A company is considering the purchase of a large stamping machine that will cost $185,000, plus $4,700 transportation and $9,300 installation charges. It is estimated that, at the end of five years, the market value of the machine will be $32,000. The IRS has established that this machine will fall under a three-year MACRS class life category. The justifications for the machine include $26,000 savings per year in labor and $36,000 savings per year in reduced materials. The before-tax MARR is 20% per year, and the effective income tax rate is 40%. What is the after-tax equivalent annual worth of this investment over the five year period which ends with the sale of the machine? (Do not enter a dollar sign $ with your answer.)
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Describe either an adverse selection or moral hazard problem a company is facing. Describe the qualities that make it either adverse selection or moral hazard. What is the source of the asymmetric information? Who is the less-informed party? Are there any wealth-creating transactions not consummated as a result of the asymmetric information? If so, could you consummate them? What advice/recommendations would you give the company? Incorporate concepts from the readings and lectures.
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1.a) Do these proposals cause more good than harm, in your opinion, or more harm than good? Why?
b) Would you make a distinction between cars and homes in this case? Why or why not?
c)a proposal to impose a $15,000 limit on total household credit card debt. In your opinion, is this a good idea? Or a bad idea? Why?
In: Economics
Discuss a set of trade barriers that exist in the United States and the impact it has on our economy.
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How did the McCarthy investigations into communist subversion impact the nation as a whole when it came to essential rights of the individual. Who opposed him?
In: Economics
In: Economics
1) Why China doesn't sell US bonds owned by the Chinese government? Or why not return them to America and get their money back?
2) In the event of a depression / or economic stagnation, what is the best way for the government to revive the economy? by using government expenses or using taxes? And why?
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How did information asymmetries in the home mortgage market contribute to the financial crisis of 2007-2009?'
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What were the positive effects of the 1988 Basel Accord? What were its shortcomings?
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How did information asymmetries in the home mortgage market contribute to the financial crisis of 2007-2009?
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Please answer 3 (or all) of the 5 questions below the background information: THIS IS ALL THE INFORMATION AVAILABLE
Background: Some years back policy makers in the Kingdom of Bahrain were faced with rising inflation caused by the fall in the value of the US dollar relative to other currencies. The Kingdom’s currency unit, the Bahraini dinar (BD), is pegged to the dollar, so when the dollar goes down in value the BD goes down as well. A weaker dollar/dinar means that anything and everything Bahrainis buy from overseas cost them more dinars. The dramatic fall in the dollar/dinar essentially made all Bahrainis poorer in terms of what their money would buy. To soften the effect of the peg the government agreed at the time to give each low-income Bahraini household (but not non-Bahraini residents, who represent 52.7% of the Kingdom’s population and 70%-plus of its workforce) BD50 (equal to $133) monthly to make it easier to buy what food and other necessities. We can’t forget, however, that inflation can be caused by putting too much money into the economy and that a rise in the general price of necessities can hurt consumers, especially those with low incomes. The fall in the currency could be compounded with price increases due to the injection of more money.
Given this background, your task is to provide an outline of your plan to determine whether or not this policy makes sense.
1. Behavior matters. What role, if any, will marginalism and incentives play in the questions you ask and the inferences you make in determining whether or not a policy makes sense? For example, what do you assume regarding the economic behavior of those receiving the money? Why might these assumptions matter?
2. Should we address the effects over different timeframes? If so, why does time matter if the problem is likely short lived?
3. What importance, if any, should you apply to the policy stipulation that different groups are treated differently? In short, do non-citizens matter, and if so, why?
4. What questions would you ask of those who drafted the policy for the government, and why?
5. What data might you need to gather, in general, to analyze the proposed policy?
In: Economics
In the market for Iphones the equilibrium price for Iphones is $400, and the quantity of Iphones sold is 20,000.
(f) The Processor used to make Iphones becomes considerably cheaper and innovation raises the incomes of the population. Show the relevant shifts in your diagram
(g) Suppose the government implements a price ceiling of $300. What happens to the market?
(h) Suppose the government implements a price ceiling of $500. What happens to the market?
(i) Suppose the government implements a price floor of $300. What happens to the market?
(j) Suppose the government implements a price floor of $500. What happens to the market
In: Economics
express your current opinions about one part of the topic of "Economic Justice". Simply offer your opinion and provide a reason.
The government uses our tax money to provide various kinds of benefits for citizens like you and me; there are too many to list. Currently, our tax laws are such that wealthier Americans pay more in taxes- as a percentage of their income- than poorer people do. For example, a person who earns $1,000,000 in a year might pay a 20% income tax ($200,000) and a person who earns $45,000 per year might pay a 0 - 5% income tax (0 - $2,250).
Does this seem "fair" or "just" to you? Yes or no?
First, you will need to explain what you mean by the word "fair" or "just" here. Pick which of the two you want to define.
Second, please provide one reason that you think this situation is or is not fair or just (by your understanding of the word).
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In: Economics
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