Your firm has a $10,000 par value U.S. Treasury bond with 30 years to maturity, annual coupon rate of 3.00% with semiannual coupon payments. Assume that the market annual yield to maturity on 30-year “T” bonds, found in the US Treasury Yield curve, is 3.04%.

What should the asked price (price you would pay) be for the bond?

Assume: YTM from US Treasury Yield Curve = 3.04% or semiannual rate = 1.52%

         Hint:

V_B =

If the 30 US Treasury Bond rate jumps immediately to 4.5%, what is the new price for the 30-year “T” bond? How much, in percent, would you lose or gain if you had purchased the bond in part A.

V_B = 150 (32.748953) + 10,000(0.263149)

      =$4,912.34 + 2,631.49= $7,543.83

Gain/Loss%=(price@ r= 4.5%) - (price@ r= 3.14%)/(p

The United States claims that Canada subsidizes the production of softwood lumber and that imports of lumber damage the interests of US producers.  The United States has imposed a high tariff on Canadian imports to counter the subsidy.  Canada is thinking of retaliating by refusing to export water to California.  The following table shows the payoff matrix for the simultaneous game that Canada and the US are playing

a.       What is the US’ optimal strategy? Why?

b.       What is Canada’s optimal strategy? Why?

c.       What is the outcome of the game? Explain.

d.       Is this game like a Prisoner’s Dilemma game or different in some crucial way? Explain.

e.       Which country would benefit more from a free trade agreement (where only the strategy of “no tariff” is allowed)?

Shipping R US (LESSEE) leased an ocean-liner freighter from Viking Ships (LESSOR). The lease is non-cancelable, requires beginning of the year (annuity due) payments for three years and at the end of the lease lessee returns the ship to the lessor. Shipping R US's incremental borrowing rate is 6%, but knows that Viking Ships used a 3.5% present value discount rate in determining the present value of the three annual lease payments, which total $6,000,000. Viking Ships manufactured the ocean-liner freighter, the freighter's fair value at the beginning of the lease is $5,500,000 and its estimated useful life is 10 years. Shipping R US is required to pay all executor costs, such as insurance, maintenance and taxes and did not guarantee the residual value of the ocean-liner freighter. Shipping R US uses the straight-line depreciation method for all of its depreciable assets.

GOODNESS OF FIT WORKSHEET

The following is a quote from the Mars Company, maker of M&M candies:

We can assure you that the colors are blended mechanically according to the formula. Our present means of color dispensing should place a fairly uniform blend of colors in every package; however, occasionally an unusual assortment of colors may appear.

The theoretical percentages of each color (as given by the M&M company) are:

1. Each student will need to buy a package of regular colors, Milk Chocolate M&M’s (plain or peanut) that is at least 4 oz. (colors of red, yellow, green orange, blue, brown) to be used for this project. All students will complete this test for your individual bag of M&Ms to receive credit   You will then report your test results (reject or fail to reject Ho) and numbers to your group leader.

2. The group leader will total the group values and will sum the colors. After working as a group to complete this test using the group totals, the leader will post the group results and the decision results of each individual in the group (reject or fail to reject Ho). Only the names of individuals that submit their test results to the group leader will be included on the group posting for credit.

You will conduct a goodness of fit test to determine whether your and the group frequency numbers for each color “fit” the expected values. Remember to complete your individual test first then send your results and numbers to the group leader. Be sure and work with the group leader to complete the group test. Use a significance level of 0.05.

1. Determine the expected values for all colors of the M&Ms. Use the number of M&Ms from the whole group (when doing the group test). Be sure you use the correct type of M&M given percentages (plain or peanut).

2. Write the null and alternate hypotheses. Remember these two statements must include all possible outcomes.

Ho:                                    

H₁:

3. Find the Chi-square critical value.

4. Compute the test statistic value.

5. What is the statistical decision about null hypothesis?

6. Write a conclusion about the Mars Company’s claim regarding the colors of the M&Ms by interpreting your decision in Question 6.

You run a company, GizmoNet, that produces gizmos. Gizmos hook onto iPhones, allowing users to access the internet via a virtual reality interface.

Your company hires software engineers, who are employed for three periods. In period one, they must train at GizmoNet. In this period their total productivity is $10 million, and training costs are $8 million. In periods two and three (after the training) productivity is $17 million and $19 million, respectively. An engineer who received no training would have productivity of $10 million at any other firm in all three periods.

Engineers can quit after training (and always get a job offer at other firms). If they do so, their productivity at other firms is $2 million lower than at GizmoNet in each of the last two periods. Assume no discounting.

b. (10 points) Suppose that the labor market is competitive, so that the firm

must earn zero profit from hiring an engineer. If so, what set of salaries

? , ? , ? must the firm offer to guarantee that the total return on the123

training investment is maximized? To choose an answer if you have more than one possibility, pick the feasible solution that maximizes ? (because

software engineers are impatient and risk averse, so ceteris paribus they prefer to be paid as soon as possible).
Hint: first figure out what has to happen to maximize the return on investment. The figure out any constraints on pay, etc. Only then figure out who should invest and get the return (worker or firm), and to what extent.

c. (5 points) In an economic sense (rather than accounting), who pays for the training investment, and who earns the return on the investment? Briefly explain.

______     6.      You are trying to decide whether to run your business as a corporation or as an individual owner (for example, as a “sole proprietorship”). One of the factors is the problem of double taxation. Assume that the corporate income tax rate is 35%, the individual income tax rate on dividend income is 15%, and the individual income tax rate on other income is 39.6%. (Note – use these tax rates. Don’t use the actual tax rate schedule.) The business is expected to generate $625,000 of taxable income. Similar to the example given in class, assume that the amount of dividend income is equal to the corporate after-tax cash flow. How much more after-tax cash flow will you have if you run the business as a sole proprietorship rather than as a corporation? Hint: fill out the following table to help answer the question.

______     7.      You are trying to decide whether to run your business as a corporation or as an individual owner (for example, as a “sole proprietorship”). One of the factors is the problem of double taxation. Assume that the corporate income tax rate is 35%, the individual income tax rate on dividend income is 15%, and the individual income tax rate on other income is 39.6%. (Note – use these tax rates. Don’t use the actual tax rate schedule.) The business is expected to generate $720,000 of taxable income. Similar to the example given in class, assume that the amount of dividend income is equal to the corporate after-tax cash flow. How much more after-tax cash flow will you have if you run the business as a sole proprietorship rather than as a corporation? Hint: fill out the following table to help answer the question.

Please write a short paragraph about your interest in pursuing a M.B.A. degree at XYZ UNIVERSITY.

What are the theoretical framework and conceptional framework for "Student’s satisfaction with the education services provided by the University" research?

Please describe Sarbanes-Oxley legislation.

How it may have an effect on the University Flea Market

Why work?” discuss the role “life energy” plays in going to university and choosing a meaningful career.