1. Garden Company is an integrated multidivisional manufacturing firm. Two of its divisions, Motor and Assembly, are profit centres and their division managers have full responsibility for production and sales (both internal and external). Both the Motor and Assembly manager are evaluated by top management based on total profit.

Motor is the exclusive producer of a special component called QS – 40. Since there is no outside competition for QS-40, the Motor division manager used the results of a market study to set the price of $550 for each unit. Normal sales are 21,000 per year. Production capacity is 26,000 per year. Standard production costs for one unit of QS-40 based on normal production volume are as follows:

Direct materials                                $175

Direct labour                                         75

Variable overhead                             60

Fixed overhead                                100

Total unit production costs $410.00

Assembly Division produces machinery for several large customers on a contractual basis. Management have been approached by a manufacturer of industrial greenhouses to produce a sprinkler system for greenhouses.   QS-40 is a component of the sprinkler system. Potentially each greenhouse may need several sprinkler systems. The new customer order size is 15,000 units per year at a price of $ 750 per unit.

The manager of the Assembly Division calculated the unit costs to produce the special machine as follows (direct materials does not include QS-40):

Direct materials                   $100

Direct labour                             50

Variable overhead                  35

Fixed overhead                        45

Total unit production costs $230

Required:

1. What is the maximum unit transfer price that Assembly would be willing to pay for QS-40 if the division wishes to accept the contract for the sprinkler system?
2. What is the minimum unit transfer price that Motor division should be willing to accept for QS-40? Based on a and b will a transfer occur?
3. Assume that Motor Divisions would be able to sell its capacity of 26,000 units of QS -40 per year if the selling price is reduced by 10%. Evaluate from the view of top management the quantitative and qualitative factors of selling internally or reducing price and selling externally. If none are sold internally then Assembly division will not be able to make Sprinkler system.

4. Assume top management decide to impose a dual transfer pricing system for QS-40 which would satisfy the Motor and Assembly managers.   Discuss the implications of this decision.

pictures the first time were blurry.

King Kanuta, the ruler of Nutting Atoll, does not particular care for OSPs. However, he and his subjects love coconuts. The Nutters’ demand for coconuts is ? ? = 1200 − 100 × ?, while the supply of coconuts in Nutting Atoll is ? ? = 100 × ?.

a. What is the equilibrium price and quantity in this competitive market? What is the consumer and the producer surplus?

b. One day, King Kanuta decides to tax his subjects in order to collect coconuts for the Royal Larder. The King requires that for each coconut that every subject consumes, the subject must first buy a voucher from the palace at price £2. Write down the wedge that this tax introduces between consumer and producer prices. What is the effective price that consumers pay per coconut that they consume, and how many coconuts do they consume? What is the consumer and producer surplus under the coconut tax? How much revenue does this tax raise and how is the tax burden distributed?

c. King Kanuta’s subjects resent paying the taxes to the King and there are alarming signs of revolution among the Nutters. As a reaction, the King changes the tax. Now, the shopkeepers who sell the coconuts are responsible for paying the tax. That is, for each coconut they sell they must buy a license at a price of £2. Write down the new wedge that this tax introduces between consumer and producer prices. How many coconuts are consumed by the Nutters after this change in tax structure, what is the new price they pay? How much revenue does this tax raise and how is the tax burden now distributed?

d. There has been a rat invasion in the Royal Larder and all of King Kanuta’s reserves are now lost. In desperation, he decides to increase taxes in order to replenish his beloved Larder. In particular, he now wants to require each transaction of coconuts to be taxed at a price of £4. What would be the new quantity of coconuts transacted? What would be the new tax revenue? Calculate the deadweight loss of this tax.

e. King Kanuta’s Grand-Vizier thinks that a tax of £4 will not be enough. He is instead advocating a tax of £8. What would be the tax revenue at a tax of £8? Calculate the deadweight loss of this tax. Compare your answers to part d. Is there anything surprising here?

f. Finally, Lafferiku (King Kanuta’s Royal cook), is pushing for an even bigger tax of £10 per coconut. In terms of revenue collected and deadweight loss, how would you argue against such a tax?

If demand is :Qd = 850 - 15 P and supply is: Qs = 100 + 15 P

Where: Qd = quantity of the good demanded.

           Qs = quantity of the good supplied.

             P = price of the good.

Part 1: The equilibrium price is ____________

Part 2: The equilibrium quantity is ____________

Part 3: An imposed price of 15 yields an excess __________ of ____________ units.

Part 4: Assuming a change in consumer preference shifts the demand curve to Qd'= 680 - 15 P, the new equilibrium price is ____________

Part 5: With the new demand in part 4, the new equilibrium quantity is ____________

Assuming the standard US Par (Face) value of $1000,

Annual coupon = $100 x 6% = $60

a) Consider a 20-year 6 percent coupon bond.

i) What is the price of this bond if the market yield is 8%?

ii) What is the percentage change in the price of this bond if the market yield rises to 9%?

b) Consider a 20-year 7 percent coupon bond.

iii) What is the price of this bond if the market yield is 8%?

iv) What is the percentage change in the price of this bond if the market yield rises to 9%?

Consider the following supply and demand equations:

Supply: p = 10 + q

Demand: p = 100 − 2q

Show your work as your respond to the following questions.1

(a) What is the market equilibrium price and quantity? (5%)

(b) What is the Total Surplus at equilibrium? (5%)

(c) The government enacts a price ceiling at ¯p = 50. What is the Total Surplus?

D）Calculate the Consumer Surplus under a price ceiling of ¯p = 20.

(e) What is the Deadweight Loss under a price ceiling of ¯p = 10?

A cash-or-nothing option is another example of an exotic option in the 'binary options' category. For example, a cash-or-nothing European call pays off nothing if the asset price ends up below the strike price at maturity and pays a fixed amount, Q, if it ends up above the strike. Use the 4-step binomial tree to price the cash-or-nothing European call with the fixed payoff $20. Assume that the spot price is $100. The strike is $95. The time to maturity is 1 year. The risk-free rate is 5%, volatility 20%.

What is the price of a European put option on a non-dividend-paying stock when the stock price is $100, the strike price is $90, the risk- free interest rate is $5% per annum, the volatility is 35% per annum (continuously compounded), and the time to maturity is 6 months? Use the Black-Scholes-Merton option pricing formula.

One second later, the stock is traded at 101. How would you estimate the new price for the option without the Black-Scholes-Merton option pricing formula?

1. Due to the large fixed costs involved in providing electricity to a city (running cables, electric plants, etc.) the market for electricity is a natural monopoly. If marginal cost is $20, fixed cost is $1,000, and the demand is given by Q = 100 - P
   1. Calculate quantity, price, and profit.
   2. Calculate consumer surplus and social welfare
   3. If you were to regulate the price in this market, what price will maximize society’s welfare?
   4. Following your answer in part c), how will this price regulation change quantity, profit, consumer surplus, and social welfare?

Write a program that asks the user to enter an item’s wholesale cost and its markup percentage. It should then display the item’s retail price. For example:

• If an item’s wholesale cost is 5.00 and its markup percentage is 100 percent, then the item’s retail price is 10.00.

• If an item’s wholesale cost is 5.00 and its markup percentage is 50 percent, then the item’s retail price is 7.50.

The program should have a method named calculateRetail that receives the wholesale cost and the markup percentage as arguments, and returns the retail price of the item.

In Java please and thank you.