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Microeconomics Questions - Prisoners' Dilemma

1. Briefly explain whether or not the Prisoners' Dilemma has a first-mover advantage. 2. Briefly discuss the rationale for an insurance company including a deductible on a typical policy. 3. Consider sales taxes. If the goal of government is to raise tax revenue when imposing such taxes, which category of goods should t

Residual dividend model

Axel Telecommunications has a target capital structure that consists of 70 percent debt and 30 percent equity. The company anticipates that its capital budget for the upcoming year will be $3,000,000. If Axel reports net income of $2,000,000 and it follows a residual dividend payout policy, what will be its dividend payout rat

Finance

Please show works where applicable. Use the table for the question(s) below. Consider a project with the following cash flows: Year Cash Flow 0 -10,000 1 4,000 2 4,000 3 4,000 4 4,000 1) Assume the appropriate discount rate for this project is 15%. The payback period for this proje

Concept of scarcity overview

As you are getting ready for your first day of work, you realize that you have several options of how to get to the bank on Wall Street. You could drive your car and look for street parking, or you could park in a parking garage. You might even take a taxi or the subway. You must get to work, so time is scarce. Then again, you a

Residual Dividend Policy

The F. Nutt Corporation follows a strict residual dividend policy. Its debt-equity ratio is 3. a. If earnings for the year are $180,000, what is the maximum amount of capital spending possible with no new equity? b. If planned investment outlays for the coming year are $760,000, will F. Nutt pay a dividend? If so, how much

After tax cost of debt problem

The Heuser Company's currently outstanding bonds have a 10% coupon and a 12% yield to maturity. Heuser believes it could issue new bonds at par that would provide a similar yield to maturity. It its marginal tax rate is 35%, what is Heuser's after tax cost of debt? After tax cost of debt = interest rate - tax savings Aft

Illegal immigration

The subject is illegal immigration and its impacts upon the American economy. Present the economic implications (pro and con) of the current immigration situation and discuss what you would recommend as a solution(s) to this problem. This is a very open ended type of analysis and there is no one specific solution--use your ana

Incentives and Health Care

INCENTIVES AND HEALTH CARE Economists like to say that people act in accordance with the incentives they face (that is, in accordance with the rewards or punishments set up for various actions, or, if you will, in accordance with costs and benefits to various choices.) Let us use the health care system in the United States as a

Different Attitudes an Individual Has towards an Organization

Many executives will save an organizations money by not having auto insurance on the fleet of company vehicles, whereas, in their personal finances, they will carry insurance on their family car. Take something from your experience that illustrates the difference in attitude from the point of view for an individual to an organiz

Case Study

Please see the attached file. THE BUSINESS SITUATION After graduating with a degree in business from Eastern University in Campus Town, USA, Michael Woods realized that he wanted to remain in Campus Town. After a number of unsuccessful attempts at getting a job in his discipline, Michael decided to go into business for h

Ratios

Please see the attached file. The comparative statements of Villa Tool Company are presented below. VILLA TOOL COMPANY Income Statement For the Year Ended December 31 2009 2008 Net sales $1,818,500 $1,750,500 Cost of goods sold 1,011,500 996,000 Gross profit 807,000 754,500 Selling and administrative expense

AD-AS diagram - show effects of 'shocks in the economy'

Hi there: Please help with this question and provide graphs. thanks! __________________ **Consider the following series of shocks to the U.S. economy and show the effects in an AD-AS diagram (using an upward-sloping short-run aggregate supply curve). Be sure to label the curves clearly. --Shock 1: An increase in the

Engineering economy

Engineering economy questions. I need to know what formulas I need to use in order to solve the problems as well as how to solve the problems

Planning for capital investments

Tony Skateboards is considering building a new plant. James Bott, the company's marketing manager, is an enthusiastic supporter of the new plant. Alyssa Minh, the company's chief financial officer, is not so sure that the plant is a good idea. Currently the company purchases its skateboards from foreign manufacturers. The follow

Unemployment notes

I Unemployment and its natural rate. ?It can be based on current news and events. Present a news article relevant to the material of that particular week. The article should of course demonstrate or relate to a topic being covered that particular week (the topic I listed above) - a typical news article would be appropriate

Activity based costing

Parts cut off: Activity 1: expected used of cost driver (80,000 + 15,000 + 7,000)= 102,000 prints Activity 2: expected used of cost driver prints: 80,000 components prints and frame: 15,000 x 2 = 30,000 components print, mat and frame: 7,000 x 3 = 21,000 components total = 131,000 components activity 3:

Standard Costs and Balanced Scorecard

Ed Widner and Associates is a medium-sized company located near a large metropolitan area in the Midwest. The company manufactures cabinets of mahogany, oak, and other fine woods for use in expensive homes, restaurants, and hotels. Although some of the work is custom, many of the cabinets are a standard size. One such non-c

Budgetary control

LaRussa Inc. is preparing its annual budgets for the year ending December 31, 2009. Accounting assistants furnish the data shown below. Product JB 50 Product JB 60 Sales budget: Anticipated volume in units 400,000 200,000 Unit selling price $20 $25 Production budget: Desired ending finished goods units

Budgetary control

Danner Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2009. 1. Sales: Quarter 1, 28,000 bags; quarter 2, 42,000 bags. Selling price is $60 per bag. 2. Direct materials: Each bag of Snare requires 4 pound

Budgetary control and responsability accounting

Fultz Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2008. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor

Budgetary control and responsability accounting

Malone Company estimates that 360,000 direct labor hours will be worked during the coming year, 2008, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year. Fixed Overhead Costs Variable Overhead Costs Supervision $ 90,000 Indirect labor $126,000

Economics Budget Constraint & Bundle Consumption

Jon's income is $150. Good X is $2 and good Y is $2. Jon buys 50 units of X and 25 units of Y. Call this bundle K. At this bundle the marginal rate of substitution is 2. Can Jon improve himself by increasing his consumption of Y? What should he do? Please explain answers.

credit is a good use of fiscal dollar

1.Ignoring the issue of fraudulent use of the credit, what can we deduce about the elasticity of demand for houses? 2.Do you think the credit is a good use of fiscal dollars? article is attached

Managerial Economics

Please refer attached file for complete question. Graph is missing here. 1. In the following diagram, we show one of Jane's indifference curves and her budget line. a. If the price of good X is $100, what is her income? b. What is the equation for her budget line? c. What is the slope of the budget line? d. What is the

Capital Budgeting

Determining NPV and 8 year forward rate. Capital Budgeting and Financing. Cantoon Co. is considering the acquisition of a unit for the French government. Its intial outlay would be $4 million. It will reinvest all the earnings in the unit. It expects that at the end of 8 years, it will sell the unit for 12 million euros

Persuasive Memos

I need help with the following: Writing Memos Review the Purdue's OWL site on memos, make sure you review all four areas. Accessed August 12, 2009, at: http://owl.english.purdue.edu/owl/resource/590/01/ Bowman, J. P. Writing Persuasive Messages. Accessed August 12, 2009, at: http://homepages.wmich.edu/~bowman/c4e

Question on savings function

1. How would an increase in each of the following affect the consumption function? How would it affect the savings function? (a) net taxes (b) the interest rate (c)consumer optimism or confidence (d) the price level (e) consumers' net wealth (f) disposable income