“Minister of labour, Thulas Nxesi, has gazetted South Africa’s new minimum wage which will take effect from 1 March 2020. The gazette states that the new national minimum wage is R20.76 – an increase of 3.8%”. Adapted from:

https://businesstech.co.za/news/government/374920/6-planned-laws-that-government-hasjust-announced-for-south-africa/ Accessed: 21/02/2020

Provide a discussion on the welfare effect of the above, that illustrates the case for when the above results in unemployment in the market for domestic workers as well as a case for when the above has no effect on the market for domestic workers. Use a diagram to support your discussion.

A blue car with mass m_c = 537 kg is moving east with a speed of v_c = 20 m/s and collides with a purple truck with mass m_t = 1380 kg that is moving south with an unknown speed. The two collide and lock together after the collision moving at an angle of θ = 56° South of East1)What is the magnitude of the initial momentum of the car?

2)

What is the magnitude of the initial momentum of the truck?

3)

What is the speed of the truck before the collision?

4)

What is the magnitude of the momentum of the car-truck combination immediately after the collision?

5)

What is the speed of the car-truck combination immediately after the collision?

101)

Suppose that you are valuing a South African diamond producer that sells most of its products in China, records its sales in Chinese RMB, and has most of its employees in China. The company is publicly traded on the South African stock market. Which of the following should be components of your Cost of Equity calculation for this company?

a) Use Chinese government bond yields for the Risk-Free Rate.

b) Use South African government bond yields for the Risk-Free Rate.

c) The Equity Risk Premium should be based on US stock market historical returns, plus a spread to account for the additional risk and potential returns in South Africa (as the company is listed on the South African stock market).

d) The Equity Risk Premium should be based on US stock market historical returns, plus a spread to account for the additional risk and potential returns in China (as the company operates largely in China).

e) Ideally, Levered Beta should be based on comparable diamond producers that operate in China.

f) Ideally, Levered Beta should be based on comparable diamond producers that are headquartered in South Africa but operate largely in China.

102)

Which of the following represent DIFFERENCES in a Levered DCF analysis compared to an Unlevered DCF analysis?

a) You will calculate Terminal Value using an Equity Value-based multiple rather than an Enterprise Value-based one.

b) You will use Levered Beta rather than Unlevered Beta in the Cost of Equity calculations.

c) You will use Cost of Equity instead of WACC for the discount rate.

d) You don’t have to add back non-cash charges in the same way because Levered Free Cash Flow starts with Net Income rather than NOPAT.

e) You will calculate the company’s Implied Equity Value directly from the analysis, rather than calculating the implied Enterprise Value and then backing into the implied Equity Value.

f) When calculating Free Cash Flow, you have to subtract the net interest expense and mandatory debt repayments.

106)

Which of the following events might serve as catalysts if you are drafting a stock pitch for a healthcare company?

a) The launch of new products in any year of the projection period shown in your DCF analysis.

b) The launch of new pipeline drugs in the next 6-12 months.

c) A debt, equity, or convertible issuance within the next year.

d) A key patent expiration in 2-3 years.

e) An annual price increase that the company announces in January each year.

f) US or EU regulators approving a key drug for sale within the next year.

g) An acquisition that is set to close in 18 months.

a.  Suppose that 33% of American CEO's are women. Furthermore, suppose that 17% of American CEO's are women under the age of 40. Given that a randomly selected American CEO is a woman, what is the probability that she is under the age of 40?

Round your answer to three decimal places.

Probability =

b. The probability that the head of a U.S. household has a life insurance policy is 0.640. Moreover, the probability that the head of a U.S. household has a life insurance policy and is over the age of 50 is 0.400. Given that a randomly selected head of a U.S. household has a life insurance policy, what is the probability that he/she is over the age of 50?

Round your answer to three decimal places.

Probability =

c. Suppose that 33% of customers purchase peanut butter during a particular trip to the grocery store. Furthermore, 18% of grocery store customers purchase both peanut butter and jelly. Given that a random grocery store customer purchases peanut butter, what is the probability that he/she also purchases jelly during this trip?

