A firm with yearly net income of $31,000 has only two customers, each of whom makes...

A firm with yearly net income of $31,000 has only two customers, each of whom makes identical purchases once per year. Timely Tom makes his purchase today and at the start of next year, while Late Louie makes his purchase half a year from today and halfway into next year (18 months from today). Moreover, Late Louie always pays 6 months late, i.e. at year end. What is the NPV of all cash flows to this firm in the next two years? Assume a yearly discount rate of 5.6%.

Expert Solution

jeff jeffy answered 1 year ago

Consider a game with two players, each of whom has two types. The types of player...

Consider a game with two players, each of whom has two types. The types of player 1 are T1 = (a,b). The types of player 2 are T2 = (c,d). Suppose the beliefs of the types are p1(c/a) = p2(a/c) = 0.25 and p1(c/b) = p2(a/d) = 0.75. Is there a common prior? If yes, construct one; if no, prove why not.

Australia has only one firm that makes aircraft. Without assistance from the government, that firm has...

Australia has only one firm that makes aircraft. Without assistance from the government, that firm has lost most of its business to imports from the United States and Europe. Which of the following policies would be most costly for the Australian nation as a whole, and which would be least costly? Explain. Policy A: Paying the lone Australian firm a production subsidy per plane, without protecting it against imports. Policy B: Imposing a tariff equal to the production subsidy in...

Suppose firm A and firm B are the only two firms in an industry. Each firm’s...

Suppose firm A and firm B are the only two firms in an industry. Each firm’s Marginal Abatement cost functions is given by: MACa = 200-Ea MACb = 200-2Eb Also, there are four people, each with marginal damage function: MDi = 1/3Et , Where Et = Ea+Eb a) What is the uncontrolled emission levels of each firm? b) Find the aggregate MAC function c) Find the aggregate MD function d) Determine the socially optimal level of emissions ?t ∗ and...

A firm has a (net income/taxable income) ratio of 0.8, aleverage ratio of 1.5, a...

A firm has a (net income/taxable income) ratio of 0.8, a leverage ratio of 1.5, a (taxable income/EBIT) of 0.4, an asset turnover ratio of 2, and a return on sales ratio of 10%. What is the firm's ROE?

2. The income statement reveals net earnings (net income) of a firm for a period of...

2. The income statement reveals net earnings (net income) of a firm for a period of time. Explain how “net earnings (net income) of a firm for a period of time” is different from each of the following descriptions: ? resources and equities of a firm at a point in time Usually record ? resources and equities of a firm for a period of time ? net earnings (net income) of a firm at a point in time

Exercise 3 : A firm has sales of $2,190, net income of $174, net fixed assets...

Exercise 3 : A firm has sales of $2,190, net income of $174, net fixed assets of $1,600, and current assets of $720. The firm has $310 in inventory. What is the common-size statement value of inventory? Also explain the implications of common size analysis.

pA box of five batteries of whom only two are good.Batteries will be tested in random...

pA box of five batteries of whom only two are good.Batteries will be tested in random order until a good one is identified to use for a flashlight. Let Ybe the number of batteries tested to identify a good one. Find the probability mass function of the random variable Y. using probability mass function formula

A firm has Net Income of $60,800 and has Total Assets of $601,991. The firm’s payout...

A firm has Net Income of $60,800 and has Total Assets of $601,991. The firm’s payout ratio is 60 percent. What is the firm’s Internal Growth rate? Can the firm grow at 4 percent without raising external funds and why? (Hint: Need to first compute ROA). Group of answer choices 6.45 percent; No, because 4 percent < Internal Growth Rate 6.45 percent; Yes, because 4 percent < Internal Growth Rate 4.21 percent; Yes, because 4 percent < Internal Growth Rate...

An insurance agent meets twelve potential customers independently, each of whom is equally likely to purchase...

An insurance agent meets twelve potential customers independently, each of whom is equally likely to purchase an insurance product. Six are interested only in auto insurance, four are interested only in homeowners insurance, and two are interested only in life insurance. The agent makes six sales. Calculate the probability that two are for auto insurance, two are for homeowners insurance, and two are for life insurance.

A firm has sales of $10, 000,000 in 2018, and operating income of $1,200,000 and net...

A firm has sales of $10, 000,000 in 2018, and operating income of $1,200,000 and net income of $650,000. The firm has total equity at year end 2017 of $4,000,000, total asset of $7,000,000. It also paid out $195,000 dividend in 2018. Calculate its equity multiplier. Use the 3-factor DuPont Identity to calculate its ROE. What’s its retention ratio? What’s its sustainable growth rate?

Question