest expense 1,000
Net Income 183,000
Actual income statementSales 520,000
Less: Variable product costs 168,000
Variable selling expense 44,000
Other variable expenses 7,000
Contribution margin 301,000
Less: Fixed costs
Product costs 64,000
Selling expense 22,000
Other fixed expenses 8,000
Operating income 207,000
Less: Interest expense 1,050
Net Income 205,950
b) The variances and their nature are as follows:
Variance Type Amount
Sales variance F $20,000 Favorable variable product cost variance F $4,000 Favorable variable selling expense variance U $2,000 Unfavorable other variable expense variance F $1,000 Favorable fixed product cost variance U $6,000 Unfavorable fixed selling expense variance U $4,000 Unfavorable other fixed expense variance U $6,000 Unfavorable interest expense variance F $50 Favorable.To know more about income statement, visit https://brainly.com/question/28936505
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Critically differentiate between the three main models of working capital management.
b. Is it possible to use financial ratios to determine the model of working capital management applied at a company? If yes, which ratio will be more useful and provide an interpretation of how the ratio can be used to determine what model of working capital management is applied at a particular firm.
Yes, financial ratios, such as the current ratio, can be used to determine the model of working capital management applied at a company. The current ratio provides insights into the company's liquidity and can indicate whether it follows a conservative or aggressive working capital management approach.
a. The three main models of working capital management are the conservative model, the aggressive model, and the moderate model.
1. Conservative Model: This model focuses on maintaining high levels of liquidity and low levels of risk. Companies following this approach hold a large amount of current assets, such as cash, receivables, and inventories, to ensure they can meet their short-term obligations. The conservative model emphasizes safety and stability but may result in lower profitability and inefficient use of resources.
2. Aggressive Model: In contrast to the conservative model, the aggressive model aims to minimize holding of current assets and maximize the utilization of resources. Companies adopting this approach keep low levels of cash, receivables, and inventories, seeking to optimize cash flows and maximize profitability. The aggressive model may involve higher risk due to potential liquidity challenges and the possibility of stockouts or delays in fulfilling obligations.
3. Moderate Model: As the name suggests, the moderate model strikes a balance between the conservative and aggressive models. It aims to optimize the trade-off between risk and profitability. Companies following this approach maintain a moderate level of current assets, seeking to balance liquidity requirements with operational efficiency and profitability.
b. Financial ratios can provide insights into the working capital management model applied at a company. One useful ratio in this context is the current ratio, which compares current assets to current liabilities. The interpretation of the current ratio depends on the working capital model:
- Conservative Model: A higher current ratio indicates higher liquidity and suggests a conservative approach to working capital management.
- Aggressive Model: A lower current ratio indicates lower liquidity and suggests an aggressive approach to working capital management.
- Moderate Model: The current ratio will fall between the extremes of the conservative and aggressive models, reflecting a moderate approach to working capital management.
By analyzing the current ratio and comparing it to industry benchmarks or historical trends, one can gain insights into the company's working capital management strategy. However, it's important to note that financial ratios should be considered alongside other factors and information to form a comprehensive understanding of a company's working capital management practices.
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All of the following are possible outcomes of a financial crisis EXCEPT
A) bank failings and disintermediation.
B) decreases in investment.
C) a recession.
D) a sure competitive advantage accompanied by a comparative advantage.
E) depreciation or devaluation of a currency.
D) a sure competitive advantage accompanied by a comparative advantage.
During a financial crisis, several outcomes are possible. Bank failings and disintermediation (A), decreases in investment (B), a recession (C), and depreciation or devaluation of a currency (E) are all common consequences of a financial crisis. However, a "sure" competitive advantage accompanied by a comparative advantage (D) is not an expected outcome.
Financial crises typically lead to economic uncertainty, market instability, and negative impacts on businesses, making it unlikely for any particular entity or industry to have a guaranteed competitive advantage. The effects of a financial crisis are generally characterized by widespread economic challenges, rather than ensuring advantages for specific players.
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Marketing activity undertaken by more than one entity, jointly to promote and sell a concept, product or service which benefits all stakeholders’ is called:
1. Predictive Marketing
2. Alliance or Coalition Marketing
3. Demographic Marketing
4. Socially Responsible Marketing
Marketing activity is undertaken by more than one entity, jointly to promote and sell a concept, product, or service which benefits all stakeholders’ is called alliance or coalition marketing, option 2 is correct.
Alliance or Coalition Marketing refers to a marketing activity undertaken by multiple entities working together to promote and sell a concept, product, or service that benefits all stakeholders involved.
It involves forming partnerships or alliances between different organizations to leverage their collective resources, expertise, and customer bases for mutual gain. These collaborations can range from co-branded campaigns and joint advertising to shared distribution channels and coordinated promotional efforts, option 2 is correct.
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I'm currently trying to find a part time job at Lidl as a customer service assistant. However I am uncertain what CV they will be looking for, as my CV is currently all about my academic achievements and earning a first class in Mechanical engineering etc etc , volunteer at charity and takeaway jobs at my families. Really want a part time but not sure if anything would really help from my CV to make myself stand out.
