Economics

You are considering investing in two common stocks holding them in a two-stock p

You are considering investing in two common stocks holding them in a two-stock portfolio. Stock A has an expected return of 10% and a standard deviation of 11.2%. Stock B has an e…

You are considering opening a new plant. The plant will cost $ 95.5 million up f

You are considering opening a new plant. The plant will cost $ 95.5 million up front and will take one year to build. After that it is expected to produce profits of $ 28.4 millio…

You are considering purchasing a consol that promises annual payments of $4. a.

You are considering purchasing a consol that promises annual payments of $4. a. If the current interest rate is 2.5 percent, what is the price of the consol? Instructions: Round y…

You are considering purchasing stock. The stock is expected to pay a dividend of

You are considering purchasing stock. The stock is expected to pay a dividend of $52 per share. The consensus of investors is that these dividends will increase at a rate of 5 per…

You are considering the following two mutually exclusive projects. The required

You are considering the following two mutually exclusive projects. The required return on each project is 14 percent. Which project should you accept and what is the best reason f…

You are considering the purchase of a new machine for fabricating metal products

You are considering the purchase of a new machine for fabricating metal products. You must decide whether to pay the $10,000 purchase price in cash, or to pay $4,000 down and borr…

You are considering the purchase of a new machine for fabricating metal products

You are considering the purchase of a new machine for fabricating metal products. You must decide whether to pay the $10,000 purchase price in cash, or to pay $4,000 down and borr…

You are considering two alternative plant layouts, A1 and A2, to improve its cur

You are considering two alternative plant layouts, A1 and A2, to improve its current layout. The cash flows are shown below. The first costs represent the expenses of rearranging …

You are considering two equally risky annuities, each of which pays $5,000 per y

You are considering two equally risky annuities, each of which pays $5,000 per year for 10 years. Investment ORD is an ordinary (or deferred) annuity, while Investment DUE is an a…

You are considering two independent projects. Project A has an initial cost of $

You are considering two independent projects. Project A has an initial cost of $125,000 and cash inflows of $46,000, $79,000, and $51,000 for years 1 to 3, respectively. Project B…

You are considering two investment options. In option A, you have to invest $4,5

You are considering two investment options. In option A, you have to invest $4,500 now and $800 three years from now. In option B, you have to invest $4,000 now, $1,300 a year fro…

You are considering two investment options. In option A, you have to invest S4,0

You are considering two investment options. In option A, you have to invest S4,000 now and $1,000 three years from now. In option B, you have to invest S3,800 now, $1,900 a year f…

You are considering two projects. Project 1 currently costs $12 million, which i

You are considering two projects. Project 1 currently costs $12 million, which is to be paid this year; the returns are $8 million after year 1 and $7 million after year 2. Projec…

You are considering two projects. Project 1 currently costs $12 million, which i

You are considering two projects. Project 1 currently costs $12 million, which is to be paid this year; the returns are $8 million after year 1 and $7 million after year 2. Projec…

You are considering whether to enter a holiday lights display contest that pays

You are considering whether to enter a holiday lights display contest that pays $1,000 to the winner. State whether each of the following constitutes private costs, private benefi…

You are contemplating an investment in an energy savings project for your wareho

You are contemplating an investment in an energy savings project for your warehouse. The initial cost for this is $50,000. It is expected that the device will save 1,000 gallons i…

You are currently operating in the short run producing 2,000 units of output per

You are currently operating in the short run producing 2,000 units of output per month. When you started in business 10 years ago, you bought machinery and designed your operation…

You are deciding what to do for a weekend. You have narrowed down your options t

You are deciding what to do for a weekend. You have narrowed down your options to two choices. One choice is to go to the football game on Saturday. You do not currently have a ti…

You are doing field work in India. You go into rural villages and you interview

You are doing field work in India. You go into rural villages and you interview a large number of families who are farmers. For each family, you record the following information: …

You are doing some long-range retirement planning On the day you retire (23 year

You are doing some long-range retirement planning On the day you retire (23 years from now) you want to be able to withdraw $200,000. Then, you want to withdraw the following amou…

You are doing some long-range retirement planning. On the day you retire (23 yea

You are doing some long-range retirement planning. On the day you retire (23 years from now) you want to be able to withdraw $200,000. Then, you want to withdraw the following amo…

