A competitive firm has total costs of production as indicated in the table below. Make calculation to fill in the following blanks.

The fixed cost is $ .

b) If the market price is $60, the optimal output is Q = , the profit is $ , and the total variable cost = $ .

c) If the market price is $30, the optimal output is Q = , the profit is $ , and the rent =$ .

d) If the market price is $20, the optimal output is Q = , the profit is $ , and the rent =$ .

You are attempting to value a call option with an exercise price of $150 and one year to expiration. The underlying stock pays no dividends. Its current price is $100. The stock price either increases by a factor of 1.5, or decreases by a factor of 0.5, every six months. The risk-free rate of interest is 2% per year (or 1% per six-month period). What is the value of this call option using the two-period binomial option pricing model? (Do not round intermediate calculations. Round your answer to 3 decimal places.)

(i). You are 20 years old. What is the fair price for a perpetuity that begins to pay you $2,000

annually from when you become 60 years old, assuming a 5% market interest rate? (the

payment starts at the end of 60 years.)

(ii). What is the fair price if the financial product is not a perpetuity but an annuity which

pays $2,000 per year during your ages from 60 to 100 years (again at a 5% interest rate)?

Q _ Why is the price differential between the perpetuity in (i) and the annuity in (ii) is not

that large?

Marin Corporation adopted the dollar-value LIFO retail inventory method on January 1, 2019. At that time the inventory had a cost of $52,000 and a retail price of $100,000. The following information is available.

The price index at January 1, 2019, is 100.

Compute the ending inventory at December 31 of the years 2019–2022.

Consider the following information.     

                2010 (base year)                            2011

              Price     Quantity                    Price     Quantity

Car           $100       400                      $120       420

Rice          $25       2,000                       $36     2,005

                      2012

                 Price     Quantity

Car              $130      450

Rice              $38    2,100

1. Compute nominal GDP, real GDP, and the GDP deflator for each year, using 2010 as the base year.
2. Compute the percentage change in nominal GDP, real GDP, and the GDP deflator in 2011 and 2012 from the preceding year.
3. Did economic well-being rise more in 2011 or 2012? Explain.   

A newly issued bond has a maturity of 10 years and pays a 7% coupon rate (with coupon payments coming once annually). The bond sells at par value of $100.

(a) What are the duration, modified duration and dollar duration of the bond? What is its convexity?

(b) Find the actual price of the bond assuming that its yield to maturity immediately increases from 7% to 8%?

(c) What price would be predicted by using duration? What is the prediction error?

(d) What price would be predicted by using duration-with-convexity? What is the prediction error?

You are bearish on Commodore stock and decide to sell short 100 shares at the current market price of $60 per share. (the stock does not expect dividends so ignore any expected dividend)

a) How much cash must you put into your brokerage account if the initial margin requirement is 50% of the value of the short position?

b) If you are wrong and the stock price increases, at what price would you receive a margin call from your broker if the maintenance margin is 30% of the value of the short position?

Please show all work.

Beginning inventory, purchases, and sales data for May for Ewert, Inc. are as follows:

May 1 Inventory 25 units at $10

       4   Purchase 20 units at $12

12 Purchase 15 units at $15

Assume 30 units were sold during the month for a price of $25 per unit.

Required:

Part 1) Determine the COST OF GOODS SOLD under each of the following methods:

First-in first-out (FIFO)

Weighted-average

Last-in first-out (LIFO)

Part 2) Determine the ENDING INVENTORY under each of the following methods:

A) First-in first-out (FIFO)

2. In a survey of a sample of 200 guests (100 male and 100 female) on a major cruise line A, it

   was found that 45 male guests and 55 female quests were satisfied. However, the cruise line advertised that 65% of its guests (overall) were satisfied. Undertake a hypothesis test at a 5% significance level to examine if the claim made by the cruise line can be supported with the data.

3. From the results of the survey in part b, do you think female guests are more satisfied than

   male guests on the cruise line? (Note: Undertake the test at a 5% significance level.)