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What would you identify as some of the key strategic initiatives that firms in the tourism space, such as Ardent Leisure, should be considering?
Briefly explain the main insights gained from this ex ante moral hazard exercise for the particular case of microfinance institutions.
If, on the other hand, the borrowers' behavior cannot be observed, then, show that only the one with collateral can borrow.
An electronics retailer considers setting up a new store to serve four nearby cities.
Comment on what this exercise reveals, given the asymmetric value of financial access at different levels of wealth.
She has the option to go to a risk neutral and competitive bank in order to borrow the rest of the money that she Why Intervene in Credit Markets?
Compute the threshold w* below which the lender is unwilling to finance the project.
Now suppose the bank cannot differentiate between types. Which of the borrower types will it lend to?
Explain what you understand by (a) Business to business segmentation and (b) Business to consumer segmentation.
Describe contexts in which it seems like a better prospect, and places in which it seems less likely to be a winning idea.
How can precautionary savings be explained under the rationality paradigm? Are precautionary savings always an optimal decision in low-income economies?
Explain briefly two reasons as to why it is nearly impossible for individuals living in rural areas to find effective crop insurance.
All individuals just consume the sum earned in periods 1 and 2. Show that the two types will invest in one project, in period 2 only.
The discount factor for type 1 is now ß1 = 0.65 and the discount factor for type 2 is ß2 = 0.65. Show that in this case neither type will invest at all.
Compute the premium fee set by the insurer. With this level of risk premium, which of the two types will purchase insurance? Explain your answer.
Discuss aspects of the tax laws that make the form of organization less important.
What are the advantages and disadvantages of the use of a sole proprietorship versus a partnership for conducting the operations of a small business firm?
Examine Rudyard Kipling's "The White Man's Burden" pp. 823-824. Respond to the following questions, ensuring to use specific evidence and examples.
How much income tax must the corporation pay? What is the marginal tax rate? What is the average tax rate? How much tax must the corporation pay?
The bond currently sells for $1153. What are the historical after-tax cost of debt and the current after-tax cost of debt? Assume a 40 percent tax rate.
Its pretax cost of equity is 14 percent, and its pretax cost of debt is 8 percent. The tax rate is 40 percent. What is the NPV of this project?
For this assignment you will prepare a virtual tour of works and sites of the Gothic period and the Fourteenth century in Europe.
What kinds of additional information would you need to have in order to draw sharper comparisons?
Explain three differences between contracts offered by microfinance institutions and standard contracts offered by commercial banks.
If the bank only aims to break even, calculate the interest rates charged to high types and to low types. Compare the two rates.