You are economic consultant for Jack, who farms raw cotton in a perfectly compet

You are economic consultant for Jack, who farms raw cotton in a perfectly competitive market. One day he gives you the following data at his present level of production: Output = …

You are employed by an organization that relies on government grants for funding

You are employed by an organization that relies on government grants for funding. How would you answer the following questions? Explain the advantages and disadvantages to writing…

You are employed in a medical office. Medicare payments to physicians who work i

You are employed in a medical office. Medicare payments to physicians who work in the clinic have been cut, so policy has changed to “no new Medicare patients will be accepted”. 1…

You are estimating a cross-section regression for a sample of 100 cities in the

You are estimating a cross-section regression for a sample of 100 cities in the US in which you hope to explain expenditure on education as a function of the median income in the …

You are evaluating a project for The Ultimate recreational tennis racket, guaran

You are evaluating a project for The Ultimate recreational tennis racket, guaranteed to correct that wimpy backhand. You estimate the sales price of The Ultimate to be $340 per un…

You are evaluating a project for your company. You estimate the sales price to b

You are evaluating a project for your company. You estimate the sales price to be $620 per unit and sales volume to be 3,200 units in year 1; 4,200 units in year 2; and 2,700 unit…

You are evaluating a project that costs $60,000 today. The project has an inflow

You are evaluating a project that costs $60,000 today. The project has an inflow of $130,000 in one year and an outflow of $50,000 in two years. What are the IRRs for the project?…

You are evaluating investing in a cognitive training company. For this reason, y

You are evaluating investing in a cognitive training company. For this reason, you want to determine whether users who complete at least 75% of the recommended daily training for …

You are evaluating the balance sheet for PattyCake’s Corporation. From the balan

You are evaluating the balance sheet for PattyCake’s Corporation. From the balance sheet you find the following balances: cash and marketable securities = $330,000; accounts recei…

You are evaluating the profitability of a process and have the following informa

You are evaluating the profitability of a process and have the following information. The criterion for profitability is a 15% rate of return over ten operating years. The equipme…

You are evaluating two different silicon milling machines: A. The Techron I cost

You are evaluating two different silicon milling machines: A. The Techron I costs $215,000, has a three-year life, and a pre-tax operating costs of $35,000 per year. B. The Techro…

You are evaluating two different silicon wafer milling machines. The Techron I c

You are evaluating two different silicon wafer milling machines. The Techron I costs $222,000, has a three-year life, and has pretax operating costs of $57,000 per year. The Techr…

You are faced with a future obligation... Thirteen years from now your child wil

You are faced with a future obligation... Thirteen years from now your child will enter college and you have promised to pay for their tuition. If you happen to know that in thirt…

You are financial analyst for a company that is considering supplementing their

You are financial analyst for a company that is considering supplementing their business of workout equipment production and sales with a new product line of supplements. This is …

You are given a free ticket to see the Spartans mens basketball team play for th

You are given a free ticket to see the Spartans mens basketball team play for the league championship. The NY knicks are playing on the same night and is your next-best alternativ…

You are given a free ticket to see the Trojans mens basketball team play for the

You are given a free ticket to see the Trojans mens basketball team play for the league championship. The LA Lakers are playing on the same night and is your next-best alternative…

You are given a market data that says when the price of a bottle of aspirin is $

You are given a market data that says when the price of a bottle of aspirin is $10, the quantity demanded is 60 bottles. When the price is $8, the quantity demanded is 80 bottles.…

You are given data in the table below: Prices are 30,24,18,12 and 6. The quantit

You are given data in the table below: Prices are 30,24,18,12 and 6. The quantity is 500 for each price respectively.Fixed cost is made up of two portions one being $ 8000 and the…

You are given the cash flow table below. Compute and fill in the present values

You are given the cash flow table below. Compute and fill in the present values of net revenues for each year using the two different interest rates and then compute the net prese…

You are given the following Channel/Corridor model: Federal funds rate, n S, 0.2

You are given the following Channel/Corridor model: Federal funds rate, n S, 0.25% R2 R Reserves, R 18. The initial equilibrium is at D- S1. Looking at the graph, the Fed has: a. …

You are given the following budget data for a country that has both a central go

You are given the following budget data for a country that has both a central government and local governments. Central tax receipts of $450; local tax receipts of $100; central t…