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Jacob plans to replace the truck irrespective of whether it leases or buys. Jacob has a marginal tax rate of 40% and a MARR of 15%. What is Jacob's present equivalent cost of leasing?
Find the equilibrium interest rate r and the equilibrium level of income Y. Suppose instead that the money supply is raised from 1,000 to 1,200. How much does the LM curve
Find the firm's profit maximizing price and quantity. What is its profit? Could the firm increase its profit by using a second plant (with costs identical to the first) to produce the output in part
How would the actual and standardized budgets be affected if those rebates became permanent tax policy and were distributed annually?
The tuition by 5 percent for all students. As a result, enrollment increased by 15%. What happened,all else constant, to your institution's revenues? Why?
If the cost function for John's Shoe Repair is C(q)=100+10q-q^2+(1/3)q^3, what is the firm's marginal cost function? What is its profit-maximizing condition if the market price is p? What is its su
Draw an accurate figure showing how the glass firm minimizes its cost of production. What is the equation of the long run expansion path for a glass firm? Illustrate in a graph
A U.S. chemical firm has a production function of q=10(L^.32)*(K^.56). It faces factor prices of w=10 and r=20. What are its short-run marginal and average variable cost curves?
What will Albert charge per viewing? If a third rancher, Colin, also finds access to the cave from his property and if all behave as Cournot oligoplists, find their prices and quantities.
The parent of each firm subsidizes its respective research and development center on an annual basis. Which firm is subject to a higher degree of economic exposure? Explain.
All other expenses are in U.S. dollars. Explain how Albany Corp. can reduce its economic exposure to exchange rate fluctuations.
List the factors that affect currency call option premiums and briefly explain the relationship that exists for each. Do you think an at-the-money call option in euros has a higher or lower premium
Assume Mike did not obtain Canadian dollars until the option was exercised. Also assume that there are 50,000 units in a Canadian dollar option. What was Mike's net profit on the call option?
Why might forward contracts be advantageous for committed transactions, and currency options be advantageous for anticipated transactions?
How can the team hedge its position? What is there to lose by waiting three months to see if the exhibition game is approved before hedging?
Foreign borrowers who want to raise Swiss Francs through a bond issue outside of Switzerland to get around this ban. Explain the economic advantages of swap agreements.
Would it be better off using a forward hedge or a money market hedge? Substantiate your answer with estimated revenue for each type of hedge.
Relate the use of currency options to hedging net payables and receivables. That is, when should currency puts be purchased, and when should currency calls be purchased?
Most of their furniture from Brazil and then sell it out of retail stores in the United States. How will Lubbock, Inc., be affected if Brazil's currency strengthens over time?
Compare and contrast transaction exposure and economic exposure. Why would an MNC consider examining only its "net" cash flows in each currency when assessing its transaction exposure?
Boulder, Inc.,exports chairs to Europe (invoiced in U>S> dollars) and competes against local European companies. If purchasing power parity exists, why would Boulder not benefit from a strong
If the market demand curve shifts to: Qd= 150,000 -5,000P. What is the new equilibrium price and output in the short run for both the industry and each firm?
What is a major benefit (you could address that issue) or a major cost (or you could address that issue) associated with trade deficits?
Madelyn can work at a competing pottery factory for $40,000 per year. The accounting profit at Madelyn's Pottery factory is?
If a firm is in an antitrust court case being accused of monopolizing a product, the firm would hire an economist to show