Round your answer to three decimal places.

Probability =

d. In a particular convenience store, the probability that a customer will purchase beer is 0.380. Moreover, given that the customer has purchased beer, the probability that he/she will purchase pretzels is 0.280. What is the probability that a random customer in this convenience store will purchase beer and pretzels together?

Round your answer to three decimal places.

Probability =

23. a. Suppose that 42% of American CEO's are women. Furthermore, suppose that 24% of American CEO's are women under the age of 40. Given that a randomly selected American CEO is a woman, what is the probability that she is under the age of 40?

Round your answer to three decimal places. Probability = ????

b. The probability that the head of a U.S. household has a life insurance policy is 0.510. Moreover, the probability that the head of a U.S. household has a life insurance policy and is over the age of 50 is 0.420. Given that a randomly selected head of a U.S. household has a life insurance policy, what is the probability that he/she is over the age of 50?

Round your answer to three decimal places. Probability = ????

c. Suppose that 21% of customers purchase peanut butter during a particular trip to the grocery store. Furthermore, 19% of grocery store customers purchase both peanut butter and jelly. Given that a random grocery store customer purchases peanut butter, what is the probability that he/she also purchases jelly during this trip?

Round your answer to three decimal places. Probability = ????

d. In a particular convenience store, the probability that a customer will purchase beer is 0.360. Moreover, given that the customer has purchased beer, the probability that he/she will purchase pretzels is 0.200. What is the probability that a random customer in this convenience store will purchase beer and pretzels together?

Round your answer to three decimal places. Probability =????

A new American graduate is contemplating buying a Japanese, German, or an American car. No matter the type of car, he plans to buy a new one at the end of 8 years. Japanese car will cost $30,000 and have a fuel usage of 23 Miles Per gallon (mpg) for the first 2 years, and will decrease by 3% per year thereafter. Repair cost will start at $700 per year, and increase by 3% per year. At the end of year 8, the car can be sold for $5000. Insurance cost will be $700 for the first year, increasing by 2% per year thereafter.

A German car will cost $45,000 and have fuel usage of 21mpg for the first 5 years, and decrease by 1% thereafter to year 8. Repair cost will start at $1000 in year 1 and increase by 4% per year. It will have a salvage value of $7000 at the end of year 8. Insurance cost will be $850 the first year, increasing by 2% per year thereafter.
The American car will cost $35,000 and have fuel usage of 20mpg for the first 3 years, and will decrease by 3% per year thereafter. Repair cost will be $800 in year 1, increasing by 4% per year thereafter. Being an American, the graduate will price the pride of owning an American car at $0.4 for every 20 miles driven, increasing by 2% per year. Insurance cost will be $800 per year increasing by 2.2% per year. The car can be sold for $5500 at the end of year 8.
If the graduate anticipates driving 150000 miles by the end of year 8 and the average interest rate is expected to remain at 5% per year, which car is economically affordable based on present worth analysis? Assume fuel cost will be $3 per gallon in year 1 and increase by an average of 2% per year. Show all your workings.

Preparing a Schedule of Cost of Finished Goods Manufactured, Cost of Goods Sold Schedule, and an Income Statement.

Listed below is information related to RRR Co’s manufacturing activities for the month of October 2020.

Ending Balance                       Beginning Balance

Materials Inventory                                                                 $197,000                                    $ 211,000

Work in Process Inventory                                                       59,000                                         78,000                    

Finished Goods Inventory                                                        91,000                                           82,000

During October 2020, RRR Company purchased $105,000 of raw materials and incurred direct labor costs of $77,100. The company applies overhead at a rate of 45% of direct labor cost. General, selling and administrative costs amounted to $36,100, and the company sold 39,400 units of its product at a price of $37.84 each.

Directions:

1. Prepare RRR’s schedule of cost of finished goods manufactured for October 2020.
2. Determine RRR’s cost of goods sold during October 2020.  
3. Prepare RRR’s income statement for the month ended October 31,2020 (ignoring interest expense and income taxes)