There are over 5,000 banks in the United States—more than 10 times more per person than in other industrialized countries. A recent study suggests that the long-run average cost curve for an individual bank is relatively flat. If Congress took steps to consolidate banks, thereby reducing the total number to 2,500, what would you expect to happen to costs within the banking industry?
Please provide a detailed explanation in terms of what long-run average cost curve for the individual bank which is relatively flat means.What were the costs of the banks/banking industry previously and what will be the effects of costs on the overall banking industry.
The question carries 15 marks. Please provide a detailed answer to justice the question and marks.
In: Economics
Charles Xavier (a.k.a. Professor X) is researching mutants in the United States using his machine, Cerebro. There are many mutants with many different abilities, but every mutant power has a common epistatic “control” gene. The alleles for this gene are labeled “C” and “c”. If an individual has a gene that codes for a certain ability, that ability will not express itself unless the control gene has two recessive alleles. Knowing this, Professor X wants to track this control gene, and evaluate its mutation rate throughout the American population. Note that a mutation from C to c is a forward mutation and from c to C is a reverse mutation. Of the 318,000,000 people tracked through Cerebro, 11,943 experienced forward mutations and 25,937 experienced reverse mutations. What are the forward and reverse mutation rates? What are the C and c allele frequencies, assuming this population is in equilibrium? Are mutants on the rise or decline in the U.S. population? (5 points)
In: Biology
Consider the Harris-Todaro migration model applied to the United States; where average annual personal income is $41,000 in Jackson, MS, with 9.82% unemployment rate; and $63,800 in Chicago, with a 6.24% unemployment rate. Applying these data, please answer the following questions:
(1) Explain why annual income is higher in Chicago than Jackson.
(2) Explain why unemployment rate is lower in Chicago than Jackson.
(3) What is the probability that an individual would find employment in Chicago?
(4) What is the probability that an individual would find employment in Jackson?
(5) Calculate a potential migrant’s Expected Earnings (dollar amount) in Jackson.
(6) Calculate a potential migrant’s Expected Earnings (dollar amount) in Chicago.
(7) What would be the Expected Earnings differential between the two cities in this model?
(8) Between Jackson and Chicago, which city would exhibit migration pull-factors? Explain.
(9) Between Jackson and Chicago, which city would exhibit migration push-factors? Explain.
(10) Based on this Harris-Todaro model, explain whether or not a College graduate in Jackson would decide to move to Chicago.
In: Economics
There are over 5,000 banks in the United States—more than 10 times more per person than in other industrialized countries. A recent study suggests that the long-run average cost curve for an individual bank is relatively flat. If Congress took steps to consolidate banks, thereby reducing the total number to 2,500, what would you expect to happen to costs within the banking industry?
Please provide a detailed explanation in terms of what long-run average cost curve for the individual bank which is relatively flat means.What were the costs of the banks/banking industry previously and what will be the effects of costs on the overall banking industry.
In: Economics
Utease Corporation has many production plants across the midwestern United States. A newly opened plant, the Bellingham plant, produces and sells one product. The plant is treated, for responsibility accounting purposes, as a profit center. The unit standard costs for a production unit, with overhead applied based on direct labor hours, are as follows.
Manufacturing costs (per unit based on expected activity of 24,000 units or 36,000 direct labor hours):
| Direct materials (2 pounds at $20) | $ | 40.00 | ||
| Direct labor (1.5 hours at $90) | 135.00 | |||
| Variable overhead (1.5 hours at $20) | 30.00 | |||
| Fixed overhead (1.5 hours at $30) | 45.00 | |||
| Standard cost per unit | $ | 250.00 | ||
| Budgeted selling and administrative costs: | ||||
| Variable | $ | 5 | per unit | |
| Fixed | $ | 1,800,000 | ||
Expected sales activity: 20,000 units at $425.00 per unit
Desired ending inventories: 10% of sales
Assume this is the first year of operations for the Bellingham plant. During the year, the company had the following activity.
| Units produced | 23,000 | |||
| Units sold | 21,500 | |||
| Unit selling price | $ | 420 | ||
| Direct labor hours worked | 34,000 | |||
| Direct labor costs | $ | 3,094,000 | ||
| Direct materials purchased | 50,000 | pounds | ||
| Direct materials costs | $ | 1,000,000 | ||
| Direct materials used | 50,000 | pounds | ||
| Actual fixed overhead | $ | 1,080,000 | ||
| Actual variable overhead | $ | 620,000 | ||
| Actual selling and administrative costs | $ | 2,000,000 | ||
In addition, all over- or underapplied overhead and all product cost variances are adjusted to cost of goods sold.
c. Find the direct labor variances. Indicate if they are favorable or unfavorable. (Indicate the effect of each variance by selecting Favorable, Unfavorable, and "None" for no effect.)
