How does the introduction of cognition into a consumer's choice between healthy and unhealthy food affect marginal utility per dollar and the quantity of healthy and unhealthy food consumed? Assume utility is maximized. 46) _____________
47) When an electronics company advertises in the local newspaper a 10% discount coupon, is this an example of price discrimination? Why or why not? 47) _____________
48) Describe how if a price-fixing game is repeated over and over, the cooperative outcome might be attained. 48) _____________
49) Explain what would happen to the equilibrium price and quantity of oranges if the supply of oranges increased while the demand for oranges decreased. 49) _____________
50) Will a price ceiling always result in a reduction in efficiency? 50) _____________
As vice president of sales for a rapidly growing company, you are grappling with the question of expanding the size of your direct sales force (from its current level of 60 national salespeople). You are considering hiring from 5 to 10 additional personnel. How would you estimate the additional dollar cost of each additional salesperson? Based on your company
In 2002, President George W. Bush imposed tariffs on certain types of imported steel. He argued that foreign steel producers were dumping their steel on the U.S. market at low prices. The foreign steel producers were able to sell steel cheaply because they received subsidies from their governments. The Bush administration argued that the influx of steel was disrupting the U.S. economy, harming the domestic steel industry, and causing unemployment among U.S. steelworkers. _____ economists are most likely to be sympathetic to these claims because they _____ government intervention in the economy.
A. Keynesian; favour
B. Classical; favour
C. Keynesian; oppose
D. Classical; oppose
The market for health care services can be examined using the tools of supply and demand. In this market, the quantity variable is the hours of health care services. Consumers demand health care services while doctors (or others) supply health care services. We will assume health care services are all of the same quality (so 1 hour of heath care service A is the same as 1 hour of health care service B). The market price is the price per hour of health care services (dollars per hour). Given this, suppose a law mandates that doctors cannot charge a price higher than Pmax, where this maximum price is set below the free-market equilibrium price in this market. What will be the effect of this law on the quantity demanded, quantity supplied and the price paid for health care services? Who benefits and who loses from imposing this maximum price that sellers can charge/receive for health care services? (Note: given the price actually paid by consumers for health care must equate supply and demand. This price can include both monetary forms of payment and non-monetary forms of payment; in this example, what forms might such non-monetary payments take? That is if health care must be "rationed" among consumers).
Suppose you have 2 cross-sectional data sets on car prices for the years 2002 and 2004 (one for each of 2002 and 2004) covering the time both before and after the U.S. invasion of Iraq in 2003. You have 90 observations in your data set for 2002 and 120 for 2004. You have decided to pool your 2 cross-sectional data sets together to form one pooled cross-sectional data set. After pooling, you now have total observations in your new pooled cross-sectional data set. What are the primary advantages of pooled cross-sectional data over ordinary cross-sectional data? Check all that apply. Pooling cross sections allows you to form a panel data set. Pooling cross sections allows for a larger sample size. Pooling cross sections allows you to observe changes in key relationships over time. Pooling cross sections allows you to ignore the differences in data over time, since you are left with just one cross-sectional data set.
Greenaqua Corp. is the only supplier of bottled drinking water in the country Lithuania. Due to the profits the firm enjoys, new corporations are interested in entering the market. If a few more companies producing their own line of bottled drinking water enter the market, which of the following statements will be true about Greenaqua Corp.?
|The elasticity of demand for Greenaqua Corp.'s product is likely to decrease.|
|The elasticity of demand for Greenaqua Corp.'s product is likely to increase.|
|The profit Greenaqua Corp. earns on their line of bottled drinking water is likely to increase.|
|The elasticity of demand for Greenaqua Corp.'s product is likely to remain the same.|
KBCS is a diversified company producing and distributing different products. Product AB division within the company handles a specific product and would like to earn a long-run rate of return of 25%. Product X division will charge its unit selling price as necessary to provide this return. The following data are available on the division and its products: Variable Cost per unit ₹ 300 Total annual fixed costs ₹ 14,00,000 Long run normal demand 20,000 units each year Average operating assets owned by the division ₹ 24,00,000 Required: (i) Compute the per unit selling price that will provide the desired rate of return (ii) Assume that actual sales fluctuate from 16000 units to 24000 units. Compute the margin, turnover and ROI that would be realised on sales at 16000 units, 20,000 units and 24000 units level of activity (use the selling price computed in part (i) for your computations.