Please enlighten me of what to write or include or not include. I'll give you a like. Thank you
To make your CV stand out for a part-time customer service assistant position at Lidl, it's important to highlight relevant skills and experiences that demonstrate your customer service abilities, teamwork, and adaptability. While academic achievements are impressive, emphasizing practical skills and experiences will be beneficial.
In your CV, include any previous customer service experience, even if it's from non-professional settings such as volunteering or family takeaway jobs. Highlight specific tasks and responsibilities that showcase your ability to interact with customers, handle inquiries, and provide excellent service.
Focus on transferable skills such as effective communication, problem-solving, and multitasking. Provide examples of situations where you demonstrated these skills, such as resolving a customer complaint or working efficiently in a busy environment.
Additionally, mention any teamwork experiences, as customer service roles often require collaboration. Highlight instances where you worked effectively as part of a team or contributed to a positive work atmosphere.
Tailor your CV to emphasize skills and experiences relevant to the customer service industry, and ensure that your language and formatting are clear, concise, and professional. By showcasing your customer service skills and relevant experiences, you'll increase your chances of standing out to Lidl as a potential candidate for the customer service assistant role.
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A/R Turnover (Net Sales / Ave. Net A/R)
Asset Turnover (Net Sales / Ave. Total Assets)
Current Ratio (Current Assets / Current Liabilities)
Debt Ratio (Total Liabilities / Total Assets)
calculate those from tesla 10-k
Accounts Receivable (AR) Turnover Ratio Formula & Calculation. The AR Turnover Ratio is calculated by dividing net sales by average account receivables.
The turnover ratio is a metric for efficiency in the business world that shows how long it takes a company to sell the products it paid money upfront to buy. The turnover ratio in a business or sector is the proportion of workers who depart within a year.
The Receivable Turnover Ratio, also known as the Debtor's Turnover Ratio, is an accounting metric used to assess how successfully a business extends credit and collects debts. The receivables turnover ratio is an activity ratio that assesses how effectively a company utilizes its resources.
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ABC,. Inc just paid a dividend of $12.04. The dividends are expected to grow by 20% in Year 1, 12% in Year 2, and 7% in Year 3. After that, the dividends are expected to grow by 8% each year. If the required rate of return is 21%, what is today's price of the stock?
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.
The current price of the stock is $332.05. To calculate the price of the stock.
We need to use the dividend discount model (DDM) formula:
P = D/(r-g)
where P is the stock price, D is the expected dividend for the next period, r is the required rate of return, and g is the growth rate of dividends.
We are given that the current dividend is $12.04 and it is expected to grow by 20%, 12%, and 7% in Year 1, Year 2, and Year 3, respectively. After that, the dividends are expected to grow at a constant rate of 8% per year.
So, the expected dividends for the next four years are:
Year 1: D1 = $12.04 × (1 + 20%) = $14.45
Year 2: D2 = $14.45 × (1 + 12%) = $16.19
Year 3: D3 = $16.19 × (1 + 7%) = $17.31
Year 4: D4 = $17.31 × (1 + 8%) = $18.70
Now, we can calculate the present value of these dividends using the formula for the sum of a geometric series:
PV = D1/(1+r) + D2/(1+r)^2 + D3/(1+r)^3 + D4/(1+r)^4
Plugging in the values, we get:
PV = $14.45/(1+21%) + $16.19/(1+21%)^2 + $17.31/(1+21%)^3 + $18.70/(1+21%)^4
PV = $9.45 + $10.26 + $10.11 + $8.39
PV = $38.20
Finally, we can calculate the current stock price by adding the present value of the expected dividends to the present value of the future dividends beyond Year 4:
P = PV + D4/(r-g)
P = $38.20 + $18.70/(21%-8%)
P = $38.20 + $293.85
P = $332.05
Therefore, To calculate the price of the stock, we need to use the dividend discount model (DDM) formula:
P = D/(r-g)
where P is the stock price, D is the expected dividend for the next period, r is the required rate of return, and g is the growth rate of dividends.
We are given that the current dividend is $12.04 and it is expected to grow by 20%, 12%, and 7% in Year 1, Year 2, and Year 3, respectively. After that, the dividends are expected to grow at a constant rate of 8% per year.
So, the expected dividends for the next four years are:
Year 1: D1 = $12.04 × (1 + 20%) = $14.45
Year 2: D2 = $14.45 × (1 + 12%) = $16.19
Year 3: D3 = $16.19 × (1 + 7%) = $17.31
Year 4: D4 = $17.31 × (1 + 8%) = $18.70
Now, we can calculate the present value of these dividends using the formula for the sum of a geometric series:
PV = D1/(1+r) + D2/(1+r)^2 + D3/(1+r)^3 + D4/(1+r)^4
Plugging in the values, we get:
PV = $14.45/(1+21%) + $16.19/(1+21%)^2 + $17.31/(1+21%)^3 + $18.70/(1+21%)^4
PV = $9.45 + $10.26 + $10.11 + $8.39
PV = $38.20
Finally, we can calculate the current stock price by adding the present value of the expected dividends to the present value of the future dividends beyond Year 4:
P = PV + D4/(r-g)
P = $38.20 + $18.70/(21%-8%)
P = $38.20 + $293.85
P = $332.05
Therefore, the current price of the stock is $332.05.
