An investment opportunity has the following characteristics:
payments of $5,000 will be made to you and invested into a fund at
the end of each year, for the next 30 years. These payments will
earn a 9% effective annual rate, and the interest payments (paid at
the end of each year) are reinvested into a second account earning
a 5% effective annual rate. What would the purchase price of this
investment opportunity be if it had an annual yield of...
Backstory: General Electric Co. decided sustainability was a
business opportunity rather than a cost and pushed into the field
in 2005 with its new initiative. But the products and services
weren’t only for its customers they first transformed GE.
Key moves: GE began looking at sustainability as part of a
demographic trend, realizing that scarcity would increase with
population growth. Energy and water use, waste, carbon emissions
all would decline among the most efficient and sustainable
companies. GE saw a...
What are the problems with simply measuring key performance
targets in a rather static (say, annual) way, particularly for
fast-moving organizations which are exposed to significant external
change?
1) Some people believe that monetary policy should be made by
rule rather than by discretion. One of their beliefs is that
setting a policy rule will limit the abuse of power of
policymakers.
policymakers can better influence the political business cycle
in their favor when following a policy rule.
a policy rule provides policymakers with the greatest
flexibility to manage inflation.
if the Fed was required to follow a low-inflation policy, the
economy would face a less favorable short-run...
What are the components that you need to have from idea
to the opportunity to create a business? Define what does it take
to create business bring the product from idea to
opportunity.
Which of the following support the idea that monetary policy
should be made by a rule?
a.
the political business cycle and the time-inconsistency
problem
b.
the political business cycle but not the time-inconsistency
problem
c.
the time-inconsistency problem, but not the political business
cycle
d.
neither the political business cycle nor the time-inconsistency
problem
1) Which of the following is a positive (rather than a
normative) statement?
a. The government should increase the number of welfare programs
to lessen the number of families living in poverty.
b. The tallest player on a basketball team should play every
minute of the game, since he or she can get the most blocks and
rebounds.
c. On average, people with more years of education are found to
have higher income.
d. Every student should take courses in...
Which of the following is not an advantage of a company using
equity rather than debt to finance a project?
A. Interest always takes more cash than does paying
dividends.
B. Dividends do not need to be paid.
C. Equity does not need to be repaid whereas debt does.
D. Interest and Dividends are tax deductible.
A note of caution in interpreting the debt ratio is that
A. all debt decreases liquidity ratios.
B. financing arrangements, such as leases, may...
1. What is an opportunity cost? How does the idea relate to the
definition of economics? Which of the following decisions would
entail the greater opportunity cost: Allocating a square block in
the heart of New York City for a surface parking lot or allocating
a square block at the edge of a typical suburb for such a lot?
Explain.
2. Cite three examples of recent decisions that you made in
which you, at least implicitly, weighed marginal cost and...