New Classical Economics (rational expectations) and New Keynesian Economics are similarly rooted in original Classical and Keynesian economics. Explain and illustrate how these latest manifestations of two diametrically opposed positions, the New Classical rational expectations model and the new Keynesian model: (1) remain true to their respective Classical and Keynesian roots about the inherent stability of the macro economy and the effectiveness of demand management; and (2) at the same time altered the traditional Classical and traditional Keynesian analysis.

NEW PROJECT ANALYSIS

You must evaluate a proposal to buy a new milling machine. The base price is $163,000, and shipping and installation costs would add another $18,000. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $65,200. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The machine would require a $3,000 increase in net operating working capital (increased inventory less increased accounts payable). There would be no effect on revenues, but pretax labor costs would decline by $57,000 per year. The marginal tax rate is 35%, and the WACC is 14%. Also, the firm spent $5,000 last year investigating the feasibility of using the machine.

1. How should the $5,000 spent last year be handled?
   1. Last year's expenditure is considered as a sunk cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis.
   2. The cost of research is an incremental cash flow and should be included in the analysis.
   3. Only the tax effect of the research expenses should be included in the analysis.
   4. Last year's expenditure should be treated as a terminal cash flow and dealt with at the end of the project's life. Hence, it should not be included in the initial investment outlay.
   5. Last year's expenditure is considered as an opportunity cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis.
   
   -Select-IIIIIIIVVItem 1

2. What is the initial investment outlay for the machine for capital budgeting purposes, that is, what is the Year 0 project cash flow? Round your answer to the nearest cent.
   $

3. What are the project's annual cash flows during Years 1, 2, and 3? Round your answer to the nearest cent. Do not round your intermediate calculations.

   Year 1 $

   Year 2 $

   Year 3 $

4. Should the machine be purchased?
   -Select-YesNoItem 6

#30 Oxygen Optimization is considering buying a new purification system. The new system would be purchased today for 17,800 dollars. It would be depreciated straight-line to 1,200 dollars over 2 years. In 2 years, the system would be sold and the after-tax cash flow from capital spending in year 2 would be 1,900 dollars. The system is expected to reduce costs by 6,800 dollars in year 1 and by 14,200 dollars in year 2. If the tax rate is 50 percent and the cost of capital is 6.39 percent, what is the net present value of the new purification system project?

#31 Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for 18,400 dollars. It would be depreciated straight-line to 1,400 dollars over 2 years. In 2 years, the oven would be sold for an after-tax cash flow of 2,800 dollars. Without the new oven, costs are expected to be 13,600 dollars in 1 year and 18,100 in 2 years. With the new oven, costs are expected to be 1,700 dollars in 1 year and 14,300 in 2 years. If the tax rate is 50 percent and the cost of capital is 9.78 percent, what is the net present value of the new oven project?

Please help

New Business Plan – A Case Part-I Mr. Ahamed discovered an idea to start a new business venture in Oman after completion of his Business Graduation from Yale University. He wishes to study the entire economy of Oman for implementing his project in time and with proper execution. He collected data and found the following information i.e., the major earning of Oman economy is from Exports such as Crude oil and refinery, Natural Gas, Fishing, Minerals, Metals, Cement, Agriculture and Textiles etc., and domestic businesses like Fishing, Agriculture, Tourism, Real estate, Restaurant and Meat selling. As per 2018 censes the total population including other nationalities of the country is 4,829,473 million, the GDP of $ 203.959 Billion with Growth rate of 1.8% and Per- capita income is $18,970. Further he also found the up-coming projects like Fishing, Blue City, Oman Rail, Oman Khazzan Gas Project, Mina Al Sultan Qaboos Waterfront, and Modern Restaurant. Based on the above information, Mr. Ahamed wants to select the good business sector in Oman. Mr. Ahamed wishes to invest 30,000/- OMR, to develop the business venture in Oman. Mr. Ahamed decided to study the market scenario, demand and supply analysis in Oman. Based on the market demand and supply he will continue to do the business. One thing he will understand based on the information only Mr. Ahamed will start the excellent business. Assume as you Mr. Ahamed, how will give the answer for the below questions.

Questions: 1. Based on the data given which type of business should Mr Ahmed invest his money in? What are the reasons behind it? Explain.

question2. Discuss the opportunity cost of choosing the business. Explain.(3+2=5 Marks)

question3. Based on the case identify the various Central problems of economy which could be experienced while doing a business. Explain. (3+2=5 Marks)

question4. Elaborately discuss the Social Cost of the Business which Mr. Ahmed has chosen to invest in? Explain.

A company bought a new machine fot $300,000. The new machine generated revenue for $90,000 per year. Operating cost of that machine is $10,000 per year. The machine is depreciated according to 7-years MACRS method. The machine is sold for $80,000 in the middle of 6^th year of service. Determine the after tax net present worth. Assume, the after-tax MARR is 10% and income tax rate is 25% (federal and state combined).

