A $5,000 payment is owed from Abby to Ben two years from now. Abby wants to set up an investment fund to meet this obligation, but the only investments she has available are a money market fund (currently earning 8%, but the rate changes daily), and a five-year zero-coupon bond earning 8%. Use an immunization framework to determine the amount of money Abby should invest now in each of the two investment vehicles. Assume an effective annual interest rate of 8% for present value calculations.
In: Finance
A rare earth element known as dysprosium has unique magnetic properties that make it a mandatory input in the manufacturing of wind turbines. All current mines for dysprosium have been exhausted. The last known location for this element is in a mountain range in China. The input costs associated with mining this remaining source of dysprosium are expected to be significantly higher than the input costs of previous mining operations. Using the supply and demand model, explain the changes you expect to happen (1) in the market for dysprosium and (2) the market for wind turbines.
In: Economics
The Mundell-Fleming model take the world interest rate i* as an
exogenous variable. What happens when this variable changes. Which
causes might drive the world interest rate up?
Assume that the world interest rate rises. What happens in the
foreign exchange market and the money market, under a fixed
exchange rate? Show graphically effects to aggregate income, the
exchange rate, and the trade balance, and give a brief
explanation.
How do authorities control the trade balance under a fixed exchange
rate?
In: Economics
Question 1. True or false. why?
Operating leverage is used as a measure of the sensitivity of profits to changes in sales.
High operating leverage results in low volatility of profits
High degree of operating leverage provides significantly higher profits when sales are increasing.
Companies with higher proportion of fixed costs in their cost structure tend to have higher degrees of operating leverage.
Management of companies can sometimes influence its degree of operating leverage.
McDonald’s is likely have a higher degree of operating leverage than Volkswagen.
In: Accounting
Expenditure on housing is one of the major expenses individuals face in their lifetime. However, over the last 20 years, housing prices have fluctuated quite considerably. You have been hired by a consumer affairs think-tank and tasked with producing an economic analysis explaining economic reasons why housing prices fluctuates over time (last 20 years) and its impact on relevant markets in the economy. Finally discuss some of the welfare implications (think of consumer and producer surplus) of changes in housing prices.
In: Economics
Using the concepts in Chapter 12 of textbook: Crafting and Executing Strategy The Quest for Competitive Advantage 21e by Thompson/Peteraf/Gamble/Strickland, describe the corporate culture within one famous organization (Apple, Unilever, Uber) that you know well. What effects do the nature and condition of THIS organizational culture have on THIS organization's strategy? What would you like to see happen that would improve its contribution to the organization's competitive advantage, and what mechanisms or measures would you recommend to THIS organization's leadership for promoting such changes?
In: Economics
What determines the equilibrium price level and real GDP? In the short run, a shift in aggregate demand establishes a new, but temporary, equilibrium along the short-run aggregate supply curve. TRUE or FALSE? Please Explain your Answer. In the long run, the short-run aggregate supply curves shifts so that changes in aggregate demand determine the price level but not the equilibrium level of output or real GDP. TRUE or FALSE? Please explain your answer. Propose three functions of the Federal Reserve System (“the Fed”).
In: Economics
Two independent companies, Denver and Bristol, each own a warehouse, and they agree to an exchange in which no cash changes hands. The following information for the two warehouses is available:
| Denver | Bristol | |
|---|---|---|
| Cost | $90,000 | $45,000 |
| Accumulated depreciation | 55,000 | 25,000 |
| Fair value | 30,000 | 30,000 |
Required:
| 1. | Assuming the exchange has commercial substance, prepare journal entries for both Denver and Bristol to record the exchange. |
| 2. | Assuming the exchange does not have commercial substance, prepare journal entries for both Denver and Bristol to record the exchange. |
In: Accounting
The increasing number of women in leadership positions and women in academia brought about by dramatic changes in American society have fueled the now robust scholarly interest in the study of leadership and gender. This chapter explores empirical evidence related to the issues of gender and leadership by discussing the gender gap in leadership and prominent explanations for it, and addressing approaches to promoting women in leadership.
1) What are the strengths and criticism of this approach?
2) What are the differences between female and male leadership styles?
3) Describe the Leadership Labyrinth and provide examples?
In: Operations Management
Assume that you’ve owned and operated a very successful elite seafood restaurant in a rather small strip mall for several years. A Red Lobster chain seafood restaurant is just about to open across the street from you in another strip mall. Explain how this may affect your total revenue, marginal revenue, marginal cost, and total cost. In other words what, if any, changes would you have to make to what, how, and how much you produce to remain competitive
In: Economics