THE THEORY OF THE FIRM Notes by:Ramon Somar THE THEORY OF THE FIRM Even though managerial economics is not concerned solely with the management of business firms‚ this is its principal field of application. To apply managerial economics to business management‚ we need a theory of the firm‚ a theory indicating how firms behave and what their goals are. The concept of the firm plays a central role in the theory and practice of managerial economics. An understanding of the reason for the existence
Premium Economics Profit maximization
Project Free Cash Flows (dollars in thousands) Project number: 1 2 3 4 5 6 7 8 Initial investment (2‚000) (2‚000) (2‚000) (2‚000) (2‚000) (2‚000) (2‚000) (2‚000) Year 1 $ 330 $ 1‚666 $ 160 $ 280 $ 2‚200 $ 1‚200 $ (350) 2 330 334 200 280 900 (60) 3 330 165 350 280 300 60 4
Premium Net present value Internal rate of return
The Possessive Investment in Whiteness: An Investment Itself? “Race is a cultural construct‚ but one with deadly social causes and consequences” (Lipsitz 2). In his book‚ The Possessive Investment in Whiteness: How White People Profit From Identity Politics‚ George Lipsitz argues that it is in the best interest of white Americans to “invest in whiteness‚ to remain true to an identity that provides them with resources‚ power‚ and opportunity (Lipsitz vii).” Lipsitz’s book gives a substantial
Premium Race Racism White people
Alternative Fuels People in America do not realize the fact that driving their vehicle is one of the regular activities that they do that has one of the largest impacts on the earth. With more and more cars in use each day‚ the more fossil fuels are called for. Fossil fuels are natural fuels that were formed from the remains of living organisms. These fossil fuels typically take millions of years to be formed. Since most fossil fuels are being imported due to it taking a huge amount of time
Premium Petroleum Greenhouse gas
How successful was Lenin’s attempt to create an alternative modernity in Russia by 1929? Overview The aim of this essay is to discuss how successful Lenin’s policies were in his attempt to create an alternative modernity in Russia by his death in 1924. By scrutinizing his actions and their individual impacts in relation to the desired modernity‚ historians can assess whether Lenin achieved the socialist dream he sought for. I will break down the essay into three components from which I can individually
Premium Soviet Union Russia Vladimir Lenin
An investment bank is a financial institution that assists individuals‚ corporations‚ and governments in raising capital by underwriting and/or acting as the client’s agent in the issuance of securities. An investment bank may also assist companies involved in mergers and acquisitions‚ and provide ancillary services such as market making‚ trading of derivatives‚ fixed income instruments‚ foreign exchange‚ commodities‚ and equity securities. Unlike commercial banks and retail banks‚ investment banks
Premium Investment Collective investment scheme Mutual fund
maximization into it’s own area there were unequal distribution of wealth among pre and post IPO partners the firm was in a period of rapid growth ‚ diversification and globalization period ‚ environment that put a lot of pressure on people generally and management especially traditionally rivalry btw Fisher and Greenhill ‚ Greenhill representing the interest of investment banking division ‚ old and conservative and Fisher being the “new wave” into the company with it’s new divisions such
Premium Management Leadership Morgan Stanley
Birth Order It is a commonly known fact that not all children are the same‚ not even close. But at the same time‚ children follow distinct patterns based on where they are in their family ’s birth order. The only child‚ the first child‚ the middle‚ and the last all have distinct traits that can fit into each family. Not every child fits into every single characteristic‚ but virtually everyone can relate in some way or another. Many psychologists have argued that birth order is nothing but a
Premium Birth order
1. THE INVESTMENT DETECTIVE This case presents the cash flows of eight unidentified investments‚ all of equal initial investment size. The student’s task is to rank the projects. The first objective of the case is to examine critically the principal capital-budgeting criteria. A second objective is to consider the problem that arises when net present value (NPV) and internal rate of return (IRR) disagree as to the ranking of two mutually exclusive projects. Finally‚ the case is a vehicle for introducing
Premium Net present value Internal rate of return Rate of return
Alternative Energy Sources Fossil fuels will not last forever. If the human race wishes to continue to live the way we do‚ then we have to look at alternative energy sources such as: geothermal‚ nuclear‚ solar‚ wind‚ and hydroelectric energy. Alternative energy sources are not without faults‚ but along with faults‚ there are benefits and solutions to the issues. Geothermal energy is a well-proven energy resource that can be used to provide both heat and electricity. Geothermal energy is very
Premium Energy development Fossil fuel Nuclear power