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Finding Cross Over Rate

Using the following table, calculate the cross over rate between the two projects. Year 0 1 2 3 4 5 6 Project A -$500.00 $200.00 $200.00 $200.00 $100.00 $100.00 $100.00

The Income Statement

Listed below are accounts that may appear on the balance sheet or the income statement. a. equipment b. fees earned c. retained earnings d wage expense e. patent f. cost of goods sold g. common stock h. dividend payable i. accumulated depreciation j. prepaid expense k. gain on sale of short term investment l. rent re

Benefit reduction rate

Consider an income guarantee program with an income guarantee of $6,000 and a benefit reduction rate of 50%. A person can work up to 2,000 hours per year at $8 per hour. A. Draw the person's budget constraint with the income guarantee. B. Suppose that the income guarantee rises to $9,000 but with a 75% reduction rate. Draw th

Budget Lines

The U.S government spends over $15.8 billion in its Food Stamp Program to provide millions of Americans with the means to purchase food. These stamps are redeemable for food at over 160,000 store locations throughout the nation, and they can not be sold for cash or used to purchase nonfood items. a. Draw the family's budget

Accounting: Cash Budget Problem

Evaluate this scenario: The expected sales are 100,000$ during the next three months. It will make monthly purchases of 60,000$ during this time. Wages and salaries are 10,000$ per month plus 5% of the sales. The company expects to make a tax payment of 20,000$ in the first month, a 15,000$ purchase of fixed assets the secon

Tariff

The Steel Supply Corporation is an importer and distributor of Taiwanese-made, 96 piece hand-tool sets (screw drivers, wrenches, and the like). The U.S. Commerce Department recently informed the company that it will be subject to a new 25% tariff on the import cost of fabricated steel. The company is concerned that the tariff wi

Opportunity Costs

Opportunity Costs. Three University of Florida engineering students are considering operating a mobile car clinic in Gainesville, Florida, during their summer break. This is an alternative to summer employment stacking plastic cups at a local injection molding manufacturer where they would earn $10,000 each over the three-month

budget constraint, indifference curve

2 questions: 1. Martha's income is $40k/year. She can spend it on health care visits at $80/visit, or on groceries (standing for all other goods), which costs $100/bag of groceries. draw Martha's budget constraint. Using indifference curves show martha's optimum if she buys 300 bags of groceries per year. 2. Suppose M

Efficiency, surplus, price ceiling

4. Assume the market for Type I Preventive Service dental procedures in New York City is perfectly competitive and consumers have no insurance coverage. In NYC, the daily market demand for these procedures is Qd = 20,000 â?" 50P, and the industry supply is Qs = -4,000 + 100P. To help illustrate, you might want to graph these eq

Solow growth: Compute the current US investment rate (I/Y)

After reviewing the latest gures of investment rates for China and US, the US Government is considering a scal policy manoeuver to increase investment rate in US. In this question you are asked to use the Solow model to evaluate the impact of this policy change. For simplicity assume that the US is a closed economy so that

Stock Research Budget

You believe that you can earn 2% more on your portfolio if you engage in full time stock research. However, the additional trading costs and tax liability from active management will cost you about 0.5%. You have a $800 000 stock portfolio. What is the most you can afford to spend on your research?

Federal budget deficit

Explain why the United States has ran a Federal budget deficit for the majority of the last 80 years

Accounting: Estimating the Cash Budget

Robot Company sells a product for $35. Budgeted sales for the first quarter of 2010 are as follows: January $600,000 February 300,000 March 900,000 The Company collects 70% in the month of sale and 25% in the following month. 5% of all sales are uncollectible and are written off. What are the budgeted cash collections f

MEI curve and health production function

In his early work on the demand for health, Grossman (1972) found a negative relationship between income level and health. The negative effect of income on health was found only when the wage rate was held constant; thus, it was associated only with the nonwage component of income (i.e. other forms of wealth that increase total

Keynesian Treatment - Prevention of Long Recessions

2) which combination of policies are most appropriate to fight long recessions: a) an increase in government spending and taxes b) an increase in government spending and decrease in taxes c) a decrease in government spending and taxes d) a decrease in government spending and increase in taxes

Word Problems

Working Capital Management and Capital Budgeting Objective: Evaluate alternative capital projects. 10. Consider a project with the following cash flows: After-Tax After-Tax Accounting Cash Flow Year Profits from Operations 1 $799

Capital Budgeting

The Seattle Corporation has been presented with an investment opportunity which will yield end-of-year cash flows of $30,000 per year in Years 1 through 4, $35,000 per year in Years 5 through 9, and $40,000 in Year 10. This investment will cost the firm $150,000 today, and the firm's cost of capital is 8 percent. a. What is t

Finance: Capital budgeting NPV

Howell Petroleum is considering a new project that complements its existing business. The machine required for the project costs $1.8 million. The marketing department predicts that sales related to the project will be $1.1 million per year for the next four years, after which the market will cease to exist. The machine will

Cash Flows

1)Your company, RMU Inc., is considering a new project whose data are shown below. What is the project's Year 1 cash flow? Sales revenues $22,250 Depreciation $ 8,000 Other operating costs $12,000 Tax rate 35.0% a. $10,039 b. $9,463 c. $9,179 d. $9,746 e. $8,903 2)TexMex Food

Cost structure

Recent graduate was given by father a $350,000 tractor trailer. Graduate joked with friends he was making $25,000 per month in jobs while his operating costs such as fuel, insurance, etc run close to $18,000 per month. Tractor trailers similar to new graduate rent for $15,000 per month and if graduate would go to work with c

WACC help is given.

Calculating WACC Weston Industries has a debt-equity ratio of 1.5. Its WACC is 12 percent, and its cost debt is 9% percent. The corporate tax rate is 35 percent. a) What is Westonâ??s cost of equity capital? b) What is Westonâ??s unlevered cost of equity capital? c) What would the cost of equity be if the debt â?" equi

The table below is examined.

The table below details three possible alternatives to replace existing machinery. The life of each alternative is 10 years. Assuming the cost of capital is 10% , depreciation for tax purposes of capital expenditure is allowable at 30% on a declining balance basis and the effective tax rate is 45% . Determine the preferred alte

Undertake both declining balance

Undertake both a declining balance and straight -line depreciation of an item of capital expenditure of $2 million. The declining balance deprecation rate is 30%,effective tax rate is 45%, cost of capital is 10% and straight -line depreciation rate is 20%.

Hybrid and Derivative Securities

I am having a hard time grasping these concepts. A. Under the debt with warrants, find the following (1) Straight debt value (2) Implied price of all warrants (3) Implied price of each warrant (4) Theoretical value of a warrant B. On the basis of A, do you think that the

Break-even and Cash flows

You are the chair of the budgeting team at a Health Care medical center and are in the process of approving the budget for the next few years. The following proposals have been made. Proposal 1. A psychiatric facility to operate in the medical center. The facility will provide services to patients on an outpatient basis. Th

Discussion Questions

Question #1 A. How does the concept of economies of scale relate to the trend of larger group practices? B. How does the concept of economies of scale relate to the success or failure of insurance companies? C. How does the current system of financing health care affect the number of uninsured or underinsured people?

Estimation of Cost- Calculations

Joe enjoys fishing & goes out about 20 times per year. One day, Sara told him that fishing is too expensive of a hobby. She thinks he should stop going because she calculated that it costs about %28.75 for every fish he catches because he usually catches about 20 fish per trip. She says it would be much cheaper to buy fish fr