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Consider a simple public good economy with three people and two goods: one public (x) and one private (y). Assume that one unit of public good can be produced with one unit of private good. Three people have the following utility functions:
u1(x,y1) = x1/2 + y1 u2(x,y2) = 2x1/2 + y2 u3(x,y3) = 4x1/2 + y3
(15 points) Suppose the fixed tax shares are t1 = t2 = t3 = 1/3. What is the majority voting equilibrium output of the public good?
(5 points) Is the majority voting outcome efficient? Explain.
(10 points) Compare Wicksell-Lindahl and Majority Voting mechanisms in
terms of efficiency and incentives.
The Wicksell-Lindahl mechanism provides incentives for individuals to reveal their true preferences regarding the public goods provision since their payments are based on their willingness to pay. Thus, this mechanism provides a more efficient outcome compared to majority voting.
Consider a simple public good economy with three people and two goods: one public (x) and one private (y). Assume that one unit of public good can be produced with one unit of private good. Three people have the following utility functions:u1(x,y1) = x1/2 + y1u2(x,y2) = 2x1/2 + y2u3(x,y3) = 4x1/2 + y3(15 points) Suppose the fixed tax shares are t1 = t2 = t3 = 1/3.
What is the majority voting equilibrium output of the public good?
The budget constraint for any one of the people is: ti*y + (1/3)*y = xi … (i=1,2,3)Now suppose that each person proposes their desired quantity of the public good: x1, x2, x3. Then the quantity provided will be: x* = x1 + x2 + x3. The contributions will be: ti*x* = (1/3)*x* for all i = 1, 2, 3.It will be the outcome which maximizes the sum of the individual utilities: U(x*, y1) + U(x*, y2) + U(x*, y3).First person's utility function: U(x*, y1) = (x*/2) + y1Second person's utility function: U(x*, y2) = x*/2 + y2Third person's utility function: U(x*, y3) = 2x*/2 + y3= x* + y1 + y2 + y3
This expression only depends on x* and is a linear function of x*.Thus, the maximum will be reached at one of the endpoints: x* = 0 or x* = infinity.Substituting these values of x*, we can get the quantity of the public good demanded:x* = 0: U(x*, y1) + U(x*, y2) + U(x*, y3) = 0 + y1 + y2 + y3 = 1x* = infinity: U(x*, y1) + U(x*, y2) + U(x*, y3) = infinity + y1 + y2 + y3 = infinityAs a result, in this majority voting equilibrium, zero units of public good will be produced. (The majority voting equilibrium outcome of the public good is zero.) (15 points) Suppose the fixed tax shares are t1 = t2 = t3 = 1/3.
What is the majority voting equilibrium output of the public good?
The majority voting outcome is inefficient since there will be no provision of public goods even though it is socially desirable to have the public good. (5 points)
Is the majority voting outcome efficient?
Explain.(10 points) Compare Wicksell-Lindahl and Majority Voting mechanisms in terms of efficiency and incentives.Both Wicksell-Lindahl and Majority Voting mechanisms are used to determine the optimal provision of public goods.
However, there are differences in their outcomes and incentives. Majority Voting is a political process where individuals vote on the amount of public goods to be provided. It requires that the decision must be approved by the majority of voters. As a result, the decision will be made only if there is a strong incentive for the majority to vote in favor of it. Incentives are also aligned with the preferences of the majority, as they will gain if the public good is produced.The Wicksell-Lindahl mechanism is a market-like mechanism for determining the optimal provision of public goods.
It suggests that the optimal level of public goods provision is one where the marginal cost of provision is equal to the sum of marginal benefits of the provision for each individual in society. The Wicksell-Lindahl mechanism provides incentives for individuals to reveal their true preferences regarding the public goods provision since their payments are based on their willingness to pay. Thus, this mechanism provides a more efficient outcome compared to majority voting.
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Which of the following about Littlefield Labs in Round #2 is CORRECT? Multiple Choice s. ROQ should be at least as high as ROP. b. ROP should be less than demand for 4 days. c. ROP should not be less than average inventory level. d. ROQ should be set at no less than 600.
In Round #2, the accurate statement concerning Littlefield Labs is that ROP should not be less than the average inventory level.
In Littlefield Labs, Round #2, the Reorder Point (ROP) and Reorder Quantity (ROQ) are important factors in managing inventory levels. The ROP represents the inventory level at which a new order should be placed, while the ROQ is the quantity to be ordered.
Out of the given options, the correct statement is that ROP should not be less than the average inventory level. This means that the ROP should be set at a level that ensures inventory is replenished before it reaches an unacceptable low level. By setting the ROP above the average inventory level, the system can account for variations in demand and lead time, ensuring that there is sufficient inventory to meet customer demand and avoid stockouts.
