Marginal Incorporated (MI) has determined that the before cost of debt is 6% for the first $100 million in bonds it issues, and 8% for any bonds issued above $100 million. Its cost of preferred stock is 9%. The cost of internal equity is 12% and its cost of external equity is 14%. Currently, the firm’s capital structure has $600 million of debt, $100 million of preferred stock, and $300 million of common equity. The firm’s marginal tax rate is 30%. The firm is currently making projections for next period. Its managers have determined that the firm should have $75 million available from retained earnings for investment purposes next period.

What is the firm’s marginal cost of capital at each of the following total investment levels?       

1. Total investment level of $280 million?
2. II. Total investment level of $200 million?

III. Total investment level of $77 million?  

Explain the J-curve phenomenon. Consider an economy with a fixed exchange rate with a fixed price level. What is the effect of depreciation on equilibrium income and trade balance after the first six months of depreciation?

Explain the J-curve phenomenon. Consider an economy with a fixed exchange rate with a fixed price level. What is the effect of depreciation on equilibrium income and trade balance after the first six months of depreciation?

Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $810,000. The estimated market values of the purchased assets are building, $456,000; land, $247,000; land improvements, $66,500; and four vehicles, $180,500.

Required:

1-a. Allocate the lump-sum purchase price to the separate assets purchased.
1-b. Prepare the journal entry to record the purchase.
2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $30,000 salvage value.
3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation.

Q. a) On March 1st, Max had six TVs ($200 cost). Each Monday this month (March 6th, 13th, 20th, and 28th), Max purchased ten TVs from his supplier. The price increased to $210 on March 12th but dropped to $205 on March 28th. Max sold five TVs in week one, eight in week two, eleven in week three, and six in week four. Assuming the selling price was $400 per TV and Max uses the moving- weighted-average method, what was his gross margin for March? Make all necessary journal entries and SHOW YOUR WORK!

b) Repeat a, but using the first-in-first-out method.

1.

An order for 200 of a product is processed on operation A and operation B. The setup time on A is 30 minutes, and the run time per piece is 5 minutes. The setup time on B is 50 minutes, and the run time is 3 minutes per piece. It takes 30 minutes to move a lot between A and B. Now, It is decided to overlap the two operations by splitting the lot of 200 into two lots of 120 and 80. When the first lot is finished on operation A, it is moved to operation B where it is set up and run. Meanwhile, operation A completes the second lot of 80 and sends the units over to operation B. These 80 units should arrive as operation B is completing the first lot of 120 (If not, the operation B has to wait till the lot 2’s arriving. Then operation B will have an idle time); thus, operation B can continue without interruption until all 200 units are completed. The total manufacturing hours spent are:

Select one:

a. 21.67

b. None of them

c. 25.34

d. 22.16

e. 22.55

2.

An order for 300 of a product is processed on operation A and operation B. The setup time on A is 50 minutes, and the run time per piece is 6 minutes. The setup time on B is 30 minutes, and the run time is 4 minutes per piece. It takes 30 minutes to move a lot between A and B. Now, It is decided to overlap the two operations by splitting the lot of 300 into two lots of 200 and 100. When the first lot is finished on operation A, it is moved to operation B where it is set up and run. Meanwhile, operation A completes the second lot of 100 and sends the units over to operation B. These 100 units should arrive as operation B is completing the first lot of 200 (If not, the operation B has to wait till the lot 2’s arriving. Then operation B will have an idle time); thus, operation B can continue without interruption until all 300 units are completed. The total manufacturing hours spent are:

Select one:

a. 36

b. None of them

c. 37.5

d. 38

e. 37

You have been asked to assess the impact of possible changes in reserve requirement components on the dollar amount of reserves required. Assume the reserve percentages are currently set at 2 percent on the first $50 million of traction account amounts; 4 percent on the second $50 million; and 10 percent on transaction amounts over $100 million. The First National Bank has transaction account balances of $100 million, while the Second National Bank’s transaction balances are $150 million and the Third National Bank’s transaction balances are $250 million.

a. Determine the dollar amounts of required reserves for each of the three banks.

b. Calculate the percentage of reserves to total transactions accounts for each of the three banks.

c. The Central Bank wants to slow the economy by raising the reserve requirements for member banks. To do so, the reserve percentages will be increased to 12 percent on transaction balances above $100 million. Simultaneously, the 2 percent rate will apply on the first $25 million. Calculate the reserve requirement amount for each of the three banks after these changes have taken place.

d. Show the dollar amount of changes in reserve requirement amounts for each bank. Calculate the percentage of reserve requirement amounts to transaction account balances for each bank.

e. Which of the two reserve requirement changes discussed in (c) causes the greatest impact on the dollar amount of reserves for all three of the banks?

f. Now assume that you could either: (1) lower the transactions account amount for the lowest category from $50 million down to $25 million, or (2) increase the reserve percentage from 10 percent to 12 percent on transactions account amounts over $200 million. Which choice would you recommend if you were trying to achieve a moderate slowing of economic activity?

WRITE A C++ PROGRAM:

QUESTION 1

1. Assume you have a hobby to collect a particular type of items. Specify the category to which the items you collect belong to ____________________________
   1. [2 points] Define a struct with the name the same as the category that you filled in the blank above
   2. [4 points] The struct must have at least two members corresponding to properties relevant to the items in the category you specified. The struct members must have names meaningful to the items.
   3. [2 points] Declare an array to store 100 of your hobby items.
   4. [2 points] Declare another array to store 100 of the hobby items that belong to a friend
   5. [2 points] Declare a two dimensional array called matchingPairs that has a maximum of 100 rows. The values in this array will be indices to arrays declared in c and d.
   6. [5 points] Write a function to read values into any array similar to the ones in c and d. Note that when the function returns, the array that is passed into the function must contain the values read in.
   7. [5 points] Write statements to call the function in f to read values into arrays declared in c and d.
   8. [5 points] Write a function that takes in two arrays similar to the ones in c and d and returns an array similar to the one in e. The function must compare elements in the input arrays and store indices where matches are found. For instance, if the item in array index 5 of the first array matches the item in array index 2 of the second array, then 5 and 2 are stored in one row in the third array. Care must be taken to ensure that the first two arrays remain intact, that is no changes happen in the first two arrays.
   9. [5 points] Write code to call the function in h and print the results of the array returned by the function in h.
   10. Adequate comments in code [3 points]
   11. Program structure and readability [5 points]