Refer to the table given below. Suppose that aggregate demand increases such that the amount of real output demanded rises by $7 billion at each price level.

By what percentage will the price level increase?  percent

Will this inflation be demand-pull inflation or will it be cost-push inflation?   (Click to select)   Demand-pull inflation   Cost-push inflation

If potential real GDP (that is, full-employment GDP) is $510 billion, what will be the size of the positive GDP gap after the change in aggregate demand? $  billion

If the government wants to use fiscal policy to counter the resulting inflation without changing tax rates, would it increase government spending or decrease it?   (Click to select)   Increase   Decrease

V & T Faces, Inc., would like to open a retail store in Miami. The initial investment to purchase the building is $420,000, and an additional $50,000 in working capital is required. Since this store will be operating for many years, the working capital will not be returned in the near future.

V & T Faces expects to remodel the store at the end of 3 years at a cost of $100,000. Annual net cash receipts from daily operations (cash receipts minus cash payments) are expected to be as follows:

The company’s required rate of return is 13 percent. Assume management decided to limit the analysis to 7 years.

1. What is the weakness of using the payback period method to evaluate long-term investments?
2. Assume the manager of the company wanted to live in Miami and intentionally inflated the projected annual cash receipts so that the proposal would be accepted. The proposal would otherwise have been rejected. Explain how the company’s use of a post audit would help to prevent this type of unethical behavior.

(Cash management​) As CFO of Portobello Scuba Diving​ Inc., you are asked to look into the possibility of implementing a system to expedite cash receipts from clients. Portobello receives check remittances totaling ​$28 million in a year. The firm records and processes 15, 000 checks in the same period. The National Bank of Brazil has informed you that it could provide the service of expediting checks and associated documents for a unit cost of $ 0.30 per check. After conducting an​ analysis, you project that the cash freed up by the adoption of the system can be invested in a portfolio of​ near-cash assets that will yield an annual​ before-tax return of 9 percent. The company usually uses a​ 365-day year in its financial calculations.

a. What reduction in check collection time is necessary for Portobello to be neither better nor worse off for having adopted the proposed​ system?

b. How would your solution to part a be affected if Portobello could invest the​ freed-up balances at an expected annual return of only 5 ​percent?

c. What is the logical explanation for the differences in your answers to part a and part b​?

Cool Beans is a locally owned coffeeshop that competes with two large coffee chains, PlanetEuro and Frothies. Alicia, the owner, is considering two different marketing promotions and thinks that CLV analysis will help her decide the best course of action. An average specialty coffee drink sells for $4.20 and has a margin of 76%. One promotion is providing loyalty cards to her regular customers that would give them one free specialty coffee drink after 10 regular purchases. Alicia estimates that this will increase the frequency of their purchases by 18%. Currently, her customers average buying 2 specialty drinks per week.

The second promotion is targeted at new customers. She would offer a free specialty drink to incoming college freshmen by providing a coupon with their orientation packages. Because of her location near the college, she expects that 470 students will come to Cool Beans for a free trial. Of those, she anticipates that 13% will become regular customers who will purchase at least one specialty drink each week. The cost of printing and distributing the coupons is $142.

What is the dollar margin per specialty drink served?

a) A telecommunications company enters into a contract with a customer. Under the contract, the company promises to provide to the customer 4 GB data, 300 minutes of talk time, and 500 texts for $36.

Required:

Briefly explain how the telecommunications company should account for the contract under NZ IFRS 15. You need to refer to the relevant requirements but not to any specific paragraph of NZ IFRS 15.

b) A company sells mobile phone sets for $99 each. The company’s cost of each phone set is $70. The phone set became very popular with its customers. Near

the end of the financial year, 5000 customers purchased the phone set from the company. The company allows its customers to return the phone set within 14

days if they have not unpacked the set. The return period has not expired for any phone set sold by the end of the year. The company expects, based on its

past experience, that 1% of its customers will return the phone set.

Required:

i) Prepare the journal entries in the books of the company to record the transaction.

ii) Explain why the transaction is recorded in this manner using NZ IFRS 15 requirements.

Suppose the following events occur in a particular market. Explain which shifter variable is affected, which curve shifts, and determine the effect upon equilibrium price and quantity sold. a. The price of a substitute good (in consumption) decreases. b. Consumers’ income increases and the good is inferior. c. Government regulators decide to outlaw a cost-reducing technological process in order to protect the environment. d. The price of a complement good (in production) increases. e. The price of inputs used to produce the good decrease. f. Consumers expect that the price of the good will fall in the near future. g. It is widely publicized that consumption of the good is helpful in preventing cancer.