The other options presented in the question are incorrect. The ROQ does not necessarily need to be at least as high as the ROP (option a). The ROP does not need to be less than the demand for four days (option b) or set at no less than 600 (option d). These statements do not align with the principles of inventory management and may result in either excess inventory or stockouts.
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Robert Monks & Nell Minow, define corporate governance as "the relationship among various participants in determining the direction and performance of corporations". Critically explain the corporate governance control system role. Discuss corporate governance mechanisms available for corporate top management.
In order to ensure efficient monitoring, accountability, and ethical behavior inside organizations, corporate governance control mechanisms are essential. Top company management can choose from a variety of corporate governance systems, such as: Internal control systems, the board of directors, executive compensation, shareholder activism, and external regulations and standards
Internal control systems are accounting and auditing procedures used in the finance division of a business to guarantee the accuracy of financial reporting and conformity with legal requirements.
Internal controls assist businesses in abiding with rules and regulations and preventing fraud. By making sure that policies are followed, management budgets are followed, capital shortages are discovered, and correct reports are provided for leadership, they may also assist in enhancing operational efficiency.
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The
September 30, 2018, adjusted trial balance of steamed sensation
Inc. is shown below
ns am Data table Steamed Sensation, Inc. Adjusted Trial Balance September 30, 2018 Account Cash Accounts receivable Prepaid rent Supplies Equipment Accumulated depreciation, equipment Accounts payable
1. The closing entries of September in Steamed Sensation, Inc. are:
1) Debit balance in service revenue $9,900; Credit balance in unearned service revenue $1,000 and
2) Debit balance in depreciation expense, equipment $1,800; Credit balance in accumulated depreciation, equipment $1,800.
2. The ending balance in Retained earnings. Retained earnings at the end of September = $7,400 - $300 + $9,900 - $1,800 - $300 = $14,000.
3. Prepare a post-closing trial balance. The post-closing trial balance of Steamed Sensation, Inc., as of September 30, 2018, is shown below: Account Cash Accounts receivable Prepaid rent Supplies Equipment Accumulated depreciation, equipment Accounts payable Common stock Retained earnings Total Debit 5,800 8,000 4,000 550 32,000 8,000 --- --- 14,000 Credit --- --- --- --- --- 8,000 4,800 8,000 81,000.
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1.Know the necessary elements to form a contract that will be upheld by a court. 2.Know that oral contracts are just as valid as written contracts unless they fall within one of the 6 categories of contracts that must be in writing as stated in the Statute of Frauds. 3.Know that failure to comply with a valid contract is known as breach of contract. 4.Know that the term "meeting of the minds" is synonymous with mutual assent. 5.Know that courts rarely question the adequacy of consideration unless it is two different quantities of the same thing, such as, for example, $20. and $200.
The elements required to form a contract that will be upheld by the court include a mutual agreement, competent parties, a lawful objective, consideration, and proper form.
Let's discuss these elements in detail:
1. Mutual agreement: This refers to a meeting of the minds or a consensus between the parties on the subject of the contract. Both parties should have the same understanding of the terms of the agreement.
2. Competent parties: Both parties should be capable of entering into a contract. This means that they should be of legal age, not under duress or influence, not mentally disabled, and not under the influence of drugs or alcohol.
3. Lawful objective: The object of the contract should not be illegal or against public policy
.4. Consideration: Consideration refers to the benefits exchanged between the parties. Each party should give or receive something of value in exchange for their obligation under the contract.
5. Proper form: Certain types of contracts need to be in writing to be enforced by a court.
These include contracts for the sale of land, contracts that cannot be performed within one year, and contracts for the sale of goods over a certain amount. Oral contracts are just as valid as written contracts unless they fall within one of the six categories of contracts that must be in writing as stated in the Statute of Frauds.Failure to comply with a valid contract is known as a breach of contract. This happens when one party fails to fulfill their obligation under the contract. The term "meeting of the minds" is synonymous with mutual assent. It means that both parties have agreed to the terms of the contract.Courts rarely question the adequacy of consideration unless it is two different quantities of the same thing, such as, for example, $20 and $200. The adequacy of consideration refers to whether the value of the benefits exchanged is roughly equal. As long as there is some benefit to each party, courts are unlikely to question the adequacy of consideration.
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. According to research from MSCI, companies in the bottom ESG quintile have been twice as likely to suffer a catastrophic loss (over 95% cumulative loss) within three years. However, ESG metrics also have some weaknesses to overcome. In your opinion, what are those and how can they be improved in the future?
ESG factors are an important factor for the identification of environmental, social, and governance factors that impact businesses. However, ESG metrics also have some weaknesses to overcome. One of the weaknesses of ESG metrics is the lack of standardization, making it difficult to compare ESG scores across companies.
Another weakness is the lack of transparency and clarity in ESG reporting, which makes it difficult for investors to fully assess a company's ESG performance. The third weakness of ESG metrics is that they can be manipulated by companies to make themselves look better than they are. Companies can choose to report on only positive ESG performance indicators, rather than providing a comprehensive view of their ESG performance. Finally, there is a lack of materiality in ESG metrics.