JPMorgan Chase Bank is short cash reserves in the amount of $225 million conditions expected to last for the next five business days and is weighing
(a) securing a loan in the domestic federal funds market, where the interest rate prevailing today is 5.45 percent;
(b) issuing seven-day domestic negotiable CDs at a current market rate of 5.50 percent; or
(c) tapping its foreign branch offices for 30-day Eurodollars at a market rate of 5.58 percent.
The estimated noninterest cost of all these various funding sources is approximately the same, except that the domestic CDs currently carry an annual FDIC insurance
fee of $0.04 per every $100 in deposits received from the public. Which source of funds would you recommend the bank make use of?
Decide if you agree or disagree with each of the following statements. Give abrief explanation of your decision:(A)Like observations in a cross-sectional data set, it is usually okay to assume that observationsfrom time-series data are independently distributed.(B)If the rst three Gauss-Markov assumptions are satis ed, OLS is unbiased when used on time-series data.(C)A trending variable cannot be used as the dependent variable in multiple linear regression anal-ysis.(D)Seasonality is not an issue when using annual time series observations
The comparative statements of financial position for Amaral Reis Company SA as of December 31 are presented as follows.
AMARAL REIS COMPANY SA
Comparative Statements of Financial Position
Assets 2017 2016
Land R$145,000 R$130,000
Equipment 228,000 155,000
Accumulated depreciation—equipment (45,000) (35,000)
Buildings 200,000 200,000
Accumulated depreciation—buildings (60,000) (40,000)
Prepaid expenses 18,280 21,000
Inventory 154,550 142,000
Accounts receivable 46,000 62,000
Cash 62,520 45,000
Total R$749,350 R$680,000
Equity and Liabilities
Share capital—ordinary, R$1 par R$195,000 R$160,000
Retained earnings 208,000 180,000
Bonds payable 300,000 300,000
Accounts payable 46,350 40,000
Total R$749,350 R$680,000
• 1.Operating expenses include depreciation expense of R$40,000.
• 2.Land was sold for cash at a book value of R$20,000.
• 3.Cash dividends of R$20,000 were paid.
• 4.Net income for 2017 was $54,000.
• 5.Equipment was purchased for R$95,000 cash. In addition, equipment costing R$22,000 with a book value of R$12,000 was sold for R$6,000 cash.
• 6. Issued 35,000 shares of R$1 par value ordinary shares in exchange for land with a fair value of R$35,000.
Prepare a statement of cash flows for the year ended December 31, 2017, using the indirect method.
Cash from operations R$106,520
The trial balance of the Mukhtar Company shown below does not balance.
September 30, 2019
Cash $ 3,850
Accounts Receivable $ 2,750
Prepaid Insurance 700
Accounts Payable 4,500
Unearned Service Revenue 560
Common Stock 11,700
Service Revenue 8,690
Salaries and Wages Expense 4,200
Advertising Expense 1,100
Utilities Expense 800
Your review of the ledger reveals that each account has a normal balance. You also discover the following errors.
- The totals of the debit sides of Prepaid Insurance, Accounts Payable, and Utilities Expense were each understated $100.
- Transposition errors were made in Accounts Receivable and Service Revenue. Based on postings made, the correct balances were $2,570 and $8,960, respectively.
- A debit posting to Salaries and Wages Expense of $200 was omitted.
- A $1,000 cash dividend was debited to Common Stock for $1,000 and credited to Cash for $1,000.
- A $520 purchase of supplies on account was debited to Equipment for $520 and credited to Cash for $520.
- A cash payment of $450 for advertising was debited to Advertising Expense for $45 and credited to Cash for $45.
- A collection from a customer for $420 was debited to Cash for $420 and credited to Accounts Payable for $420.
- Prepare a correct trial balance. Note that the chart of accounts includes the following:
Dividends and Supplies.
