or $24‚000 at the end of eight years. Assuming you could earn 11 percent annually‚ which alternative should you choose? If you could earn 12 percent annually‚ would you still choose the same alternative? Answer: I found two answers for the same problems. One is bringing the present value to the future and the other is bringing the future value to the present. In each one of them‚ different solutions were proposed. A. Present Value to the future Option 1: $10‚000 now with 11% interest. $10‚000
Premium Net present value Time value of money Rate of return
International Finance Problem Set #4 1. A. Fundamental-based Forecasting: Analyzing the future on the basis of fundamental relationships between economic variables and exchange rate. Fixed exchange rates: The forecasting is based on indicators of sustainability such as current account deficits or surpluses‚ relative inflation rates and black market exchange rates. Floating exchange rates: The forecasting is based on factors that could influence macro economy such as monetary policies and
Premium Foreign exchange market Exchange rate
Biology 180 Problem Set 2 1. A population of marine gastropods has shell lengths that are normally distributed with a mean μ = 8 mm and variance σ2 = 2.15 mm2. a. what proportion of the population will have shell lengths between 6.5 mm and 8.5 mm? (3 points) b. what is the probability of finding a gastropod that has a shell length of exactly 7.5 mm? (1 point) c. if there are 1‚000 gastropods in an area‚ how many will have shell lengths greater than 5 mm? (3 points) 2. Childhood lead poisoning
Premium Normal distribution Binomial distribution Poisson distribution
INSTRUCTIONS: You must show all of your work where calculations are required and you must include a brief explanation of approximately 50 words for each answer to receive full credit: 1. Markets‚ Demand and Supply‚ part 1 (10pts): a. What effect will each of the following have on the DEMAND for coffee (i.e. Increase Demand‚ Decrease Demand‚ or NO CHANGE)? You must include a brief explanation of approximately 50 words for each answer to receive full credit: i. There is an increase in the price
Premium Supply and demand
Module 3 – Chapter 12 Problem 12-1A Part 1 KAZAAM COMPANY Statement of Cash Flows For Year Ended December 31‚ 2011 Cash flows from operating activities Net income $73‚750 Adjustments to reconcile net income to net cash provided by operating activities Increase in accounts receivable ($49‚625 - $65‚000) (15‚375) Increase in inventory ($252‚500 - $273‚750) (21‚250) Decrease in prepaid expenses ($6‚250 - $5‚375) 875 Decrease in
Premium Dividend Generally Accepted Accounting Principles Accounts receivable
value of $1‚000. There are eight years to maturity. The yield to maturity is 9%. What is the current price of the bond? $1000 * 10%/2= 50 P= 50 * (1/.09) {1-[1/(1.09)^8} + [1000/(1.09)^8]80.29 = 555.56 (.50) + 502.51 = 277.78+ 502.51 = $780.29 Bonds-4. A particular corporate bond has a par value of $1‚000. Coupon payments are $40 and are paid twice a year. Seven years are left on the life of the bond.The YTM is 9%. What is the price of the bond? P= 80 * (1/.09) {1-{1/(1.09)^7} + [1000/(1.09)^7] =
Premium Dividend yield Bond Stock
This is point E (and x =30). b) The budget constraint shifts to x = 120. The new optimal choice is point C (and x = 35). c) ΔY∙py = (30-22‚5)∙10 = €75 d) The total effect: Point E C e) Income effect: F C Substitution effect: E F f) Income effect < 0‚ so X is an inferior good. 5a) U(x‚y) = x1x2 Normalize the parameters so that α + β = 1 U(x‚y) = xɗy1-ɗ‚ where ɗ = α/(α+β) and 1-ɗ = β/(α+β). The new utility function is U(x‚y) = x11/2x21/2 L (x1‚x2‚λ) = x11/2x21/2 + λ (I – px1x1
Premium Consumer theory Preference Supply and demand
value of the whole firm be after this investment (the post-money valuation)? Answer: a. After the funding round‚ the founder’s 8 million shares will represent 80% ownership of the firm. To solve for the new total number of shares (TOTAL): 8‚000‚000 = 0.80 TOTAL So TOTAL = 10‚000‚000 shares. If the new total is 10 million shares‚ and the venture capitalist will end up with 20%‚ then the venture capitalist must buy 2 million shares. Given the investment of $1 million for 2 million shares‚ the implied
Premium Stock market Dividend yield Venture capital
Industrial Organization‚ Spring Semester (2013) Mark McCabe Problem Set 1 Due in class on 27. March Instructions: Please show all of your work‚ e.g. all of the calculations associated with each solution. Your solutions should be typed and not handwritten. As I mentioned in class‚ students may work together to solve these problems‚ but plagiarism or copying is not permitted. On the 27th‚ please bring a paper copy to class‚ and e-mail me a digital copy (mccabe@umich.edu) before the beginning
Premium Economics Pricing Cost
Rodriguez operates a variety store that provides an annual revenue of $480 000. Each year‚ he pays $25 000 in rent for the store‚ $15 000 in business taxes‚ and $350 000 on products to sell. He estimates he could put the $80 000 he has invested in the store into his friend’s restaurant business instead and earn an annual 20 percent profit on his funds. He also estimates that he and his family could earn a total annual wage of $90 000 if they worked somewhere other than the store. a. Calculate
Premium Investment Generally Accepted Accounting Principles Profit