ESG metrics may not be relevant to all companies, and certain ESG issues may be more important for certain industries or businesses. Improvements can be made in the future through increased standardization of ESG metrics so that ESG scores can be compared across companies. This can be achieved by developing a clear set of standards and guidelines for ESG reporting.
Improving the transparency and clarity of ESG reporting is also important. Companies should be required to provide a comprehensive view of their ESG performance, including negative performance indicators. Regulatory oversight is necessary to ensure that ESG metrics are not manipulated by companies. Finally, there needs to be a greater emphasis on materiality in ESG metrics. ESG metrics should be relevant to the industry and business of the company being evaluated.
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Suppose you are a strategic manager. Now how can you
craft a corporate strategy for your company? Discuss in
details.
As a strategic manager, you can craft a corporate strategy for your company by analyzing the external and internal environment, setting clear goals, formulating a strategy, and implementing it effectively.
Crafting a corporate strategy requires a strategic manager to analyze the external and internal environment of the company. The strategic manager needs to understand the company's strengths and weaknesses as well as the opportunities and threats presented by the market. Once the strategic analysis is complete, the strategic manager can set clear goals for the company.
After setting clear goals, the strategic manager can formulate a strategy that aligns with the goals and maximizes the company's strengths while minimizing weaknesses. The strategy should also address the opportunities and threats present in the market.
Finally, the strategic manager must implement the strategy effectively by communicating it to all relevant stakeholders, allocating resources effectively, monitoring progress, and making adjustments as necessary. By following this process, a strategic manager can craft a successful corporate strategy that drives the company's growth and profitability.
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Prepare your own five-year career development plan about ‘What do you intend to do professionally in the next 5 years (1st year, 2nd year, 3rd year, 4th & 5th year)’? Your plan must be presented in timeline format (This can be done using MS Project and multiple other software). Your plan will also be assessed on the basis of how creative your timeline is. Simple timelines (a simple table of one made using word) will be marked down. Be very specific with your timeline, provide dates for when you will achieve different things mentioned in your timeline. For instance, if you mention in your timeline. Also include the COSTS associated with completing different activities. Your career plan must address and consider the following items:
Question. If you intend to work for an organization, what are the possible promotional opportunities for career growth and what senior-level position do you wish to obtain? How long will it take for you to obtain your next promotion within your field? What certificate will be needed for promotion? how many years of experience will be required for the promotion?
A five-year career development plan should include objectives that are specific, measurable, and attainable.
A five-year career development plan should be a guide to an individual's career progress in the next five years. Career goals for the next five years My five-year career development plan includes taking courses and obtaining certificates in project management. Obtaining a master's degree in project management is the first step in my plan.
The certification is the PMP (Project Management Professional). The PMP certificate will take six months to complete, and it costs $5000. Obtaining this certification is something I intend to do in my second year. Skills and experience needed The PMP certification is the prerequisite for the Senior Project Manager job. The Senior Project Manager position would be my dream job for the next five years.
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Gary likes to gamble. Donna offers to bet him $52 on the outcome of a boat race. If Gary's boat wins, Donna would give him $52. If Gary's boat does not win, Gary would give her $52. Gary's utility function is p₁x² + 2x², where p₁ and p2 are the probabilities of events 1 and 2 and where x₁ and X2 are his wealth if events 1 and 2 occur respectively. Gary's total wealth is currently only $80 and he believes that the probability that he will win the race is 0.2. Which of the following is correct? (please submit the number corresponding to the correct answer). 1. Taking the bet would reduce his expected utility. 2. Taking the bet would leave his expected utility unchanged. 3. Taking the bet would increase his expected utility. 4. There is not enough information to determine whether taking the bet would increase or decrease his expected utility. 5. The information given in the problem is self-contradictory.
Considering Gary's current total wealth of only $80 and his belief that the probability of winning the race is 0.2, he concludes that Option 1 is the correct choice. By taking the bet, he anticipates a reduction in his expected utility.
Donna proposes a bet of $52 on the outcome of a boat race, where if Gary's boat wins, Donna will give him $52. On the other hand, if Gary's boat does not win the race, he would be required to give Donna $52.
Gary's utility function is expressed as p₁x² + 2x², where p₁ and p₂ represent the probabilities of events 1 and 2, respectively. Additionally, x₁ and x₂ denote Gary's wealth if events 1 and 2 occur, respectively.
The expected utility can be defined as a measure of the amount of satisfaction or welfare that a person derives from consuming or achieving certain goals under conditions of uncertainty.
Gary's utility function indicates that he is risk-averse since the marginal utility of wealth is decreasing.
Using the utility function, we can determine Gary's expected utility as follows:
Gary's utility if he does not take the bet is
(0.8) [p₁(80)² + (1-p₁)(80)²] + (0.2) [p₂(80-52)² + (1-p₂)(80+52)²]
Gary's utility if he takes the bet and his boat wins is
(0.8) [p₁(80+52)² + (1-p₁)(80-52)²] + (0.2) [p₂(80+52-52)² + (1-p₂)(80+52+52)²]
Gary's utility if he takes the bet and his boat does not win is
(0.8) [p₁(80-52)² + (1-p₁)(80+52)²] + (0.2) [p₂(80-52-52)² + (1-p₂)(80-52+52)²]
Hence, choosing to accept the bet would result in a decrease in Gary's expected utility, making option 1 the correct choice.
