Problem Set 2 – Strategy I 1. Why do price misreads (or more generally the inability to observe prices with precision) encourage firms to lower prices? [Note: assume all prices are subject to misreads.] Misreads occur when a firm are competing with no information about competitors and assumes that competitors have taken an uncooperative pricing action when in fact they are cooperative. This assumption makes the firm react in an uncooperative manner‚ lowering the price. This asymmetric information
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Quinnipiac University School of Business FIN350 Global Financial Markets & Institutions Questions & Problems Set 5 Spring 2013 1. Explain why commercial banks are regulated and describe the major pieces of legislation enacted to prevent bank failures. Financial institutions are regulated because they provide products and services that the economy needs to function efficiently. Also they function in an environment where there is a great deal of asymmetric information‚ so they
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Problem Set 1 Gmt 201 Autumn‚ 2010 1. Consider the markets for DVD movies‚ TV screens‚ and tickets at movie theaters. a. For each pair‚ identify whether they are complements or substitutes: • • • DVDs and TV screens DVDs and movie tickets TV screens and movie tickets b. Suppose a technological advance reduces the cost of manufacturing TV screens. Draw a diagram to show what happens in the market for TV screens. c. Draw two more diagrams to show how the change in the market for TV screens affects
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Week 3 Problem Set Answer the following questions and solve the following problems in the space provided. When you are done‚ save the file in the format flastname_Week_3_Problem_Set.docx‚ where flastname is your first initial and you last name‚ and submit it to the appropriate dropbox. Chapter 7 (pages 225–228): 1. Your brother wants to borrow $10‚000 from you. He has offered to pay you back $12‚000 in a year. If the cost of capital of this investment opportunity is 10%‚ what is its NPV? Should you
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Problem Sets Chapter 5 A1. (Bond valuation) A $1‚000 face value bond has a remaining maturity of 10 years and a required return of 9%. The bond’s coupon rate is 7.4%. What is the fair value of this bond? Calculating PV factor: i= required return = 9% = 0.09 n= 10 years Using Cash Flow of $1000 to calculate present value‚ Cash flow= $1000 PV factor = 1/(1+i)^n = 0.42241 PV = $1000*0.42241= 422.41 Using Coupon Rate to calculate present value of Annuity Cash flow= $1000 * 7.4/100 =
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DeGraaf________________ 15 points Menu item |Number sold |Standard/budgeted portion cost | |A |580 |$4.45 | |B |285 |$6.20 | |C |600 |$4.15 | |D |200 |$6.00 | |E |475 |$5.95 | |F |320 |$7.05 | |G |545 |$6.10 | |H |200 |$6.95 | |Totals |3‚205 | | | | | | |Solve all problems for 2 decimal places (x.xx) | | | |Food sales |$57‚680.30 | | | | | | |1. Food cost $ based on standard cost figures |$17834.75 |(1 pt) | | | | | |2. Food cost % based on standard cost figures |30.92% |(1 pt) | | | | | |3. Contribution margin $ |$39845
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Week 4 Checkpoint March 17‚ 2013 XACC/290 Resource: Ch. 4 of Financial Accounting Complete Exercise BE4-1. Complete Problems 4-2A & 4-3A. BE4-1: |Cash |Net Income | |-$100 |$0 | |-$20 |$0 | |+$1‚300 |$1‚300 | |+$800 |$800 | |-$2‚500 |$0 | |-$600 |$0 | | |
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or $24‚000 at the end of eight years. Assuming you could earn 11 percent annually‚ which alternative should you choose? If you could earn 12 percent annually‚ would you still choose the same alternative? Answer: I found two answers for the same problems. One is bringing the present value to the future and the other is bringing the future value to the present. In each one of them‚ different solutions were proposed. A. Present Value to the future Option 1: $10‚000 now with 11% interest. $10‚000
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Problem Set Seven Solutions Chapter 9 1. Two car manufacturers‚ Saab and Volvo‚ have fixed costs of $1 billion and constant marginal costs of $10‚000 per car. If Saab produces 50‚000 cars per year and Volvo produces 200‚000‚ calculate the average fixed cost and average total cost for each company. On the basis of these costs‚ which company’s market share should grow in relative terms? Answer: Average total cost is average fixed cost plus marginal cost: ATC = FC/Q + MC. Volvo’s average fixed cost
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Module 3 – Chapter 12 Problem 12-1A Part 1 KAZAAM COMPANY Statement of Cash Flows For Year Ended December 31‚ 2011 Cash flows from operating activities Net income $73‚750 Adjustments to reconcile net income to net cash provided by operating activities Increase in accounts receivable ($49‚625 - $65‚000) (15‚375) Increase in inventory ($252‚500 - $273‚750) (21‚250) Decrease in prepaid expenses ($6‚250 - $5‚375) 875 Decrease in
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