Labor Efficiency Variance _________ Favorable/Unfavorable?
Labor Rate Variance ___________ Favorable/Unfavorable?
d. Find the direct materials variances (materials price variance and quantity variance). (Enter your answers in dollars not in pounds. Indicate the effect of each variance by selecting Favorable, Unfavorable, and "None" for no effect (i.e., zero variance.)
Material quantity variance __________ Favorable/Unfavorable?
Material price variance ___________ Favorable/Unfavorable?
f. Calculate the actual plant operating profit for the year
Operating Profit __________
In: Accounting
In the United States we have seen great progress in extending quantity/years to our lives. Longer life may present greater opportunities for such things as increased time with family, more time to pursue hobbies or other activities, such as volunteerism or community activism, than was experienced by previous generations. However, the degree to which aging adults can experience these opportunities is often reduced due to health factors or disabilities. Many of these health and disability factors are the result of lifestyle, and not necessarily due solely to “aging”. Among the health threats are diabetes, arthritis, heart disease, falls, and Alzheimer’s disease, depression, and other mental health issues.
Thus, we have achieved great strides in lengthening our average years of life, but we lag behind in facilitating quality for those extended years. In other words, we have people living “longer”, but not necessarily living “better”. This scenario will have a major impact on our health care and human services systems in the U.S., especially as the Baby Boomers continue to enter their elder years. There are significant concerns that our systems are not equipped to respond to the needs of this population.
In a post of a minimum of 175 words, discuss your thoughts on this scenario.
What evidence can you point to regarding the health and human services needs of this population and the ability of our health care and human services systems to meet them?
Identify some of those health and social service needs and the barriers that elder individuals may face as they age.
End your post with a statement about what you worry about in terms of your own aging.
In: Nursing
Unity designs and manufactures uniforms for corporation throughout the United States. Selected finacial information follows. Compute the following ratios for Year 2: receivable turnover ratio (assume that 80% of sales were credit sales), inventory turnover ratio, cash ratio, times interest earned ratio, and cash coverage ratio.
|
Year 2 |
Year 1 |
|
|
Net income |
$60,000 |
|
|
Net sales revenue |
$1,200,000 |
|
|
Cost of goods sold |
$650,000 |
|
|
Interest expense |
$25,000 |
|
|
Income tax expense |
$65,000 |
|
|
Cash and cash equivalents |
$12,000 |
$15,000 |
|
Accounts receivable |
$120,000 |
$160,000 |
|
Inventories |
$65,000 |
$60,000 |
|
Accounts payable |
$20,000 |
$21,000 |
|
Current accrued expenses |
$22,000 |
$20,000 |
|
Current portion of long-term debt |
$40,000 |
$35,000 |
|
Cash flows from operating activities |
$170,000 |
|
|
Cash paid for interest |
$20,000 |
In: Finance
7) Consider the markets for low-skilled and high-skilled labor in the United States. Draw two graphs how each of the following is likely to affect the wages of low-skilled workers relative to high-skilled workers.
a) Suppose that the government decided to approve more H-1B visa for high-skilled workers. In other words, more high-skilled workers come to the U.S. from foreign countries.
b) The aging of the U.S. population increases the demand for services such as home health care, home maintenance, transportation, and packaged food preparation that employ low- skilled workers.
In: Economics
Hoosier Racing Tire Company (Hoosier) is a large-scale company manufacturing tyres in the United States. After extensive research and development, Hoosier has recently developed a new tyre, the OutstandingTread, and must decide whether to make the investment to produce. The tyre would be ideal for drivers doing a large amount of wet weather and off-road driving in addition to normal freeway usage. The research and development costs so far have totalled $70 million. The OutstandingTread would be put on the market at the beginning of next year (Year 1), and Hoosier expects it to stay on the market for a total of four years (from Year 1 to Year 4). Test marketing costing $16 million has spent (tax deduction on this test marketing cost cannot be claimed) and shown that there is a significant market for a OutstandingTread tyre.
As the Chief Financial Officer at Hoosier, Robert Newton, has been asked by the board of directors to evaluate the OutstandingTread project and provide a recommendation on whether to go ahead with the investment. He was concerned with the discount rates used in the analysis, as well as various comments he had received from other executives at Hoosier whom he had asked to review the proposal.