The transactions listed below are typical of those involving New Books Inc. and Readers’ Corner. New Books is a wholesale merchandiser and Readers’ Corner is a retail merchandiser. Assume all sales of merchandise from New Books to Readers’ Corner are made with terms 2/10, n/30, and that the two companies use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed during the year ended August 31.

1. New Books sold merchandise to Readers’ Corner at a selling price of $650,000. The merchandise cost New Books $455,000.
2. Two days later, Readers’ Corner complained to New Books that some of the merchandise differed from what Readers’ Corner had ordered. New Books agreed to give an allowance of $13,500 to Readers’ Corner.
3. Just three days later, Readers’ Corner paid New Books, which settled all amounts owed.

Required:
1. For each of the events (a) through (c), indicate the amount and direction of the effect on New Books in terms of the following items. (Enter any decreases to account balances with a minus sign.)

A firm producing digital cameras considers a new investment which is about opening a new plant.

The project’s lifetime is estimated as 5 years and requires 22 million TL as investment cost. Salvage value of the project is estimated as 4 million TL (which will be received in the sixth year) However firm prefers to show salvage value only as 2 million TL. Firm uses 5-year straight line depreciation.

It is estimated that the sales will be 12 million TL next year and then sales will grow by 20% each year.

It is estimated that fixed costs will be 1.5 million next year and then will grow by 5% each year.

Variable costs are projected %10 of sales each year.

This project, in addition, requires a working capital of $ 3 million in the first year, 4 million in the second year, 4 million in third year, 3 million in the fourth year and 1.5 million in the fifth year.

Firm plans to use a debt/equity ratio of %50 in this project.

The company can borrow TL loan with an interest cost of 14% before tax. Corporate tax rate is 20%. The shares of this company in Borsa Istanbul are selling at 8 TL and the stocks have approximately market risk and have strong correlation with BIST100 index. 10- year government bond yields at %12 and market risk premium is %8.

Given this information; find the NPV and IRR of the project; is this project feasible or not?

If you want, you can solve this question using excel.

What is the result of higher WACC ? Can a company reduce its WACC ? If yes, how? Give numerical example related with this project and explain this topic briefly regarding to the capital structure theories.

A firm producing digital cameras considers a new investment which is about opening a new plant.

The project’s lifetime is estimated as 5 years and requires 22 million TL as investment cost. Salvage value of the project is estimated as 4 million TL (which will be received in the sixth year) However firm prefers to show salvage value only as 2 million TL. Firm uses 5-year straight line depreciation.

It is estimated that the sales will be 12 million TL next year and then sales will grow by 20% each year.

It is estimated that fixed costs will be 1.5 million next year and then will grow by 5% each year.

Variable costs are projected %10 of sales each year.

This project, in addition, requires a working capital of 3 million TL in the first year, 4 million TL in the second year, 4 million TL in third year, 3 million TL in the fourth year and 1.5 million TL in the fifth year.

Firm plans to use a debt/equity ratio of %50 in this project.

The company can borrow TL loan with an interest cost of 14% before tax. Corporate tax rate is 20%. The shares of this company in Borsa Istanbul are selling at 8 TL and the stocks have approximately market risk and have strong correlation with BIST100 index. 10- year government bond yields at %12 and market risk premium is %8.

Given this information; find the NPV and IRR of the project; is this project feasible or not?

If you want, you can solve this question using excel.

What is the result of higher WACC ? Can a company reduce its WACC ? If yes, how? Give numerical example related with this project and explain this topic briefly regarding to the capital structure theories.

A firm producing digital cameras considers a new investment which is about opening a new plant.

The project’s lifetime is estimated as 5 years and requires 22 million TL as investment cost. Salvage value of the project is estimated as 4 million TL (which will be received in the sixth year) However firm prefers to show salvage value only as 2 million TL. Firm uses 5-year straight line depreciation.

It is estimated that the sales will be 12 million TL next year and then sales will grow by 20% each year.

It is estimated that fixed costs will be 1.5 million next year and then will grow by 5% each year.

Variable costs are projected %10 of sales each year.

This project, in addition, requires a working capital of 3 million TL in the first year, 4 million TL in the second year, 4 million TL in third year, 3 million TL in the fourth year and 1.5 million in the fifth year.

Firm plans to use a debt/equity ratio of %50 in this project.

The company can borrow TL loan with an interest cost of 14% before tax. Corporate tax rate is 20%. The shares of this company in Borsa Istanbul are selling at 8 TL and the stocks have approximately market risk and have strong correlation with BIST100 index. 10- year government bond yields at %12 and market risk premium is %8.

Given this information; find the NPV and IRR of the project; is this project feasible or not?

What is the result of higher WACC ? Can a company reduce its WACC ? If yes, how? Give numerical example related with this project and explain this topic briefly regarding to the capital structure theories.

"The Bindler-Ball Healthcare Model: A New Paradigm for Health Promotion" discusses a new model for child health nursing. Provide a brief summary of the article and evaluate the merits of the model. If a health care organization decided to implement this model, what types of communication would need to happen to make the implementation a success?