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# Income Distribution

### A pricing strategy is advised.

I still need help with this question: Movie theaters generally charge the same ticket price for all movies with evening show times, regardless of popularity. This pricing strategy causes surpluses (empty theater seats) for unpopular films and shortages (turning away prospective viewers) for popular films. How can movie theate

### Lorenz curve distribution

Consider the following estimates from the 1990s of shares of income of each group. Draw a rough Lorenz curve for each country. Which has the most nearly equal distribution, based on your diagram. Country Poorest 40% Next 30% Next 20% Richest 10% Bolivia 13 21 26 40 Chile 13 20 26 41 Uruguay 22 26 26 26

### Net Profit Margin: TJX Inc. Example

What is the net profit margin for TJX Inc. if the current ratio = 2; total asset turnover =1.5; total assets = \$100,000; and EBIT = \$30,000? Assume the marginal tax rate for TJX is 40% and that interest expenses are \$10,000.

### Calculating Taxable Income: Example Question

Suppose you currently earn taxable income of \$100,000 per year. You are subject to an MTR of 50%. Currently, your ATR is 35 percent. Calculate your annual tax. Calculate the extra tax that you would pay per year if your annual income increased to \$110,00. What is your ATR when your annual income is \$110,000?

### Economics: marginal propensity to consume

Assume that Melanie had 200000 of disposable income and spent 180,000 on consumption in 2006 and had 300,000 of disposable income and spent 240,000 on consumption in 2007 If Melanie's went up to 400,000 in 2008 how munch would she be likely to spend on consumption that year? Ans: 300,000..how do you get 300,000? If Melan

### Cash Distribution and Capital Structure

Please see attached. The Henley Corporation is a privately held company specializing in lawn care products and services. The most recent financial statements are shown below. Income Statement for the Year Ending December 31 (Millions of Dollars) 2010 Net Sales \$800.0 Costs (except deprec

### One Year Return on Target Stock Purchase

You bought 100 shares of Target Corporation for \$48 each and sold it a year later for \$54. Assume total brokerage commission of \$16, dividends of 50 cents per share, and 20% tax on dividends and 20% tax on capital gain. (a) What is your one-year return in (a) \$ and (b) %?

### Reviewing Monopolies

Please make comments about these two statements. 1. A monopolist can charge whatever they want to, afterall, they are the sole supplier! 2. Monopolists should not advertise since they have no competitors and cannot benefit therefrom.

### AFN problem

A firm has the following balance sheet: Cash \$ 20 Accounts payable \$ 20 Accounts receivable 20 Notes payable 40 Inventory 20 Long-term debt 80 Fixed assets 180 Common stock

### Value of Funds Needed to Support the Retirement Annuity

An engineer planning for retirement decides that she wants to have income of \$100,000 per year for 20 years with the first withdrawal beginning 30 year from now. If her retirement account earns interest at 8% per year, the annual amount she would have to deposit 29 years beginning 1 year from now is.

### Centralizing the cash management function of a multi-national company

Re: Multinational Corporations, MNC, working capital explain what are the advantages and disadvantages of centralizing the cash management function

### standard deviation for financial data

Research the past 5 year performance for the following mutual fund: i) American Funds Growth Fund of America, Class A (AGTHX) ii) Putnam Fund for Growth and Income, Class A (PGRWX) iii) In a table, compare the data for each. What is the standard deviation? What would the value of each be if you had invested \$10,000 o

### Should an athlete, having no formal education or no apparent skills training, earn \$1 million plus annually for sweating? Defend your position using economic principles

Should an athlete, having no formal education or no apparent skills training, earn \$1 million plus annually for sweating? Defend your position using economic principles

3(a). Starting with the estimated demand function for Chevrolets given Problem 2, assume that the average value of the independent variables changes to n=225 million, i=\$12,000, Pf= \$10,000, Pg= 100 cents, A= \$250,000, and if Pi= 0. Find the equation of the new demand curve for Chevrolets. (b)* Revised 3(b): If Pc is \$10,000

### Estimating Return on Total Assets

Use the following data from a firm's pro forma (i.e., projected or forecasted) financial statements to calculate the following profitability ratios for the firm, assuming that all stocks are common stocks:(a) net profit margin; (b) return on total assets; (c) return on equity; (d) price-earnings ratio. Sales \$150 million Net inc

### FINANCE QUESTION

4. How much will a 15% increase in sales increase a firm's net operating income (NOI) and increase its net income (NI), if: (a) its degree of operating leverage (DOL) = 2.0, and its (b) degree of financial leverage (DFL) = 3.0? (b) its (c) DOL = 1.5 and DFL = 2.0?

