Consider a hotel which can supply an unlimited number of hotel rooms at the constant marginal cost c = 20 per room per night, so that the hotel’s total cost function is given by C(q) = 20q.1 Assume that demand for hotel rooms in Tallahassee takes two possible values: on game days, demand is described by the demand curve q = 100 − p, while on non-game-days demand is described by the demand curve q = 60 − 2p.
First suppose that the hotel acts as a price taker.
(a) What does it mean for the hotel to act as a price taker? What condition determines a price taker’s optimal supply decision?
(b) Assuming the hotel acts as a price taker, what will be the equilibrium price and quantity sold on game days? What about on non-game-days? (Remember, the hotel’s marginal cost is constant!)
(c) Briefly discuss, without solving, how your results in (b) would change if the hotel instead had increasing marginal costs (say for example MC(q) = qrather than MC = 20).
In: Economics
the balance sheet at the end of each of the first 2
years of operations indicate the following
2012.
2011
total current assets. 600000.
560000
total
invest.
60000.
40000
property plant & equip. 900000.
700000
current
liab.
125000.
65000
long term liab.
350000.
250000
preferred 9% stock 100 par. 100000. 100000
common stock 10 par.
600000. 600000
paid in capital in excess of par common stock
75000.
75000
retained earnings.
310000. 210000
If net income is 115000 and interest expense is 30000 for 2012 and the market price is 30 what is the price earnings ratio on common stock for 2012 round intermediate calc. to 2 decimal places and final answers to 1 decimal place
In: Accounting
11.1.2 FINANCIAL MANAGEMENT [100]
QUESTION ONE [20]
Pukri Ltd is deciding whether to pay out R90 000 in excess cash in the form of an extra dividend or a share repurchase. Current profits are R2,40 per share and the share sells for R20. The abbreviated balance sheet before paying out the dividend is: Equity 240 000 Bank/cash 90 000 Debt 160 000 Other Assets 310 000 400 000 400 000 Evaluate each alternative (i.e: pay the dividend or repurchase the shares) by:
1.1 Calculating the number of shares in issue (4)
1.2 The dividends per share (for the first alternative, i.e. pay the dividend) (2)
1.3 Calculate:
1.3.1 The new share price (6)
1.3.2 The EPS (4)
1.3.3 The price-earnings ratio
In: Finance
The selling price per vehicle is $28,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units.There are no price, efeciency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.
Prepare April and May 2017 income statements for Speedy Motors under absorption costing. Complete the top half of the income statement for each month first, then complete the bottom portion.
DATA APRIL MAY
Beginning Inventory 0 100
Production 500 400
Sales 400 460
Variable costs:
Manufacturing cost $8500 $8500
per unit produced
Operating cost/unit sold 3400 3400
Fixed Costs:
Manufacturing Costs $2000000 2000000
Operating Costs 725,000 725,000
(marketing)
In: Accounting
1.Suppose that you will receive annual payments of $14,000 for a period of 10 years. The first payment will be made 5 years from now. If the interest rate is 5%, what is the present value of this stream of payments?
a.What is the present value?
2.A store offers two payment plans. Under the installment plan, you pay 25% down and 25% of the purchase price in each of the next 3 years. If you pay the entire bill immediately, you can take a discount of 8% from the purchase price. Assume the product sells for $100.
a-1. Calculate the present value of the payments if you can borrow or lend funds at an interest rate of 5 percent.
b-1. Calculate the present value if the payments on the 4-year installment plan do not start for a full year.
In: Finance
Consider the following cost data for a perfectly competitive firm:
| Output (Q) | Total Fixed Cost (TFC) | Total Variable Cost (TVC) |
| 1 | 100 | 120 |
| 2 | 100 | 200 |
| 3 | 100 | 290 |
| 4 | 100 | 430 |
| 5 | 100 | 590 |
a. If the market price is $140, how many units of output will
the firm produce in order to maximize profit in the short
run?
b. Find out economic profit or loss at the short-run profit
maximizing output level.
c. What will be the price and quantity in the long run
equilibrium?
Use illustration where possible
In: Economics
Suppose that a 1-year zero-coupon bond with face value $100 currently sells at $86.85, while a 2-year zero sells at $78.61. You are considering the purchase of a 2-year-maturity bond making annual coupon payments. The face value of the bond is $100, and the coupon rate is 10.5% per year.
a. What is the yield to maturity of the 2-year zero?(Do not round intermediate calculations. Round your answers to 3 decimal places.)
b. What is the yield to maturity of the 2-year coupon bond? (Do not round intermediate calculations. Round your answers to 3 decimal places.)
c. What is the forward rate for the second year?
(Do not round intermediate calculations. Round your final
answer to 2 decimal places.)
d. If the expectations hypothesis is accepted,
what are (1) the expected price of the coupon bond at the end of
the first year and (2) the expected holding-period return on the
coupon bond over the first year? (Do not round intermediate
calculations. Round your answers to 2 decimal places.)
e. Will the expected rate of return be higher or lower if you accept the liquidity preference hypothesis?
Higher
Lower
In: Finance
Suppose that a 1-year zero-coupon bond with face value $100 currently sells at $95.43, while a 2-year zero sells at $77.31. You are considering the purchase of a 2-year-maturity bond making annual coupon payments. The face value of the bond is $100, and the coupon rate is 12.5% per year.
a. What is the yield to maturity of the 2-year zero?(Do not round intermediate calculations. Round your answers to 3 decimal places.)
b. What is the yield to maturity of the 2-year coupon bond? (Do not round intermediate calculations. Round your answers to 3 decimal places.)
c. What is the forward rate for the second year?
(Do not round intermediate calculations. Round your final
answer to 2 decimal places.)
d. If the expectations hypothesis is accepted,
what are (1) the expected price of the coupon bond at the end of
the first year and (2) the expected holding-period return on the
coupon bond over the first year? (Do not round intermediate
calculations. Round your answers to 2 decimal places.)
e. Will the expected rate of return be higher or lower if you accept the liquidity preference hypothesis?
Higher
Lower
In: Finance
Suppose that a 1-year zero-coupon bond with face value $100 currently sells at $91.89, while a 2-year zero sells at $83.37. You are considering the purchase of a 2-year-maturity bond making annual coupon payments. The face value of the bond is $100, and the coupon rate is 7% per year.
a. What is the yield to maturity of the 2-year zero?(Do not round intermediate calculations. Round your answers to 3 decimal places.)
b. What is the yield to maturity of the 2-year coupon bond? (Do not round intermediate calculations. Round your answers to 3 decimal places.)
c. What is the forward rate for the second year?
(Do not round intermediate calculations. Round your final
answer to 2 decimal places.)
d. If the expectations hypothesis is accepted,
what are (1) the expected price of the coupon bond at the end of
the first year and (2) the expected holding-period return on the
coupon bond over the first year? (Do not round intermediate
calculations. Round your answers to 2 decimal places.)
e. Will the expected rate of return be higher or lower if you accept the liquidity preference hypothesis?
Higher
Lower
In: Finance
T.C and her husband are talking one evening, and you
overhear that they are very dissatisfied with the care provided by
the physician.they believe that he has mismanaged T.C care.they are
discussing getting an attorney. they ask what u think. what do u
do?
In: Biology