An Evaluation of the Status of Risk Management in South African manufacturing Industries. The manufacture industry in South Africa is central to growing the economy but has faced stagnation as a result of external challenges such as the fall in value of the Rand to the US Dollar, rising fuel costs, high inflation and increasing power costs. The manufacture industry is considered risk inclined because project undertakings are dynamic and complex, with multiple local and international stakeholders. Studies have shown that risk management has been poorly implemented in
manufacture industries in South Africa, despite there being a strong knowledge base to support it. Risk management has now become a competitive advantage in the industry.
Discuss the following:
 Obstacles to risk management
 Significant risks in the manufacturing industry
 Significant constraints
 Lesson to apply in the future

Problem 8

A share of preferred stock has a par value of $100, an annual dividend of 2% and a current market price of $65.

Part 1

What is the rate of return on the preferred stock?

Fixed costs are $3,000, variable costs are $5 per unit. The company will manufacture 100 units and chart a 50% markup. Using the cost-plus pricing method, what will the selling price be?

Suppose the market price is equal to 10. When a firm has the following cost function when capital is fixed: C(q)=100+4q2. What is the firm's maximized profit level?

What is the rate of return as of July 2001 for bond with face value of $100 coupon rate of 6.75%, issued on 7/15/96, maturity of 7/15/21 and current price of $95.60?

A government bond currently carries a yield to maturity of 8 percent and market price of $1,080. If the bond promises to pay $100 in interest annually for five years, what is its current duration?

A corporate bond matures on October 31, 2035. Its coupon rate is 5.00% and face value is $100. Its yield is 5.90%. How much is its price on June 3, 2020?

A 6-year 7.2% annual coupon bond is selling to yield 6.5%. The bond pays interest annually. The par value of the bond is $100.

a. What is the price of the 6-year 7.2% coupon bond selling to yield 6.5%?

b. What is the price of this bond one year later assuming the yield is unchanged at 6.5%?

c. Suppose that one year later the yield of the bond decreases to 6.3%. What is the price change attributable to moving to maturity assuming no change in the discount rate? What is the price change attributable to a decrease in the discount rate from 6.5% to 6.3%? What is the total price change?

When the price is $30 per unit, buyers in a market are willing to buy 400 gadgets and when the price is $60 per unit, they are only willing to buy 100 gadgets. When the price is $30 per unit, sellers in a market are only willing to sell 150 gadgets and when the price is $60 per unit, they are willing to sell 225 gadgets. Assume (1) the economic environment of buyers (their income, tastes or preferences, other prices, and expectations) and sellers (technology, input prices, etc.) are constant and (2) the demand and supply curves are linear all along. Determine the market equilibrium price and quantity.

2. For each of the following pairs of goods, indicate which has the higher price elasticity of demand and explain why.

a. Denim jeans or Levi’s jeans?

b. Breakfast foods or Kellogg’s Raisin bran?

c. Powdered sugar or cars?

3. Given the following demand curve : Qd = 750 – 2p

a. Calculate the point price elasticity when price = $100. Is demand elastic, inelastic or unit elastic

b. What is the TR function for this demand curve?

c. What is the MR function for this demand curve?

d. At what price is TR maximized and what is the TR at that price?