- Make T accounts and post the corrections in these accounts to reach the corrected trial balance
This year, the annual tuition at a public four-year university is $5,290. Next year when Jarrod attends his first year, the tuition is expected to increase 4.5%. Jarrod has 1 year to save the amount of money equal to the tuition for his first year. What is the approximate minimum amount Jarrod should save monthly? $441 $461 $553 $639
The following data relates to the market value of economic transactions for the three main sectors of your countrys economy. SECTOR VALUE OF OUTPUT PURCHASES FROM OTHER FIRMS Agriculture 300 160 Manufacturing 200 150 Services 150 120 Required: (i) Compute the gross domestic product (GDP) and explain the method used and why. (2 Marks) (ii) Given that: depreciation = 90, indirect taxes = 70, subsidies = 30, payments to factors of production from abroad = 20, payments to foreign factors = 40. Compute: 1) Gross national product (GNP) at market prices. (1 Mark) 2) Net national product (NNP) at market prices. (1 Mark) 3) Net national product (NNP) at factor cost. (1 Mark) 4) Net domestic product (NDP) at factor cost (1 Mark)
In this second section, you are required to read the short case study and answer the required questions:
In the world of cutting-edge fashion, instinct and marketing knowledge are prerequisites to success. Fanny Elly had both. During 2018, his international formal-ware company, Kencan, rocketed to $300 million in sales after 10 years in business. His fashion line covered middle-aged women from head to toe with hats, dresses, head scarfs and etc. In Kucing, there was a Kencan shop every five or six blocks, each featuring a unique colour.
Kencan had made it. The conservative company’s historical analyst speculated that Encore could not keep up the pace. They warned that competition is intense in the fashion industry and that the firm would experience little or no growth in the future. They estimated that stockholders also should expect no growth in the future dividends.
However, Fanny Elly felt that the company could maintain a constant growth rate in dividends per share of 6% in the future, or possibly 8% for the next 2 years and 6% thereafter. Elly based his estimates on an established long-term expansion plan into the Brunei market. Venturing into these markets was expected to cause the risk of the firm, as measured by the risk premium on its stock, to increase immediately from 8.8% to 10%. Currently, the risk-free rate is 6%.
In preparing the long-term financial plan, Kencan’s chief financial officer has assigned a junior financial analyst, Manny Susan, to evaluate the firm’s current stock price. He has asked Manny to consider the conservative analysis and the aggressive predictions of the company founder, Fanny Elly.
Manny has gathered their 2018 financial data to aid his analysis:
Additionally, Manny has gathered that Kencan holds inventory 70 days, pays its suppliers in 40 days, and collects its receivables in 10 days. The firm has a current annual outlay of RM1,550,000 on operating cycle investments. Kencan currently pays 12 percent for its negotiated financing. Kencan uses 750 units of a product per year on a continuous basis. The product has carrying costs of RM45 per unit per year and order costs of RM280 per order. It takes 15 days to receive a shipment after an order is placed and the firm requires a safety stock of 4 days’ usage in inventory.
Along with that Kencan has been presented with an investment opportunity into Europe which will yield cash flows of RM34,000 per year starting from 2019, Years 1 through 4, RM35,000 per year in Years 5 through 9, and RM45,000 in Year 10. This investment will cost the firm RM130,000 today, and the firm's cost of capital is 9.5 percent with the assumption that the cash flows occur evenly during the year.
a) Calculate Kencan’s current book value per share (2 marks)
b) Calculate Kencan’s current P/E ratio? (2 marks)
c) Calculate the current required return for Kencan stock? (5 marks)
d) Calculate the new require return for Kencan stock assuming that they expand into the Brunei market as planned? (5 marks)
e) If the security analysts are correct and there is no growth in future dividends, what will be the value per share of Kencan’s stock? (Note: Use the new required return on the company’s stock here.) (5 marks)
f) If Fanny Elly’s predictions are correct, what will the value per share of Kencan stock if the firm maintains a constant annual 6% growth rate in future dividends? (Note: Continue to use the new required return here.) (5 marks)
g) If Fanny Elly’s predictions are correct, what will the value per share of Kencan stock if the firm maintains a constant annual 8% growth rate in future dividends per share over the next 2 years and 6% thereafter? (5 marks)
h) Compare the current (2018) price of the stock and the stock values found in parts a, e, f and g. Discuss why these values differ. Which valuation method do you believe most clearly represents the true value of the Kencan stock? (7 marks)
Over the past few decades, East Asian economies have increased their share of world GDP. Similarly, intra–East Asian trade—that is, trade among East Asian nations—has grown as a share of world trade. More than that, East Asian countries do an increasing share of their trade with each other. Explain why, using the gravity model?
You are working on a bid to build two city parks a year for the next three years. This project requires the purchase of $185,000 of equipment that will be depreciated using straight-line depreciation to a zero book value over the 3-year project life. The equipment can be sold at the end of the project for $34,000. You will also need $20,000 in net working capital for the duration of the project. The fixed costs will be $18,000 a year and the variable costs will be $168,000 per park. Your required rate of return is 15 percent and your tax rate is 34 percent. What is the minimal amount you should bid per park? (Round your answer to the nearest $100)
Michael Trading is a stationery store and owned by Sharizan. Below are the transactions of Michael
Trading for the month of November 2019.
