q) Capital Expenditures (CAPEX) r) Change in Net Working Capital ( NWC) s) Asset Sales (after tax) t) Free Cash Flow (FCF) u) PV Factor: 1/(1+r)t v) PV of Cash Flow (PV[CF]) w) Net Working Capital x) Book Value ($M) y) Scrap Value ($M) Suppose Ocean Carriers uses a 9% discount rate. 1) Should Ms Linn purchase the $39M capsize? Make two different assumptions. First‚ assume that Ocean Carriers is a U.S. firm subject to a 35% statutory (and effective) marginal tax rate. Second‚ assume that
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someone’s course of action leads to something unrealistic or outrageous. The character in Twelve Angry Men who committed this fallacy was Yankee. Yankee said “Suppose this whole building fell on my head. You can suppose anything.” Yankee’s claim was a Slippery Slope because it created a domino effect in the movie‚ because the Architect supposes the jurors could have been wrong‚ then Yankee could have supposed that the building could fall on his head. For example‚ he should have done was say that there
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CLICK TO DOWNLOAD ECON 312 Week 1 Quiz 1. (TCO 1) The general concern of economics is with the study of the 2. (TCO 1) The term scarcity in economics refers to the fact that 3. (TCO 1) Are the goods that businesses offer for "free" to consumers also free to society? 4. (TCO 1) Which is considered to be an economic resource by economists? 5. (TCO 1) If an economy is producing at a point inside a production possibilities curve‚ then 6. (TCO 1) Which would not be characteristic of a capitalist economy
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time period corresponds to a quarter or three months. Yt = 8‚800 - 25rt - 25rt-1 25rt-2 - 25rt-3 - 20rt-4 - 20rt-5 20rt-6 - 15rt-7 - 15rt-8 - 10rt-9 Yt = 8‚400 - 5rt - 5rt-1 5rt-2 - 5rt-2 - 5rt-4 - 10rt-5 15rt-6 - 15rt-7 - 15rt-8 - 20rt-9 Suppose that the Fed can set the interest rate and that for the last 10 quarters‚ the interest rate has been 4 percent. Verify that initially real GDP equals 8‚000 for both IS curves. Answer: Since the interest rate has been 4 percent for the last ten quarters
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rolls (trials); each roll (trial) results in one of the six possible outcomes; each roll is independent of the other rolls; and the probabilities of the six outcomes remain constant for each roll. As a second example of a multinomial experiment‚ suppose we select a random sample of people and ask them whether or not the quality of American cars is better than that of Japanese cars. The response of a person can be yes‚ no‚ or does not know. Each person included in the sample can be considered as one
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If both firms succeed‚ they will each obtain revenue of 275. a. Should your firm undertake the 200 R&D effort? Use a decision tree. b. Now suppose it is possible for your firm to wait until after the result of your competitor’s R&D effort (success or failure) is known. Is it advantageous for your firm to wait? Use a decision tree. c. Now suppose that the two firms can form a joint venture to pursue either or both projects. What is the expected profit of pursuing both programs? Alternatively
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the following equation. [pic] [pic] [pic] [pic] [pic] [pic] b. The yield curve is as shown below. [pic] c. The yield curve is upward sloping. 8-4. Suppose the current zero-coupon yield curve for risk-free bonds is as follows: [pic] a. What is the price per $100 face value of a two-year‚ zero-coupon‚ risk-free bond? b. What is the price per $100 face value of a four-year‚ zero-coupon
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But economic growth also has opportunity costs! (Let TA handle in recitation) An important factor responsible for economic growth is an increase in capital Capital goods long-lasting tools used to produce final/consumption goods (goods that are used up) But capital itself has to be produced by the use of other resources (e.g. tractors‚ R & D) More capital a society produces today higher will be future output of final goods growth in the output of final goods => PPF will push out
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according to the above table‚ the number of meals served increased by a. b. c. d. e. 5 times.* 10 times 4 times. 8 times. 6 times Semester 1 2013 Page 3 of 10 4. Suppose Andy is selling Beatrice a unique piece of art which Beatrice would be willing to pay up to $100 but no more. Also‚ suppose Andy values the art at $50. Assume that Andy is able to make a one-time offer to sell the art to Beatrice for $X. If a deal cannot be struck‚ Andy cannot sell the art to anyone else
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Suppose the lifetime of a certain type of component is a random variable having an exponential distribution with mean lifetime 5 years. (a) What is the probability that a selected component of this type will last more than 4 years? (b) What is the probability
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