Data concerning Sumter Corporation's single product appear below:

Fixed expenses are $1,024,000 per month. The company is currently selling 8,000 units per month.

Required:

Management is considering using a new component that would increase the unit variable cost by $6. Since the new component would improve the company's product, the marketing manager predicts that monthly slaes would increase by 300 units. What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected? Show your work!

ABC and XYZ are two identical firms except for their capital structure. The share price for both of firms is $10. ABC is an all equity firm. XYZ has D/E of 0.8. Investor A bought 100 shares of XYZ with his own money since he believes the levered firm will provide better return. If you decide to use homemade leverage to show him that leverage doesn’t matter, what would be your trading strategy? Please be specific (i.e. how much money of your own will be used, how much money you will borrow, and which firm’s share you are going to buy, etc.) Assume all assumptions hold for homemade leverage.

a college produces and sells two types of delivery for accounting classes, Daytime Delivery & Online Delivery. The company records show the following monthly data relating to these two programs:

Determine the sales mix based on Sales units as a % (or decimal)

      Daytime _________ Online __________                  

(a) Determine the weighted-average contribution margin ratio.

(b) Determine the monthly sales in $ to break even.

(c) Determine how the number of registrations of each type of program are sold at the breakeven point.

Round to a whole unit.

______________Daytime

________________Online

(3) The US produces about 12 million barrels of oil per day and consumes about 22 million barrels per day (mbpd). Global production and consumption are about 100 mbpd. About 0.75 mpbd come from federal land, and about 1.75 mbpd come from federal waters (primarily the Gulf of Mexico). The current oil price is about $50, the elasticity of oil supply is 0.1 and the elasticity of oil demand is -0.2.

a. Using these numbers, calculate the long-term effect on prices and quantities of banning drilling on federal land.

b. Using these numbers, calculate the long-term effect on prices and quantities of banning drilling on federal land and federal waters.

1. Consider two companies A and B sharing a market by producing identical goods (or highly substitutable goods). Company A’s marginal cost is MC=20 and company B’s marginal cost is MC=10. Market demand is known to be P=100-0.001Q.

1. Find profit maximizing level of Q_A and Q_B under oligopoly setting.
2. Determine the market price.
3. Determine the revenue of company A and B.
4. Determine the profit of company A and B.
5. Find collusive level of profit maximizing output for A and B (Under collusion A and B share the same MC=10 and share the market equally).
6. Using a simple game theory method, show that the collusive outcome is not sustainable. Be sure to construct a 2x2 matrix with correct payoffs.

5. Microsoft Corporation decides how many packets of the new operating system (Windows Vista) it is going to sell on the market. The research (fixed) costs associated with the development of the new system amounts to F = $1000. The variable costs of the packet is negligible C(y) = 0. Microsoft’s inverse demand for the new operating system is given by P (y) = 100 − y. • Assume that Microsoft cannot discriminate among its customers. Find geometrically and analytically the level of sales that maximizes profit, the market price, and the maximal profit.

• Find the deadweight loss (DWL) geometrically and analytically.

• Find the elasticity of the demand at the optimal level of production. Is the monopolistic firm operating on elastic or inelastic part of the demand?

Question text The price of British Pounds "in US dollars" was 1.5355 last month and is 1.5347 today. Which of the following is TRUE given this information? Select one: a. The value of the US dollar has not changed with respect to the British Pound. b. The British Pound has lost value against the US dollar. c. Turning 100 British Pounds into US dollars today would give you approximately one more dollar compared to the amount of you would have received last month. d. Today, $1000 US dollars would give you approximately 1,535 British Pounds. e. Today, 1000 British Pounds can be converted into approximately $652 US dollars.

(A) Suppose that the 6-month US Treasury bill rate is equal to 5.98%, and the forward rate on a 6-month Treasury bill 6 months from now is 7.88%. (Both are in yearly terms).

What is the 1-year bill rate? (Keep your answer to 4 decimal places, e.g 0.1234)

(B) Consider two 5-year bonds: one has an 6% coupon rate and sells for $98; the other has an 9% coupon rate and sells for $103. What is the price of a 5-year zero coupon bond? (Assume that coupons are paid annually, and the face values of all the bonds are $100.)

(Keep your answer to 2 decimal places, e.g. xx.12.)

1. A charter flight charges a fare of $200per person plus an additional $4 per person for each unsold seat on a plane that holds a maximum of 100 passengers. Let x represent the number of unsold seats.

a)Express the number of passengers on the flight as a function of x. Call this functionQ(x).

b)Express the price per ticket on the flight as a function of x. Call this functionP(x)

c)Express the total revenue received for the flight as a function of x. Call this functionR(x)

d)Find the number of unsold seats that will produce the maximum revenue as well as what the maximum revenue is (rounded to the nearest cent). Explain how you found your answer using complete sentence