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Imagine that a manufacturing needs to produce 240 products weekly. The company has three manufacturing processes A, B and C. Machine A can finalize a product in 24 minutes; machine B 36 minutes and assembly line C can finalize in 12 minutes. How many machine A, B and C should the company invest to minimize Muda? Design its flow!
8 work hours per day
The manufacturing needs to produce 240 products weekly.8 work hours per day. The time taken by Machine A to finalize a product = 24 minutes. The time taken by Machine B to finalize a product = 36 minutes. The time taken by Assembly Line C to finalize a product = 12 minutes.
To minimize Muda and design its flow, let us calculate the total number of minutes required to manufacture 240 products weekly. Total number of products needed to be produced per day = 240 / 5 = 48 Number of products produced in an hour = 48 / 8 = 6The total number of minutes required to finalize a product using Machine A = 24 minutes. The total number of minutes required to finalize a product using Machine B = 36 minutes. The total number of minutes required to finalize a product using Assembly Line C = 12 minutes.
Using machine A, number of products that can be produced in 1 hour = 60 / 24 = 2.5Using machine B, number of products that can be produced in 1 hour production = 60 / 36 = 1.67Using assembly line C, number of products that can be produced in 1 hour = 60 / 12 = 5Thus, to minimize Muda, the company should use Assembly line C to finalize the products. The company should invest in 5 Assembly line C to produce 240 products weekly. Design of the flow: Step 1: Manufacture the product parts in one location. Step 2: Assemble the parts in a separate location. Step 3: Use Assembly Line C to finalize the products.
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Provided a comprehensive purpose of the marketing assistant job by explaining its importance in electric bike company (and SME) accurately?
Explain how the differentiation and growth strategy of the electric bike company will affect the total reward package for marketing assistant?
The role of a marketing assistant in an electric bike company is to help in the creation, execution, and analysis of marketing campaigns and strategies. They offer support in areas such as social media management, content creation, market research, and event coordination.
The marketing assistant plays a crucial role in achieving the goals and objectives of the company's marketing plans by working closely with the marketing manager. The marketing assistant will contribute significantly to the success of the company's sales campaigns.The differentiation and growth strategy of the electric bike company will have an impact on the total reward package for the marketing assistant. A differentiation strategy is an approach where a company develops its product or services to make them unique, attractive, and stand out in the market. This strategy is essential in providing value to the customers, which leads to customer loyalty and satisfaction. For instance, if the electric bike company focuses on creating unique electric bikes, they will require marketing assistant that will understand the uniqueness of their products and create strategies that will highlight them in the market.
The differentiation strategy will mean that the company will require a marketing assistant that has the skills and creativity to drive the campaign. The total reward package for the marketing assistant will be reflective of their skills and creativity.Growth strategy, on the other hand, involves the company expanding its products or services. If the electric bike company adopts a growth strategy, it will require a marketing assistant that is knowledgeable and experienced in marketing to help implement the expansion strategies. For example, the marketing assistant may be required to identify new market segments or even new geographical locations for the electric bike company's products. The total reward package will be reflective of the marketing assistant's ability to expand the market, which is vital in driving sales and revenue for the company.In conclusion, the differentiation and growth strategy of the electric bike company will affect the total reward package for the marketing assistant. A differentiation strategy will require a marketing assistant with the skills and creativity to drive the campaign, while a growth strategy will require a marketing assistant that is knowledgeable and experienced in marketing to help implement the expansion strategies.
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During 1993, the Japanese yen appreciated by 11 percent against the dollar. In response to the lower cost of the main imported ingredients-beef, cheese, potatoes, and wheat for burger buns-McDonald's Japanese affiliate reduced the price on certain set menus. For example, a cheeseburger, soda, and small order of French fries were marked down to ¥410 from ¥530. Suppose the higher yen lowered the cost of ingredients for this meal by ¥30. a. How much of a volume increase is necessary to justify the price cut from 530 to 410 yen? Assume the previous profit margin (contribution to overhead) for this meal was ¥220. What is the implied price elasticity of demand associated with this necessary rise in demand? b. Suppose sales volume of this meal rises by 60 percent. What will be the percentage change in McDonald's dollar profit from this meal? c. What other reasons might McDonald's have had for cutting price besides raising its profits?
a. demand is approximately -2.04. b. approximately 76%. c. Other reasons for McDonald's cutting prices might include increasing market share, attracting new customers.
a. To justify the price cut from ¥530 to ¥410, McDonald's Japanese affiliate needs to increase the volume of sales for this meal. The previous profit margin for this meal was ¥220.
By subtracting the cost reduction of ¥30 from the profit margin, we can calculate that McDonald's needs a volume increase of ¥220 + ¥30 = ¥250 to maintain the same level of profit.
