Walmart Inc. (symbol: WMT) common stock currently trades at $106.76per share.

Jack is considering buying a calloption on WMT. He is given the following option, which will expire on 4/17/20.

[Table 5.1 Call price]

Jill is considering buying a put option on WMT. She is given the following option, which will expire on 4/17/20.

[Table 5.2 Put price]

A. (5 pts) Indicate if the 105-strike call option is in-the-money (ITM) or out-of-the-money (OTM)?

B. (5 pts) Indicate if the 105-strike put option is in-the-money (ITM) or out-of-the-money (OTM)?

C. (5 pts) If on April 17, 2020, WMT trades at $100, explain if Jack or Jill’s trade will be profitable.

D. The 105-strike call and 105-strike put were both sold at lower prices 5 days ago. Explain in one sentencewhy both call and put options have become more expensive.

Answer the following questions based on the table below showing major smart phone market producers and their respective market shares.

1. What is the value of HHI Index of this market? Support the answer with calculations.
   
   
   
2. If LG wants to merge with HTC, then will US Justice Department block this merger if its guidelines state that HHI Index must be equal to 2100 for this industry to be competitive? Support the answer with calculations.
   
   
   
3. Will US Justice Department challenge the merger of Huawei and Nokia under the same guidelines? Support the answer with calculations.
   
   
   
4. Would Apple initiate a price reduction for its phones if it is 95% sure that the rivals will do the same, which could result in a potential $75,000 loss or in potential profit of $1.2 million if the price cut is not matched? Support the answer with calculations.
   

Businesses can buy paper from a retailer like Staples or directly from the paper-factory. Suppose retailers charge a unit price of PR = $100, while paper factories offer quantity discounts and charge a unit price PF = $120 – q for purchases of up to 60 boxes and PF = $60 on larger purchases.

Consider a business that spends $1,100 on paper.

a) Where does this business buy paper? How much paper does the business buy? Discuss.

b) In a diagram, illustrate the business’ optimal choice.

Now consider a business that spends $3,200 on paper.

c) Where does this business buy paper? How much paper does the business buy? Discuss.

d) In a separate diagram, illustrate the business’ optimal choice.

e) Suppose paper factories offer same-day delivery. What is the largest individual order a retailer will ever have to fill? Clearly explain.

f) How does your answer in part e) change if paper factories take 2 or more business days to deliver?

The Barista brothers is a small company that sells coffee from mobile barista bars at events. The brothers are discussing whether or not to sell coffee at the Saxion day of open doors. If they decide to go to the event, they need to rent a mobile barista bar at €250 a day. The labour rate for the barista who will work during the event is €20 per hour. The event will take 4 hours. They only want to sell cappuccinos, since this is the most popular drink. Prices and quantities of coffee and milk, the only 2 ingredients of a cappuccino, can be found below.    

REQUIRED:

1. What is the variable cost per cappuccino in Euros?
2. How many cappuccinos do they need to sell to break even, if they sell a cappuccino for €2,75?
3. What is the margin of safety percentage if they sell 195 cappuccinos?
4. How many cappuccinos do they need to sell to earn an after-tax net income of €200? Assume a tax rate of 25%.

Consider a consumer with preferences over two goods (good x and good y) given by

u ( x , y ) = x ⋅ y.

Given income of I and price of good yas $ P yper pound and price of good xgiven as $ P xper pound, the consumer chooses the optimal consumption bundle given as

x ∗ = I 2 P x

and

y ∗ = I 2 P y .

Given P x = $ 1per pound and P y = $ 2per pound, income I = $ 100as in table below and

(a) find the optimal consumption bundle, i.e.,

( x ∗ , y ∗ )and u ( x ∗ , y ∗ ) .

(b) Let the income change as given in the table below (in increments of one hundred dollar).

I x ∗ y ∗ $ 100 $ 200 $ 300 $ 400 $ 500 $ 600 $ 700 $ 800 $ 900

The two prices do not change. Find the new optimal consumption bundle, i.e.,

( x ∗ , y ∗ )and complete the table.

(c) Draw the income consumption curve with optimal quantity of good xon the horizontal axis and with optimal quantity of good yon the vertical axis.

40. Suppose the company E-bikes R US is the sole supplier of e-bikes. The more elastic the
demand curve faced by E-bikes R US, the monopolist
A) will have a larger Lerner Index.
B) will face a lower marginal cost.
C) will earn more profit.
D) will lose more sales as it raises its price.

41. Suppose the company E-bikes R US is the sole supplier of e-bikes. As other e-bike firms
enter the market, the market power of E-bikes R US
A) is unaffected.
B) declines.
C) increases.
D) increases according to the Lerner Index but decreases according to the price/marginal cost
ratio.

42. Suppose the company E-bikes R US is the sole supplier of e-bikes and faces the following
inverse demand function: p = 100 - 2Q, and total cost is given by TC = 16q + 2. The
deadweight loss from E-bikes R US equals
A) $21.
B) $441.
C) $882.
D) $1,764.

Steven’s Televisions produces television sets in three categories: portable, midsize, and flat-screen. On January 1, 2020, Steven adopted dollar-value LIFO and decided to use a single inventory pool. The company’s January 1 inventory consists of:

During 2020, the company had the following purchases and sales.

Assume the company uses three inventory pools instead of one. Compute ending inventory, cost of goods sold, and gross profit. (Round price index to 2 decimal places, e.g. 1.45 and final answers to 0 decimal places, e.g. 6,548.)

Make or Buy

A restaurant bakes its own bread for a cost of $160 per unit (100 loaves), including fixed costs of $37 per unit. A proposal is offered to purchase bread from an outside source for $98 per unit, plus $7 per unit for delivery.

Prepare a differential analysis dated July 7 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bread, assuming that fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bread.