Suppose you have experienced two types of banks one being Islamic and the other one as conventional. Based on this;
(a) What key differences and major issues of both types would share with your friend?
(b) What main reasons would you emphasize in order to help your friend to either choose Islamic or conventional bank?

Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant and the purchase of the equipment necessary to produce the diet drink will cost $24.00 million. The plant and equipment will be depreciated over 10 years to a book value of $1.00 million, and sold for that amount in year 10. Net working capital will increase by $1.26 million at the beginning of the project and will be recovered at the end. The new diet drink will produce revenues of $8.56 million per year and cost $1.91 million per year over the 10-year life of the project. Marketing estimates 12.00% of the buyers of the diet drink will be people who will switch from the regular drink. The marginal tax rate is 24.00%. The WACC is 14.00%. Find the NPV (net present value).

Discuss the tradeoffs between stability & growth presented by the use of fiscal & monetary policies. Discuss arguments in favor of & opposed to the use of discretionary policy to manage the business cycle. Provide at least one example of each.

1. explain the rise of anti-trust laws in the late 19^th
2. How did anti-trust laws shift after WW1? (WW1 ended in 1918)
3. What does the documentary mean that anti-trust laws depend on politics more than any other area of law?

Filer Manufacturing has 7267875 shares of common stock outstanding. The current share price is $32.39, and the book value per share is $7.24. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $47531801, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $59428034, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par. The most recent dividend was $0.71 and the dividend growth rate is 0.06. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 0.38. What is Filer's aftertax cost of debt? Enter the answer with 4 decimals (e.g. 0.2345)

You must evaluate the purchase of a proposed spectrometer for the R&D department. The base price is $70,000, and it would cost another $10,500 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $17,500. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The equipment would require a $13,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $40,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 40%.

What are the project's annual cash flows in Years 1, 2, and 3? Round your answers to the nearest cent.

Part A) Which is NOT an IPO puzzle?

1. Huge price spikes in the first couple trading days
2. Underperformance in the long run
3. Extreme IPO market cycles
4. Hiring underwriters to do the job

Part B) Which is NOT an SEO puzzle?

1. Negative market reaction on average upon SEO announcements
2. Long-run underperformance
3. Very costly to hire underwriters
4. Extreme SEO market cycles

With regard to the queueing system, please answer the following questions:

a.   Identify 4 (four) measures of performance of the queueing system.
b.   Which measure is considered the most important for the service company? Why?
c.   Referring to the Dupit case as discussed in class, please state at least 2 (two) recommendations that can effectively shorten the waiting time in the queue, Wq. How do you choose the best recommendation? Which factors do you consider? Explain.

Explain income elasticity of demand? Discuss how can it be used to determine whether a good is a normal good or an inferior good?

PART B

The RBA intends to use open market operations in addition to reducing the cash rate.

Assume that a bond with no expiration date pays a fixed $300 annual interest and is selling for its face value of $10,000.

1. Calculate the interest yield on the bond.

2. Will the RBA buy or sell bonds if it uses open market operations? Briefly explain.

3. As a result of the RBA’s decision above which of these two outcomes is more likely or correct?

1. The market value of the bond will increase to $15,000 OR
2. The market value of the bond will decrease to $6,000.

Explain your answer by calculating the new interest yield after the RBA’s open market operations; show your workings.

Briefly describe the dynamic of groupthink.

QUESTION TWO

PART A

The following two economic events impact on the value of the Australian dollar in the foreign exchange rate market.

Speculators believe that the price of Australian exported commodities (iron ore, coal) will increase and at the same time Australian households and firms purchase less imports.

REQUIRED:

Explain the effect of the above economic conditions on the demand for and supply of Australian dollars and the change in the value of the Australian dollar (AUD) in the foreign exchange rate market (Note: a diagram is not required for this question).