November 2019 Transactions
1 Started the business with RM20,000 cash.
3 Purchased Fujixerox printer RM700 by cheque for office use.
13 Sold goods on credit to Rachel RM500.
14 Banked in cash RM3,000.
17 Paid rental of premises amounting to RM400 by cash.
21 Sharizan took RM800 from the bank and RM200 goods for
24 Sales returned by Rachel amounted to RM200.
26 The business bought a motor vehicle for RM4,500 cash.
28 Paid utility bills and wages of RM100 and RM500 cash
Identify the effects (increase or decrease) on assets, liabilities, owner’s equity, revenues or expenses for
the transactions dated from 1 November 2019 to 24 November 2019 and show the accounts to be
debited and credited for each of the transactions given below:
Kraft budgeted sale are $10000 per month and let’s assume the sales stay the same every month. Its customers pay Kraft based on the following pattern 20% will pay in the month of sales and take a 3% discount. The remining customers pay in the month following the sale and take a 1% discount ( even though they shouldn’t) Kraft has no bad debt on its collection. Kraft inventory purchase every month is based on 30% of next month’s project sale pays for the inventor purchase immediately. Other payment’s which include salaries, rent and supplies are always 45% of sales for the month Construct a cash budget for a typical month (Hint ignore the first month, what is monthly cash budget look like for month 2 or month3). What is the average cash gain or loss during the month?
Your organization is a floral supply company with employees in the following jurisdictions: Manitoba Prince Edward Island Yukon The organization is planning to implement a company-wide policy with respect to vacation leave and vacation pay that provides the same benefits to all employees, regardless of their province of employment. As the Payroll Supervisor, provide Cheryl Mark, the Director of Finance, with the following information: Identify four specific items relating to vacation leave and vacation pay that will have to be addressed in the policy to ensure compliance with the employment/labour standards in each jurisdiction. Research the details for each of the items you have identified using the course material and the employment/labour standards website for each jurisdiction. Using the results of your research, provide your recommendations to Ms. Mark on how to address each of these items in the policy to provide the employees with the best benefit, while keeping the cost to the organization at a minimum. Explain your reasoning.
You are considering the purchase of Zee Company stock. You anticipate that the company will pay dividends of RM3.50 per share next year and RM4.00 per share the following year. You believe that you can sell the stock for RM20.00 per share two years from now. If your required rate of return is 10 percent, what is the maximum price that you would pay for a share of Zee Company stock
Which of the following transactions best represents the government playing the role of consumer of a good or service? The local government collects property taxes in order to provide for local schools. The state government hires surveyors to map out the route for a new highway. The federal government designates 10,000 square acres of wilderness as a national park. The federal government subsidizes research activities at a state university.
An economy begins in long-run equilibrium, and then a change in government
regulations allows banks to start paying interest on checking accounts. Recall that the
money stock is the sum of currency and demand deposits, including checking accounts, so
this regulatory change makes holding money more attractive.
a. How does this change affect the demand for money?
b. What happens to the velocity of money?
c. If the Fed keeps the money supply constant, what will happen to output and prices in the
short run and in the long run?
d. If the goal of the Fed is to stabilize the price level, should the Fed keep the money supply
constant in response to this regulatory change? If not, what should it do? Why?
e. If the goal of the Fed is to stabilize output, how would your answer to part (d) change?
