University of Westminster BEQM601 Economic Theory and Policy Solution guide for problem set 3A Problem 1 (a) Because Holly spends 40% of her income for good 1 no matter what happens to her income or to the prices‚ her optimal expenditure share is fixed. So for Holly [pic]. For Holly‚ the optimal demands are therefore: [pic]. For Holly‚ optimal demand for good 1 depends on the income and the price of good 1‚ but does not depend on the price of good 2. Optimal demand for good 2 depends
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Instructor’s Manual to accompany Krugman & Obstfeld International Economics: Theory and Policy Sixth Edition Linda S. Goldberg Federal Reserve Bank of New York Michael W. Klein Tufts University The Fletcher School of Law and Diplomacy Jay C. Shambaugh Dartmouth College The views presented in this book are those of the authors and need not reflect the views of the Federal Reserve Bank of New York or the Federal Reserve System. Contents Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter
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the carrying value of an asset is not recoverable. Per the same standards‚ carrying value is not recoverable “if it exceeds the expected future cash flows to be derived from the asset on an undiscounted basis” (FASB‚ ASC 360-10). In the Property Solutions Inc. case‚ the carrying value of the building on 10/1/2017 was $1‚650‚000 and the expected future cash flows are $1‚214‚940. Per the definition of impairment loss stated above‚ the asset is impaired. In calculating the loss‚ we must compare the carrying
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strategies. The first current strategies that the Health Care Office Solutions‚ Inc (HCOS) is using is the niche (or focus) strategy by the Porter’s Typology. According to the Mark W. Johnson and Greg W. Marshall (2011)‚ the service of particular target market‚ with each functional policy developed with this target market in mind. HCOS changed their name from the Printing Solution Incorporated to the Health Care Office Solutions‚ Inc (HCOS) because they realized that many of their best clients were
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Q1 Answer: The numbers in the Financial Statement were different under the two methods because under the non-GAAP accounting method apple gave the revenue numbers without the use of subscription accounting‚ which recognized the revenue at the point of sale. Moreover the non-GAAP numbers did not adjust the estimated costs associated with its plan to provide new features and software upgrades to iPhone buyers free of charge and these figures were not prepared under a comprehensive set of rules or principles
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BACKGROUND JetBlue envision to create high quality airline at low-fares‚ to accomplish this JetBlue is developing high technology (Paperless) to meet efficiency but also focused on service improvisation. Profile • Founder • Focus Area : David Neeleman : New York‚ Florida & California • Operations : February 11‚ 2000 • First Flight : Between New York’s JFK &Fort Lauderdale • Initial Capital : $130 million Mission Core Values Safety Caring Integrity Fun Passion
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respectively. Her monthly payment on an automobile loan is $375. What is Louise’s debt payments-to-income ratio? Is Louise living within her means? (LO 5.3) Louise’s Gross Income = $3‚000 Less: Income taxes = -700 Less: Social Security Tax = -250 Less: IRA contribution = -100 Net take-home pay = $1‚950 Her monthly payments on VISA‚ MasterCard‚ and a car loan add up to $500 per month. Louise’s debt payments to income ratio is 500 to 1‚950‚ or 25.6 percent. This ratio exceeds
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Question 1 We believe that Ms Stark should not revise her recommendation regarding FPL. The HOLD recommendation seems to be the most appropriate. Our judgement assumes a dividend cut from FPL. However‚ this dividend cut would be a precise strategic choice rather than one dictated by financing difficulties. Specifically‚ the dividend cut will raise future growth‚ with little effect on the stock price. By cutting dividends‚ FPL can react better to future threats. After an initial panic selling triggered
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Cost of Debt and Cost of Equity: Cost of Debt is the interest rate and the Cost of Equity is the expected rate of return demanded by investors in the firm’s common stock. The issue at hand is finding the correct costs of debt and equity in order to find an accurate calculation of WACC. Cohen used the 20-year yield on U.S. Treasuries as the risk free rate‚ which we found to be the correct figure given that Nike Inc. debt was valued over 25 years. Because there is no other given yield that is comparable
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U.S. National Debt In 2012‚ reelection polls show that the biggest concern expressed by the voters was the economy and national debt. Many economists‚ political leaders‚ and citizens are under the impression that America’s rising debt and purchasing of national debt bonds by the foreign countries will lead America to its inevitable bankruptcy. Some speculators predict that one day China will realize that the dollar is no longer valuable to hold because of its devaluation; therefore‚ Chinese will
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