Pfizer paid its stockholders a dividend of $5 per share yesterday. Today, the company announced that they plan to increase that dividend by $1.00 per share for each of the next three years. After that, they plan to keep their dividend at $8 per share forever. The variance of Pfizer’s stock is .09, the variance of the market is .04, and the correlation between Pfizer’s stock and the market is .05. The risk-free rate is 3% and the market-risk premium is 5.7%. Pfizer has $100 million shares of stock outstanding and $50 million of debt. The YTM for its is 8%. Use the dividend discount model to find the price per share of Pfizer’s stock.

(a) If your utility is represented by u(x; y) = min(x+2y; 2x+y);what
do your indi¤erence curves look like?
(b) Given your answer in (a), obtain the MRS (marginal rates of sub-
stitution).
(c) Suppose the prices of x and y are px = $3 and px = $1 and you
have 100 dollars. What would you choose?
(d) If px decreases to $1; what would you choose?
(e) Use the Slutsky decomposition to decompose the total price e¤ect
into the substitution e¤ect and income e¤ect when px decreases
from $3 to $1:

(a) If your utility is represented by u(x; y) = min(x+2y; 2x+y);what do your indi¤erence curves look like?

(b) Given your answer in (a), obtain the MRS (marginal rates of sub- stitution).

(c) Suppose the prices of x and y are px = $3 and px = $1 and you have 100 dollars. What would you choose?

(d) If px decreases to $1; what would you choose? (e) Use the Slutsky decomposition to decompose the total price e¤ect into the substitution e¤ect and income e¤ect when px decreases from $3 to $1:

Deltona, USA is a development company that currently is financed with 100 percent equity. There are 15,000 shares outstanding at a market price of $50 a share. Deltona has earnings before interest and taxes (EBIT) of $20,000. The firm has decided to issue $250,000 of debt at a rate of 8 percent and use the proceeds to repurchase shares. Theresa owns 500 shares of Deltona and wants to use homemade leverage to offset the leverage used by Deltona. Theresa should

Select one:

a. sell 133 shares and invest the proceeds into the debts of Deltona.

b. buy an additional 167 shares.

c. sell 167 shares and invest the proceeds into the debts of Deltona.

Viking InterWorks is one of many manufacturers that supplies memory products to original equipment manufacturers (OEMs) of desktop systems. The CEO recently read an article in a trade publication that reported the projected demand for desktop systems to be:

Qd_desktop = 1600 - 2P_desktop + 0.6M (in millions of units), where P_desktop is the price of a desktop system and M is consumer income.

The same article reported that the incomes of the desktop system’s primary consumer demographic would increase 4.2 percent this year to $61,300 and that the selling price of a desktop would decrease to $980, both of which the CEO viewed favorably for Viking. In a related article, the CEO read that the upcoming year’s projected demand for 512 MB desktop memory modules is:

Qd_memory = 11,200 - 100P_memory - 2P_desktop (in thousands of units), where P_memory is the market price for a 512 MB memory module and P_desktop is the selling price of a desktop system.

The report also indicated that five new, small start-ups entered the 512 MB memory module market bringing the total number of competitors to 100 firms. Furthermore, suppose that Viking’s CEO commissioned an industry-wide study to examine the industry capacity for 512 MB memory modules. The results indicate that when the industry is operating at maximum efficiency, this competitive industry supplies modules according to the following function:

Qs_memory = 1000 + 25P_memory + N where P_memory is the price of a 512 MB memory module and N is the number of memory module manufacturers in the market.

Viking’s CEO provides you, the production manager, with the above information and requests a report containing the market price for memory modules and the number of units to manufacture in the upcoming year based on the assumption that all firms producing 512 MB modules supply an equal share to the market.

Round to 2 decimals

A) Market Price for Memory Modules ($):

B) Number of units to manufacture (thousand):

How would your report change if the price of desktops were $1,080?

C) Market Price for Memory Modules ($):

D) Number of units to manufacture (thousand)

Please clearly indicate what number goes with what letter!

Viking InterWorks is one of many manufacturers that supplies memory products to original equipment manufacturers (OEMs) of desktop systems. The CEO recently read an article in a trade publication that reported the projected demand for desktop systems to be:

Qd_desktop = 1600 - 2P_desktop + 0.6M (in millions of units), where P_desktop is the price of a desktop system and M is consumer income.

The same article reported that the incomes of the desktop system’s primary consumer demographic would increase 4.2 percent this year to $61,300 and that the selling price of a desktop would decrease to $980, both of which the CEO viewed favorably for Viking. In a related article, the CEO read that the upcoming year’s projected demand for 512 MB desktop memory modules is:

Qd_memory = 11,200 - 100P_memory - 2P_desktop (in thousands of units), where P_memory is the market price for a 512 MB memory module and P_desktop is the selling price of a desktop system.

The report also indicated that five new, small start-ups entered the 512 MB memory module market bringing the total number of competitors to 100 firms. Furthermore, suppose that Viking’s CEO commissioned an industry-wide study to examine the industry capacity for 512 MB memory modules. The results indicate that when the industry is operating at maximum efficiency, this competitive industry supplies modules according to the following function:

Qs_memory = 1000 + 25P_memory + N where P_memory is the price of a 512 MB memory module and N is the number of memory module manufacturers in the market.