A study by B.B. Gibson estimated the price and income elasticities of demand for six types of public goods for the U.S. economy. The estimates are given in the following table. Public Goods Aid to needy people Pollution Control Colleges and Universities Elementary School Education Parks and Recreational Areas Highway Construction and Maintenance Price Elasticity -0.83 -0.99 -0.87 -1.16 -1.02 -1.09 Income Elasticity 0.26 0.77 0.92 1.14 1.06 0.99 (a) Do these public goods confirm to the law of demand? (5) (b) For which public goods is the demand price elastic? (5) Page 2 of 3 (c) What would the impact on elementary school education and College and University education of a 20 percent increase in income, keeping other things constant? (5) (d) If the cost of pollution control came down by 10 percent along with a simultaneous increase in income of 20 percent, what would be the change in demand for pollution control? (5)
You are an employee of University Consultants, Ltd and have been given the following information. You are to present an investment analysis of a new small income-producing property for sale to a potential inventor. The asking price for the property is $8.5 million. You determine that the building was worth $7.225 million and could be depreciated over 39 years (use 1/39 per year). NOIs are estimated to be $901,375 for year 1, $900,681 for year 2, $899,962 for year 3, $943,700 for year 4, $961,855 for year 5 and expected to increase by 3.16% thereafter. A fully amortizing 70 percent loan can be obtained at 10 percent interest for 20 years (total annual payments will be monthly payments *12). The property is expected to be sold for $9,360,805 after 5 years. Capital gains from price appreciation will be taxed at 15 percent and depreciation recapture will be taxed at 25 percent. Your ordinary income will be taxed at 35 percent. Assume that there is no selling cost and equity discount rate is 13%.
What is mortgage loan balance by the end of year 5?
|(a)||A sales journal will be used for:|
|(b)||A single-column purchases journal will be used for:|
||Purchases on Account
|(c)||A multi-column purchases journal will be used for:|
||Supplies Purchased on Account
||Equipment Purchased on Account
|(d)||A cash payments journal will be used for:|
|Payments to Creditors
||Owner Cash Investment
|(e)||A cash receipts journal will be used for:|
|Owner Cash Withdrawals
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2019 R
Cash flows from operating activities
2 540 000
Profit before interest and tax
7 700 000
Non-cash flow adjustments
Profit before working capital changes
Working capital changes
8 400 000
Decrease in inventory
Decrease in receivables
Increase in payables
Cash generated from operations
9 090 000
(4 900 000)
Company tax paid
(1 500 000)
Cash flow from investing activities
(4 200 000)
Land, buildings and equipment purchased
(4 200 000)
Cash flow from financing activities
1 100 000
Increase in long-term borrowings
1 100 000
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
- Why was depreciation included in computing the cash flow from operating activities? (2 marks)
- Calculate the cash balance on 31 December 2019 if there was a bank overdraft of R460 000 on 31 December 2020. (2 marks)
- Based on the cash flow information above, how does the company appear to be performing? Explain by referring to at least five items in the cash flow statement. (10 marks)
- Long term loans were increased during 2020. Was this the most appropriate way of financing the purchase of assets? (3 marks)
1.5 What cash receipts increase cash but not profits? (3 marks)
Green Leaf Company had the following information available on December 31:
“Japan’s experience makes the infant industry case for protection better than any theory. In the early 1950s Japan was a poor nation that survived by exporting textiles and toys. The Japanese government protected what at first were inefficient, high-cost steel and automobile industries, and those industries came to dominate world markets.” Discuss critically.
The Tricities Bus Company is a regional bus line providing transit service between Coquitlam, Port Moody and Port Coquitlam. An analysis of the monthly demand for transit reveals the following demand equation: Qx = 1,750 - 40Px - 15PC + 30BAI - 1,700S where Qx is quantity measured by the number of passengers per month, Px is the price, PC is a price index for connecting bus routes, BAI is a business activity index and S, a binary or dummy variable, equals 1 in summer months, zero otherwise. Currently Px = 50, PC = 120, and BAI = 175. (a) Calculate the quantity demanded during the winter month of January if all price-related variables are as specified above. (b) Calculate the price elasticity of demand in winter for transit services and the cross-price elasticity of demand for transit with respect to the level of business activity.5 (c) What price would you recommend the Tricities Bus company charge in the winter months if they were primarily interested in maximizing revenue? (d) Calculate the quantity demanded during the summer month of August if all price-related variables are as specified above. (e) Calculate the price elasticity of demand in summer for transit services and the cross-price elasticity of demand for transit with respect to the level of business activity. (f) What price would you recommend the Tricities Bus company charge in the summer months if they were primarily interested in maximizing revenue?
After he gets out of jail, Dan goes and talks to Mica (no relation to anyone we know) about grading problem sets. He ends up with a serious head wound and rushes to the Sussex County hospital. He has no money and no insurance, but state law requires that he be treated. No other patient is there when he enters, and no one arrives before he leaves. The physicians and staff are salaried and are there no matter how many people show up. The daily payroll for the emergency room is $72,000, and Dan is there for about an hour. They patch him up real well and use bandages, medicines, and painkillers that cost the hospital about $30. What was the cost to the Sussex County hospital of Dan's visit?