Mr. Newton assumes that the initial investment will occur immediately (Year 0), and operational cash flows will occur at beginning of next year (Year 1). Hoosier must initially invest $140 million in production equipment to make the OutstandingTread in Year 0. This equipment can be sold for $55 million at the end of four years (Year 4). Hoosier intends to sell the SupperTread to two distinct markets, original equipment manufacturer market and replacement market.
1) The original equipment manufacturer (OEM) market: The OEM market consists primary of the large automobile companies (like General Motors) that buy OutstandingTread tyres for new cars. In the OEM market, the OutstandingTread is expected to sell for $41 per tyre in Year 1. The variable cost to produce each tyre is $18 in Year 1.
2) The replacement market: The replacement market consists of OutstandingTread purchased after the automobile has left the factory. This market allows higher margins; Hoosier expects to sell the OutstandingTread for $62 per tyre there in Year 1. Variables costs are the same as in the OEM market.
Hoosier intends to raise prices at 1 percent above the inflation rate from Year 2 to year 4 in the OEM and the replacement market; variable costs will increase at 1 percent above the inflation rate from Year 2 to Year 4 as well. In addition, the OutstandingTread project will incur $25 million in marketing and general administration costs in the first year (Year 1). This cost is expected to increase at the inflation rate in the subsequent years (Year 2 to Year 4).
Hoosier’ corporate tax rate is 35 percent. Annual inflation is expected to remain constant at 3.25 percent over the life of the project. Automotive industry analysts expect automobile manufacturers to produce 6.2 million new cars in Year 1 and production will grow at 2.5% per year thereafter. Each new car needs four tyres (the spare tyres are undersized and are in a different category). Hoosier expects the OutstandingTread to capture 11 percent of the OEM market from year 1 to year 4. Page 3 of 3
Industry analysts estimate that the replacement tyre market size will be 32 million tyres in Year 1 and that it will grow at 2 percent annually. Hoosier expects the OutstandingTread to capture an 8% market share.
The production equipment would be depreciated using the straight-line depreciation method over 4 years to a zero balance. The immediate initial working capital requirement is $11 million in Year 0. Thereafter, the net working capital requirements will be 25% of sales. At the end of year 4, the company (Hoosier) will get all working capital back.
In last year, the Hoosier used a 12% discount rate to evaluation a new project, AllTyres. However, Mr. Newton believes the overall risk of OutstandingTread is 2% higher than the AllTyres and requires additional 4% return to compensate this perceived risk.
Mr. Newton requires you to prepare a capital budgeting analysis to show the directors in a meeting to be held soon. Based on the case study, please answer all of the following questions in your report.
1. Using the financial and qualitative information provided in the case, estimate the incremental free cash flow of this project in each year (from Year 0 to Year 4). Please show all your working.
2. The depreciation is a non-cash charge. Do you need to consider the depreciation in the capital budgeting process? Why? Explain.
3. Based on the riskiness of this project, what discount rates are you going to use to compute the net present value?
4. Mr. Newton had been told that there are various techniques for valuation such as the NPV, payback period, and discount payback period, IRR, and PI which all could be used for this project. He wants you to use all of these techniques and help Hoosier make this investment decision. Hoosiers requires the payback period is less than 3 years and discounted payback period is less than 4 years. What can you conclude from information these techniques provided. Based on your analysis, should Hoosier accept this project? Show all your working.
5. Recently, Mr. Newton received another project proposal, ‘X-tyre’ which has the similar overall risk as the OutstandingTread. This project is expected to generate NPV for Hoosier $300 million in total and will operate for 10 years. If the OutstandingTread and X-Tyre are mutually exclusive projects, which project should Hoosier choose?
In: Finance
Zylex Corporation has multiple factories across the United States. The upper management at Zylex evaluates each factory based on the capital turnover ratio from the DuPont system. The following is information for the factory in Pennsylvania for the past year.
| Sales | $ | 3,600,000 | |
| Operating expenses | 1,200,000 | ||
| Total assets (prior to subtracting accumulated depreciation) | 8,000,000 | ||
| Accumulated depreciation | 2,000,000 | ||
|
|
|||
a. Compute the ROI for the Pennsylvania factory using total assets and assets net of depreciation.
b. Find residual income if the company expects a 25 percent return on total assets.
c. Is the Pennsylvania factory performing up to management’s expectations?
In: Accounting