3. A falling head permeability test is conducted on a sample of soil. The standpipe diameter = 5 mm, and the soil sample was cylindrical, 20 cm long by 10 cm in diameter. During the test, the initial head of water in the standpipe was 100 cm, and it dropped to 35 cm in 3 hours. a. Determine the coefficient of permeability, k, of the soil (cm/s). b. What soil type do you think this is?

Consider and discuss the interactions between rising or falling costs, the quantity and profitability of products in a business environment. How does variable cost changes affect the contribution margin and profit as opposed to the changes in fixed costs? Provide life examples of how you see these costs in your personal life or business.

The combination of falling U.S. housing prices and the large number of subprime borrowers defaulting on their mortgages just prior to the financial crisis of 2008 created a solvency problem for U.S. commercial banks that had provided mortgage loans to subprime borrowers and held those mortgages on their balance sheets (ie. they did not sell them to Special Purpose Vehicles). Briefly explain how these two events could threaten to make those U.S commercial banks insolvent.

The combination of falling U.S. housing prices and the large number of subprime borrowers defaulting on their mortgages just prior to the financial crisis of 2008 created a solvency problem for U.S. commercial banks that had provided mortgage loans to subprime borrowers and held those mortgages on their balance sheets (ie. they did not sell them to Special Purpose Vehicles). Briefly explain how these two events could threaten to make those U.S commercial banks insolvent.

Which of the following strategies can be implemented in falling interest rate environment to hedge the interest rate risk (select as many as applicable)? Please explain your logic in a concise way.
1. Buy short-term and long-term bonds
2. Sell long term bonds and buy short term
3. Buy long term bonds and sell short term
4. Sell a fixed coupon bond and enter a swap receiver position
5. Buy a fixed coupon bond and enter a swap payer position
6. Buy the corporate bond and sell the matching maturity government bond
7. Buy a CDS
8. Sell a CDS
9. Receive a total return swap
10. Pay a total return swap

Required information

Problem 14-23 Preparing a master budget for retail company with no beginning account balances LO 14-2, 14-3, 14-4, 14-5, 14-6

[The following information applies to the questions displayed below.]

Finch Company is a retail company that specializes in selling outdoor camping equipment. The company is considering opening a new store on October 1, 2019. The company president formed a planning committee to prepare a master budget for the first three months of operation. As budget coordinator, you have been assigned the following tasks:

Problem 14-23 Part 1

Required

1. October sales are estimated to be $340,000, of which 35 percent will be cash and 65 percent will be credit. The company expects sales to increase at the rate of 20 percent per month. Prepare a sales budget.

2. The company expects to collect 100 percent of the accounts receivable generated by credit sales in the month following the sale. Prepare a schedule of cash receipts.

3. The cost of goods sold is 70 percent of sales. The company desires to maintain a minimum ending inventory equal to 20 percent of the next month’s cost of goods sold. However, ending inventory of December is expected to be $12,500. Assume that all purchases are made on account. Prepare an inventory purchases budget.

4. The company pays 60 percent of accounts payable in the month of purchase and the remaining 40 percent in the following month. Prepare a cash payments budget for inventory purchases.

5. Budgeted selling and administrative expenses per month follow:

1. *The capital expenditures budget indicates that Finch will spend $133,000 on October 1 for store fixtures, which are expected to have a $25,000 salvage value and a two-year (24-month) useful life.

Use this information to prepare a selling and administrative expenses budget.

6. Utilities and sales commissions are paid the month after they are incurred; all other expenses are paid in the month in which they are incurred. Prepare a cash payments budget for selling and administrative expenses.

7. Finch borrows funds, in increments of $1,000, and repays them on the last day of the month. Repayments may be made in any amount available. The company also pays its vendors on the last day of the month. It pays interest of 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $17,000 cash cushion. Prepare a cash budget.

8. Prepare a pro forma income statement for the quarter.

9. Prepare a pro forma balance sheet at the end of the quarter.

10. Prepare a pro forma statement of cash flows for the quarter.

1. A country with a floating exchange rate is at full employment (actual GDP = potential GDP) with stable prices.  A new president is elected and decides to increase government spending.  

1. What will happen to actual GDP if monetary policy doesn’t change?
2. How should monetary policy change to keep prices stable and prevent actual GDP being different from potential GDP?

What will happen to the interest rate, the exchange rate, investment, consumption, and net exports in the short run when prices are sticky?  Use diagrams for the goods market (Keynesian cross), money market, FX market, and IS-LM diagram to explain your answer

1. For each of the following events, explain the short-run and long-run effects on output and the price level, assuming policymakers take no action using a AS-AS-LRAS graph. (8 points)

a. The stock market declines sharply, reducing consumers’ wealth.

b. The federal government increases spending on national defense.

c. A technological improvement raises productivity.

d. A recession overseas causes foreigners to buy fewer U.S. goods and services.

e. Using AS-AD-LRAS graph, explain the consequences of the budget deficit on output and price level. Assuming the government borrow money from the rest of worlds, and needs to pay it back in the future.