10) Consider that in the UK inflation and interest rates are expected to decline due to Brexit while in the US it both will rise due to full employment and Fed policy. Explain how the international trade flows should initially adjust in response to the changes in inflation (holding exchange rates constant). Explain how the international capital flows should adjust in response to the changes in interest rates (holding exchange rates constant).

Suppose that a random sample of n = 5 was selected from the apple orchard properties for sale in Chilton County, Alabama, in each of three years. The following data are consistent with summary information on price per acre for disease-resistant apple orchards in Chilton County. Carry out an ANOVA to determine whether there is evidence to support the claim that the mean price per acre for vineyard land in Chilton County was not the same for each of the three years considered. Test at the 0.05 level and at the 0.01 level.

2002: 30000 34000    36000    38000    40000

2003: 30000 35000 37000 38000 40000

2004: 40000 41000 43000 44000 50000

Year   Percentage
2000   28
2001   32
2002   36
2003   40
2004   44
2005   51
2006   53
2007   57
2008   60
2009   66

Forecast the percentage of tax returns that will be electronically filed for 2010 using exponential smoothing with trend adjustment.

alpha= 0.3 and beta= 0.4. Then calculate MAD.

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Quarter   Price
Q1 2017   186.3
Q2 2017   190.9
Q3 2017   195.2
Q4 2017   195.2
Q1 2018   198.7
Q2 2018   201.2

Forecast the price index for Q3 2018 using a​ three-period simple moving average. Then calculate MAD.

A relatively new firm has the dividend payment history. Suppose this stock sells for $8 per share. Estimate the shareholders' required rate of return using the dividend discount model with the following:

A. The dividend growth rate calculated over the firm's entire history.

B. The growth rate calculated over the actual dividend paying history only.

C. Why are the two answers different? Which do you think is most meaningful?

Table 9-10

Year dividends

2000 0

2001 0

2002 0

2003 0

2004 .10

2005 .13

2006 .15

2007 .18

Brown Inc.​'s annual dividends are indicated below. Find the required rate of return for this​ stock, assuming the future dividend growth rate will remain the same and the company has an infinite horizon. Assume the January​ 1, 2011 price of the stock was $39.00. What was the required return for Brown Inc.Brown Inc.​'s stock?

What was the estimated annual required return for Brown Inc.​'s ​stock? ​(Round to two decimal​ places.)

Given the following price data for EA and the Market Index (DIA) from 2000 to 2015, find the returns for each price series, then calculate the beta for EA's stock. (Round to 3 decimals)

Two factories located in different cities, owned by the same organization (ABC Corp), produce the identical product. The product they make is a specialized all-terrain vehicle. In 2002, based on productivity data from a random sample of workers, management felt the average labor productivity of the two plants could be improved. So, both plants underwent identical process improvements through 2003. In 2004, the worker productivity was gauged for both plants using the same set of workers.

Factory A Before = worker productivity for Factory A measured in units finished per day measured in 2002 i.e. before improvement intervention

Factory B Before = worker productivity for Factory B measured in units finished per day measured in 2002 i.e. before improvement intervention

Factory A After = worker productivity for Factory A measured in units finished per day measured in 2004 i.e. after improvement intervention

Factory B After = worker productivity for Factory B measured in units finished per day measured in 2004 i.e. after improvement intervention

You are the consultant and the management wants the following questions answered.

1. Was there a difference in average worker productivity between factories A and B before the process improvement began?
2. Do the two factories (A and B) differ in terms of average productivity after the process improvement?
3. Did the process improvement intervention help improve the average worker productivity in ABC Corp?
4. Did the process improvement intervention help improve the average worker productivity in factory A?
5. Did the process improvement intervention help improve the average worker productivity in factory B?
6. Did the average worker productivity in Factory A improve more than the average worker productivity in Factory B?

Assume α-level of 10%. You have to use p value method. Assume equal variances wherever needed.

Many reasons for why the United Kingdom voted to leave the European Union have been proposed. A common one is that imports from the EU hurt low-skilled British workers. Suppose that there are two industries, financial services and manufacturing. Further assume that there are two factors of production, low- skilled and high-skilled workers, and that finance is high-skill intensive and manufacturing is low-skill intensive. Further assume that the United Kingdom is abundant in high-skill labour.

a) Show using the Heckscher-Ohlin model of international trade how relative wages for low-skilled and high-skilled workers are determined when the UK is a member of the EU (i.e. when there is free trade between the UK and the rest of the EU). Explain your answer.

b) Describe also how the relative output of financial services versus manufacturing in the UK changes with Brexit. Explain your answer.

An independent report has predicted that economic growth in the UK will slow and even become negative by the third quarter of 2020, resulting in high unemployment levels and lower investment within the UK economy. Higher oil prices are also predicted which will have a knock-on effect of a general and persistent increase in prices (inflation). The report has urged the UK government to engage more with non-European markets which it says will result in more trade, more foreign investment and more knowledge transfer and sustained economic growth.

a. The management of Ace Body Gyms has asked you to evaluate the effects of the predicted changes in the UK economy outlined above on the performance of the company. Specifically, you should write an essay to address the effects of the independent report on the performance of Ace Body gyms. Performance should include, but is not limited to, the effects on price, cost, demand, investment opportunities, profits etc.

b. Your report should also include recommendations as to how Ace Body Gyms could maintain a solid performance despite the predicted economic downturn.

Allah, Ballah and Callah formed a Chartered Accountancy Firm in 2002. Their partnership agreement provided for the following:

1. Profits and Losses are to be shared as follows: Allah takes half, Ballah takes one-third and Callah takes the remainder.
2. Interest is to be charged on the partners’ drawings and capital balances at 3.5%vand 5% per annum respectively.
3. Allah, the administrative partner, is to be paid a monthly salary of GH¢2,400
4. Drawings by the partners were effected as follows:

Allah         GH¢36,000 on April 1,2004

Ballah        GH¢48,000 on June 30,2004

Callah        GH¢43,200 on September 30, 2004

In order to increase his capital contribution, Ballah, on July1,2004 released one of his private cars with a value of GH¢50,000 for exclusive use of the firm. He accordingly transferred the ownership of the car to the firm on the same date. On September 30,2004 it was further agreed that Allah should withdraw GH¢10,000 from his capital, while Callah should increase his capital by GH¢8,000.

The net profit for the year under consideration was GH¢71,565.

The partners credit balances as at January1, 2004 were as follows:

                                          Capital Account          Current Account

Allah                                 GH¢180,000                 GH¢10,500  

Ballah                                GH¢90,000                   GH¢8,200    

Callah                                GH¢62,000                    GH¢7,900   

Required: Prepare for the year ended 31^st December,2004

1. Profit and Loss Appropriation Account.
2. The Capital and Current Accounts of the partners in a columnar form.