### Finance problem

(a) Identify and describe two aspects of firms' credit policy. (b) Identify one difference in the credit policies of different firms and explain why this difference may be important to consumers. (c) Can a firm's credit policy hurt it? Explain. (d) Explain why many large firms (e.g., Sears Depa

### Calculating Expected Return: Example Problem

If the market has an expected return of 10%, a standard deviation of 20% and the risk-free rate is 4%, what proportion of your money should be invested in the market if you want an expected return of 16%? A. 75% B. 160% C. 200% D. It is impossible to get an expected return of 16% in this situation

### Expected Dividend Payout Ratio

Flavortech Inc. expects EBIT of \$2,000,000 for the current year. The firm's capital structure consists of 40 percent debt and 60 percent equity, and its marginal tax rate is 40 percent. The cost of equity is 14 percent, and the company pays a 10 percent rate on its \$5,000,000 of long-term debt. One million shares of common stock

### Find ROE

Last year, Urbana Corp. had \$197,500 of assets, \$307,500 of sales, \$19,575 of net income, and a debt-to-total assets ratio of 37.5%. The new CFO believes a new computer software application will enable it to reduce costs and thus raise net income to \$33,000. Assets, sales, and the debt ratio would not be affected. By how much wo

### Income vs substitution effects

Managers are very interested in how a consumer makes a choice among alternatives. In this exercise, we ask you to consider the amount of money you spend purchasing gasoline to operate your automobile for a month and any alternatives available to you assuming your net income available to make those purchases. Also assume gasoline

### The Lorenz curve

What would the Lorenz curve look life if income were equally distributed? Could the curve ever bow upward above the line of income eqaulity?

### When Should a Merger be Undertaken?

The Clark Corp desires to expand. It is considering a cash purchase of Kent enterprises for \$3 million. Kent has a \$700,000 tax loss carryforard that could be used immediately by the Clark Corporation, which is paying taxes at the rate of 30%. Kent will provide \$420,000 per year in cash flow (aftertax income plus depreciation)

### Statement of cash flow

The financial statements of PepsiCo are presented at the company's website, www.pepsico.com. Instructions Refer to PepsiCo's financial statements, and answer the following questions. (a) What was the amount of net cash provided by operating activities for the year ended December 31, 2005? For the year ended Decembe

### Statement of Cash Flows

Please see the attachment. The income statement of Elbert Company is presented here. ELBERT COMPANY Income Statement For the Year Ended November 30, 2008 Sales \$7,700,000 Cost of goods sold Beginning inventory \$1,900,000 Purchases 4,400,000 Goods available for sale 6,300,000 Ending inventory 1,400,0

### Statement of Cash Flows

Please see the attachment. The following account balances relate to the stockholders' equity accounts of Gore Corp. at year-end. 2008 2007 Common stock, 10,500 and 10,000 shares, respectively, for 2008 and 2007 \$160,000 \$140,000 Preferred stock, 5,000 shares 125,000 125,000 Retained earnings 300,000 260,000 A

### Planning for capital investments

The Three Stooges partnership is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Moe Project Larry Project Curly Capital investment \$150,000 \$160,000 \$200,000 Annual net income: Year 1 13,000 18,

### Payback period for an asset

Determine the payback period for an asset that has a first cost of \$40,000, a salvage value of \$8000 anytime within 10 years of its purchase, and generates income of \$6000 per year. The required return is 8% per year. Need to show excel problem.

### Short Run Average Cost Curve

I need the following three questions answered. Please try to associate each scenario with real-world examples. 1. Explain what could cause a shift in the short run Average Cost curve from SAC1 to SAC3. Does this scenario apply to products made by your firm? Figure 1: short run average cost curves 2. Discuss the di

### Calculate working capital, ratio, ROE, ROI

Dec 31,1999 Dec 31, 1998 Net Sales \$8,645,561 \$7,467,925 COGS \$6,745,744 \$5,921,651 Operating Income \$595,670 \$494,227 Net Income \$427,944 \$346,399 Assets