The implied price elasticity of demand associated with this necessary rise in demand is calculated by dividing the percentage change in quantity demanded (¥250) by the percentage change in price (¥120, which is the price difference between ¥530 and ¥410). This results in an implied price elasticity of demand of approximately -2.08.
b. If the sales volume of this meal rises by 60 percent, we can calculate the percentage change in McDonald's dollar profit. The original profit from this meal was ¥220. With a 60 percent increase in sales volume, the new profit would be ¥220 + (60% of ¥220) = ¥352. Therefore, the percentage change in McDonald's dollar profit from this meal would be (¥352 - ¥220) / ¥220 * 100 = 60 percent.
c. Besides raising its profits, McDonald's might have had other reasons for cutting the price. Some possible reasons include increasing market share by attracting more customers, responding to competition from other fast-food chains, stimulating overall sales and customer traffic, promoting other menu items, or enhancing customer loyalty. Price cuts can be strategic decisions aimed at achieving various objectives beyond immediate profit increases.
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If a hedge fund has 1 million dollars in account. The current price of stock A is 100 dollars per share and the price of stock B is 80 dollars per share. Assume the two portfolios have no dividend payment. Now the fund decides to take the following strategy: buy stock A and short stock B. For two share of stock A bought, one share of stock B will be shorted. Assume that borrowing rate is 0, the initial margin requirement for both margin trading and short sale is 50%.
(a) If the fund want to buy 200 shares of stock A and she finances 50% of this investment using borrowing. Write out the balance sheet.
(b) If the fund want to buy 200 shares of stock A, how many shares of B will be shorted? Write out the balance sheet.
(c) With the capital of 1 million dollars, how many shares can the fund buy stock A at most following the strategy (buy 2 shares of A short 1 share of B)?
The maximum number of shares of stock A the fund can buy following the strategy (buy 2 shares of A, short 1 share of B) is $500,000 / $100 = 5,000 shares.
(a) The balance sheet after buying 200 shares of stock A and financing 50% of the investment using borrowing would look as follows: Assets:
Cash: $500,000 (from the fund's own capital)
Borrowings: $100,000 (50% of the investment financed through borrowing)
Stock A: 200 shares x $100/share = $20,000
Liabilities and Equity:
Equity: $500,000 (initial capital)
Total Assets: $520,000
Total Liabilities and Equity: $520,000
(b) If the fund wants to buy 200 shares of stock A, for every two shares of stock A bought, one share of stock B will be shorted. Therefore, the number of shares of stock B that will be shorted is half the number of shares of stock A, which is 200/2 = 100 shares.
The balance sheet after buying 200 shares of stock A and shorting 100 shares of stock B would look as follows: Assets:
Cash: $500,000 (from the fund's own capital)
Borrowings: $0 (no borrowing for this scenario)
Stock A: 200 shares x $100/share = $20,000
Stock B (shorted): 100 shares x $80/share = $8,000
Liabilities and Equity:
Equity: $500,000 (initial capital)
Total Assets: $528,000
Total Liabilities and Equity: $528,000
(c) With a capital of 1 million dollars, the fund can buy stock A at most with an amount equal to the available capital after setting aside the initial margin requirement. Since the initial margin requirement is 50%, the maximum amount that can be used to buy stock A is 50% of the available capital.
Maximum amount to buy stock A = 50% x $1,000,000 = $500,000
If each share of stock A costs $100, the maximum number of shares of stock A the fund can buy following the strategy (buy 2 shares of A, short 1 share of B) is $500,000 / $100 = 5,000 shares.
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Suppose a firm produces engines using iron. The iron input will be a flow if A. it is measured in years. B. it is measured in months. C. it is measured in periods. D. it is measured in days. E. all of the above.
The iron input in the production of engines would be considered a flow if it is measured in any of the options presented: A. years, B. months, C. periods, or D. days. Therefore, the correct answer is E. all of the above.
In economics, a flow refers to a variable measured over a period of time. The input of iron in the production of engines is a flow because it is a continuous process that occurs over time. The specific measurement unit (years, months, periods, or days) determines the granularity of the flow. Whether the iron input is measured in years, months, periods, or days, it still represents a continuous flow of input over a specific time period. Hence, all the options provided (A, B, C, and D) correctly describe the iron input as a flow measurement.
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1. It appears that all of the firms involved with producing green energy devices such as solar cells, wind power and high-speed bullet trains all need government tax breaks and subsidies to survive. Billions of taxpayer dollars are given to such firms every year. Conclusion: These tax breaks and subsidies for these new technologies always guarantee more efficiency, innovation, and lower costs to consumers. TRUE or FALSE
2. The marginal product per worker (output) will always increase when there are cuts in the "explicit" costs of production, overhead, and administrative expenses. There has always been a strong correlation between these two factors. TRUE or FALSE
3. From 1995 to 2007 the U.S. federal government (CRA Law of 1995) forced banks to lower their standards on credit and income so that they could make more sub-prime mortgage loans to those who couldn’t qualify for traditional home loans. The result was that millions of people with bad credit, low income, and no savings were able to buy homes. Conclusion: This "easy financing" helped to push up home prices during this time. T/F
4. Which formula below best describes human behavior? Multiple Choice
a. E > 1
b. MB = MC
c. MC = MR
d. E = 1
1. It appears that all of the firms involved with producing green energy devices such as solar cells, wind power and high-speed bullet trains all need government tax breaks and subsidies to survive.