THIS IS THE ONLY PART I NEED ANSWERED BUT YOU WILL NEED THE TOP QUESTION TO ANSWER: Suppose that a pair of events from problem 15 occur simultaneously. For each of the pairs of events indicated below, perform a qualitative analysis to predict the direction of change in either the equilibrium price or the equilibrium quantity. Explain why the change in one of these two variables is indeterminate. a. Both d and g in problem 15 occur simultaneously. b. Both b and e in problem 15 occur simultaneously. Draw the graphs.

1)

One reason that technological ideas do not seem to run into diminishing returns is because ______________.

Select the correct answer below:

technology advances more quickly than other factors of production

technology increases levels of employment throughout the economy

many workers across the economy can use a new technology or invention at very low marginal cost

all of the above

2)

A(n) _____________ production function describes a firm's, or perhaps an industry's, inputs and outputs.

Select the correct answer below:

macroeconomic

microeconomic

relative

minor

3)

Compared to several decades ago, the U.S. economy now has _______________.

Select the two correct answers below.

Select all that apply:

• near zero percent unemployment

• better-educated workers

• greater employment opportunities for individuals

• workers with access to better technologies

• 4)

• In the pattern of recessions and expansions in the economy, we call the highest point of the economy, before the recession begins, the ________.

  Select the correct answer below:

  maximum

  minimum

  peak

  trough

• 5)

• Suppose that nominal GDP increases to $30,000, and the GDP deflator increases to 108. What is real GDP? Round your answer to the nearest cent.

Orchid Biotech Company is evaluating several different development projects for experimental drugs. Although the cash flows are difficult to​ forecast, the company has come up with the following estimates of the initial capital requirements and NPVs for the projects. Given a wide variety of staffing​ needs, the company has also estimated the number of research scientists required for each development project​ (all cost values are given in millions of​ dollars). Project Number Initial Capital​ ($) Number of Research Scientists NPV​ ($) I 10 2 10.1 II 15 3 19.0 III 15 4 22.0 IV 20 3 25.0 V 30 12 60.2 a. Suppose that Orchid has a total capital budget of $ 60 million. How should it prioritize these​ projects? b. Suppose that Orchid currently has 12 research scientists and does not anticipate being able to hire more in the near future. How should Orchid prioritize these​ projects? a. Suppose that Orchid has a total capital budget of $ 60 million. How should it prioritize these​ projects? The profitability index for Project I is nothing. ​(Round to two decimal​ places.)

V & T Faces, Inc., would like to open a retail store in Miami. The initial investment to purchase the building is $420,000, and an additional $50,000 in working capital is required. Since this store will be operating for many years, the working capital will not be returned in the near future.

V & T Faces expects to remodel the store at the end of 3 years at a cost of $100,000. Annual net cash receipts from daily operations (cash receipts minus cash payments) are expected to be as follows:

The company’s required rate of return is 13 percent. Assume management decided to limit the analysis to 7 years.

1. What is the weakness of using the payback period method to evaluate long-term investments?
2. Assume the manager of the company wanted to live in Miami and intentionally inflated the projected annual cash receipts so that the proposal would be accepted. The proposal would otherwise have been rejected. Explain how the company’s use of a post audit would help to prevent this type of unethical behavior.

(Cash management​) As CFO of Portobello Scuba Diving​ Inc., you are asked to look into the possibility of implementing a system to expedite cash receipts from clients. Portobello receives check remittances totaling ​$24 million in a year. The firm records and processes 15,000 checks in the same period. The National Bank of Brazil has informed you that it could provide the service of expediting checks and associated documents for a unit cost of $ 0.15 per check. After conducting an​ analysis, you project that the cash freed up by the adoption of the system can be invested in a portfolio of​ near-cash assets that will yield an annual​ before-tax return of 11 percent. The company usually uses a​ 365-day year in its financial calculations.

a. What reduction in check collection time is necessary for Portobello to be neither better nor worse off for having adopted the proposed​ system?

b. How would your solution to part a be affected if Portobello could invest the​ freed-up balances at an expected annual return of only 6 ​percent?

c. What is the logical explanation for the differences in your answers to part a and part b​?