Viking’s CEO provides you, the production manager, with the above information and requests a report containing the market price for memory modules and the number of units to manufacture in the upcoming year based on the assumption that all firms producing 512 MB modules supply an equal share to the market.

Instructions: Enter your responses rounded to two decimal places.

Market price for memory modules: $

Number of units to manufacture: thousand


How would your report change if the price of desktops were $1,080?

Market price for memory modules: $

Number of units to manufacture: thousand


What does this indicate about the relationship between memory modules and desktop systems?

c++

#include <iostream>
#include <string>
#include <ctime>
using namespace std;


void displayArray(double * items, int start, int end)
{
        for (int i = start; i <= end; i++)
                cout << items[i] << " ";
        cout << endl;
}



//The legendary "Blaze Sort" algorithm.
//Sorts the specified portion of the array between index start and end (inclusive)
//Hmmm... how fast is it?
/*
void blazeSort(double * items, int start, int end)
{
        if (end - start > 0)
        {
                int p = filter(items, start, end);
                blazeSort(items, start, p - 1);
                blazeSort(items, p + 1, end);
        }
}
*/

int main()
{
        ////////////////////////////////////////////////////
        //Part 1:  Implement a method called filter.
        ////////////////////////////////////////////////////

        //Filter is a function that takes in an array and a range (start and end).
        //
        //Call the first item in the range the 'pivot'.
        //
        //Filter's job is to simply separate items within the range based on whether they are bigger or smaller than the pivot.
        //In the example array below, 13 is the pivot, so all items smaller than 13 are placed in indices 0-3.  The pivot is then placed at index 4, and all
        //remaining items, which are larger than the pivot, are placed at positions 5-10.  Note that the array is NOT sorted, just "partitioned" around
        //the pivot value.  After doing this, the function must return the new index of the pivot value.

        double testNumsA[] = { 13, 34.1, 43, 189, 4, 4.5, 18.35, 85, 3, 37.2, 5 };

        //The filter will place all items <= 13 to the left of value 13, and all items large than 13 to the right of 13 in the array.
        int p = filter(testNumsA, 0, 10);
        cout << p << endl; //should be 4, the new index of 13.
        displayArray(testNumsA, 0, 10);  //should display something like this:  5 3 4.5 4 13 18.35 85 189 37.2 43 34.1

        //One more example:
        double testNumsB[] = { 13, 34.1, 43, 189, 4, 4.5, 18.35, 85, 3, 37.2, 5 };
        p = filter(testNumsB, 2, 6);  //Here we are only interested in items from indices 2-6, ie, 43, 189, 4, 4.5, 18.35
        cout << p << endl; //should be 5
        displayArray(testNumsB, 0, 10); //Notice only indices 2-6 have been partioned:  13 34.1 18.35 4 4.5 43 189 85 3 37.2 5


        /////////////////////////////////////////////////////////////////////////////////
        //Part 2:  Uncomment "Blaze Sort".
        //Blaze Sort uses/needs your filter to work properly.
        /////////////////////////////////////////////////////////////////////////////////


        //Test if Blaze Sort correctly sorts the following array.
        double testNums[] = { 13, 34.1, 43, 189, 4, 4.5, 18.35, 85, 3, 37.2, 5 };

        blazeSort(testNums, 0, 10);

        displayArray(testNums, 0, 10);

        /////////////////////////////////////////////////////////////////////
        //Part 3:  Test how fast Blaze Sort is for large arrays.
        //What do you think the run-time (big-Oh) of blaze sort is?
        /////////////////////////////////////////////////////////////////////

        //Stress test:
        int size = 100; //test with: 1000, 10000, 100000,1000000, 10000000
        double * numbers = new double[size];

        for (int i = 0; i < size; i++)
        {
                numbers[i] = rand();
        }

        clock_t startTime, endTime;

        startTime = clock();
        blazeSort(numbers, 0, size - 1);
        endTime = clock();

        displayArray(numbers, 0, size - 1);
        cout << "Blaze sort took: " << endTime - startTime << " milliseconds to sort " << size << " doubles."  << endl;

QUESTION 3

Cloudsdale plc makes a wide range of motor accessories in a mass production environment. Standard costing is used to control performance and variances are incorporated into weekly management reports using the planning and operational approach. The following data relates to one of their most popular products.

1. The standards set at the beginning of the period include the following:

Selling price per unit                                                           £80

Direct materials price per kilo                                            £5

Direct materials usage per unit                                         7 kilos

Other variable costs (per unit)                                          £20

Budgeted sales (week 4)                                                    48,000 units

2. Information extracted from the reports for the first 3 weeks is given below:

3. The following information relating to actual results for week 4 is also available:

Total sales                                                                            49,000 units

Average selling price per unit                                            £75.44

Total direct materials used                                                 353,000 kilos

Total direct materials cost                                                  £1.861m

4. Revised standards (set after the 4-week period):

Materials price per kilo                                                        £5.75

Selling price per unit                                                           £78

Required:

1. Calculate direct materials and sales variances for week 4 in monetary and percentage terms, using the revised standards and including planning variances where appropriate.

2. Discuss the results over the 4 week period, commenting on those variances which you deem to be material and any trends which are evident from the results.