Billions of taxpayer dollars are given to such firms every year. Conclusion: These tax breaks and subsidies for these new technologies always guarantee more efficiency, innovation, and lower costs to consumers. FALSE2. The marginal product per worker (output) will always increase when there are cuts in the "explicit" costs of production, overhead, and administrative expenses. There has always been a strong correlation between these two factors. FALSE3. From 1995 to 2007 the U.S. federal government (CRA Law of 1995) forced banks to lower their standards on credit and income so that they could make more sub-prime mortgage loans to those who couldn’t qualify for traditional home loans. The result was that millions of people with bad credit, low income, and no savings were able to buy homes. Conclusion: This "easy financing" helped to push up home prices during this time. TRUE4. Which formula below best describes human behavior? Multiple Choice.a. E > 1b. MB = MCc. MC = MRd. E = 1The correct answer is B. MB = MCExplanation:MB = MC is the formula that best describes human behavior. The concept of marginal benefit (MB) is used in economics to describe the additional benefit of consuming one more unit of a good or service. Marginal Cost (MC) is the cost of producing one more unit of a good or service. In order to maximize utility or profit, people usually choose an output level where MB = MC.
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1. It appears that all of the firms involved with producing green energy devices such as solar cells, wind power. And high-speed bullet trains all need government tax breaks and subsidies to survive.
Billions of taxpayer dollars are given to such firms every year. Conclusion: These tax breaks and subsidies for these new technologies always guarantee more efficiency, innovation, and lower costs to consumers. This statement is true.
2. The marginal product per worker (output) will always increase when there are cuts in the "explicit" costs of production, overhead, and administrative expenses. There has always been a strong correlation between these two factors. This statement is false.
3. From 1995 to 2007, the U.S. federal government (CRA Law of 1995) forced banks to lower their standards on credit and income so that they could make more sub-prime mortgage loans to those who couldn’t qualify for traditional home loans. The result was that millions of people with bad credit, low income, and no savings were able to buy homes. Conclusion: This "easy financing" helped to push up home prices during this time. This statement is true.
4. The formula that best describes human behavior is option (a) E > 1. This means that when there is an economic incentive, people will act on it. This formula is also known as the profit maximization formula.
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Based on what you have studied in decision analysis theory, solve the following problem: Fatima is considering the possibility of opening a small dress shop the Diplomatic area, a few blocks from the university. She has located a good place to attract students. Her options are to open a small shop, a medium-sized shop, or no shop at all. The market for a dress shop can be good average, or bad. The probabilities for these three possibilities are 0.2 for a good market, 0.5 for an average market, and 0.3 for a bad market. The net profit or loss for the medium-sized and small shops for the various market conditions are given in the following table. Alternatives Small shop State of Nature Good market ($) 75 000 Average market ($) 25 000 Bad market ($) 40 000 100 0000 35 000 60 000 Medium-sized shop No shop 0 0 0 From the table above solve the following questions: a) What is the maxi-max decision Optimistic)? b) What is the maxi-min decision (pessimistic)? c) Determine the EMV criterion if the decision-making environment is under risk.
The maxi-max decision is to open a medium-sized shop, as it has the highest potential payoff of 100,000.
The maxi-min decision is to open a small shop, as it has the highest assured payoff of 25,000.
The decision would be to open a small shop, as it has the highest expected value of 59,000.
a) The maxi-max decision (optimistic) is to choose the option with the highest possible payoff regardless of the probabilities. In this case, the maximum payoff for each option is:
Small shop: 75,000 (good market)
Medium-sized shop: 100,000 (average market)
No shop: 0 (bad market)
Therefore, the maxi-max decision is to open a medium-sized shop, as it has the highest potential payoff of 100,000.
b) The maxi-min decision (pessimistic) is to choose the option with the highest assured payoff, considering the worst-case scenario. In this case, the minimum payoff for each option is:
Small shop: 25,000 (average market)
Medium-sized shop: 35,000 (bad market)
No shop: 0 (bad market)
Therefore, the maxi-min decision is to open a small shop, as it has the highest assured payoff of 25,000.
c) The EMV (Expected Monetary Value) criterion is used when the decision-making environment is under risk. It involves calculating the expected value for each option by multiplying the payoffs by their corresponding probabilities and then selecting the option with the highest expected value.
For the small shop:
EMV = (0.2 * 75,000) + (0.5 * 25,000) + (0.3 * 40,000) = 59,000
For the medium-sized shop:
EMV = (0.2 * 100,000) + (0.5 * 35,000) + (0.3 * 60,000) = 55,500
For the no shop:
EMV = 0
Therefore, based on the EMV criterion, the decision would be to open a small shop, as it has the highest expected value of 59,000.
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