Answer:
class A stocks
Explanation:
in 5 years, class A stock will be worth = $30 x (1 + 6%)⁵ = $40.15
in 5 years, class B stock will be worth = $20 x (1 + 12%)⁵ = $35.25
now we need to determine the present value if each stock:
class A stock present value = $40.15 / (1 + 8%)⁵ = $27.33
class B stock present value = $35.25 / (1 + 8%)⁵ = $23.99
since the present value of class A stock is higher, then the engineers should select that type of stocks.
Which of the following is a characteristic of a firm’s optimal dividend policy? It maximizes the firm’s stock price. It maximizes the firm’s return on equity. It maximizes the firm’s earnings per share. It maximizes the firm’s total assets.
Answer:
It maximizes the firm’s stock price.
Explanation:
The correct answer is “it maximizes the firm’s stock price” because the optimal dividend policy allows the variable risk parameters and it maximizes the firm’s value. Moreover, the dividend policy attracts the shareholders and it maintains the firm’s or the company’s worth in the market. Therefore, the optimal payment of dividend increases or maximizes the stock price.
In May direct labor was 35% of conversion cost. If the manufacturing overhead for the month was $116,350 and the direct materials cost was $20,200, the direct labor cost was:
Answer:
Direct labor= $62,650
Explanation:
Giving the following information:
In May direct labor was 35% of conversion cost.
The manufacturing overhead for the month was $116,350.
The conversion costs are the sum of the direct labor and the manufacturing overhead:
Overhead= 65%= 116,350
Direct labor= 35%= ?
First, we need to determine the total amount of conversion costs:
Conversion costs= 116,350/0.65= 179,000
Now, the direct labor cost:
Direct labor= 179,000*0.35
Direct labor= $62,650
BPO Services is in the business of digitizing information from forms that are filled out by hand. In 2006, a big client gave BPO a distribution of the forms that it digitized in house last year, and BPO estimated how much it would cost to digitize each form. Form Type Mix of Forms Form Cost A 0.5 $3.75 B 0.5 $1.25 The expected cost of digitizing a form is $ . Suppose the client and BPO agree to a deal, whereby the client pays BPO to digitize forms. The price of each form processed is equal to the expected cost of the form that you calculated in the previous part of the problem. Suppose that after the agreement, the client sends only forms of type A. The expected digitization cost per form of the forms sent by the client is $ . This leads to an expected loss of $ per form for BPO. (Hint: Do not round your answers. Enter the loss as a positive number.)
Answer:
BPO Servicesa. The expected cost of digitizing a form is $2.50
b. The expected digitization cost per form of the forms sent by the client is $3.75, without a mix of forms.
c. This leads to an expected loss of $1.25 per form for BPO.
Explanation:
1. Data:
Form Type Mix of Forms Form Cost
A 0.5 $3.75
B 0.5 $1.25
b. Calculation of Expected Cost of digitizing a form:
Form Type Mix of Forms Form Cost Expected Cost
A 0.5 $3.75 $1.875 (0.5 * $3.75)
B 0.5 $1.25 $0.625 (0.5 * $1.25)
Total expected costs $2.50
c. Calculation of Expected cost of Form actually sent by Client without a mix of forms:
A 01 $3.75 $3.75 (1 * $3.75)
Total expected costs $3.75
d. Calculation of Expected Loss:
Expected Price = $2.50
Expected cost = $3.75
Expected loss = $1.25
e. The expected value (cost, price, or gain or loss) from the form digitization is the sum of all possible values from the mix of forms, each multiplied by the probability of its occurrence.
Jacobsen Corporation prepares its financial statements applying U.S. GAAP. During its 2016 fiscal year, the company reported before-tax income of $621,000. This amount does not include the following two items, both of which are considered to be material in amount: Unusual gain $201,000 Loss on discontinued operations (301,000) The company's income tax rate is 30%. In its 2016 income statement, Jacobsen would report income from continuing operations of:
Answer:
Jacobsen Corporation
Income from continuing operations of $621,000 will be reported.
Explanation:
The income from continuing operations is the same thing as the operating income. It is the pre-tax income that is reported on Jacobsen Corporation's income statement for the year ended December 31, 2016. The tax rate of 30% is applied on this figure to obtain the income tax expense for the year. But, for Jacobsen that has other unusual items, these are taken into consideration before the income tax is imputed to obtain the after-tax income.
The holder of a promotional permit may:
Provide alcohol to a minor
Serve an intoxicated person
Offer in-store wine and beer samples
Sell alcohol to members in a private club
Answer:
Offer in-store wine and beer samples.
Explanation:
Promotional permit was established to allow a person promote sale of alcoholic beverages on behalf of the manufacturer. Such alcoholic beverage must however be sold on the premises of the licenced holder.
A promotional permit holder, according to the Texas Alcoholic Beverage Commission,which was established in 1935, may involve in the sales of alcoholic beverages in a state or premises of the license holder. It is to be noted that the license holder must qualify enough before being granted the permit and must also pay some fees before carrying on such activities.
As a holder of a promotional permit, you are allowed to offer in-store wine and beer samples.
A person with a promotional permit:
Is allowed to promote the sale of a certain brand of alcohol Must be in a contract with the brand they are promotingIn order to promote the brand of alcohol, the person may use sales strategies such as offering in-store wine and beer samples to people to get them to try out the brand that they are promoting.
In conclusion, a holder of a promotional permit can offer in-store wine and beer samples.
Find out more at https://brainly.com/question/5796198.
The tri-star company currently use an old lathe that was purchase 2 years ago at $6000. This machine is being depreciatin on a MACRS five year (20%, 32%, 19%, 12%, 11%, 6%). The current market value for this machine is $3,000. The proposed new improved lathe cost $10,000 and additional installation fee of $1,000. The new lathe would require that inventories be increased by $800 and account receivable increase $600, but accounts payable would simultaneously increase by $700. Tri-Star's marginal federal-plus-state tax rate is 30%. What is the initial investment of company when evaluating the replacement of old lathe by the new one?
Answer:
$8,736
Explanation:
initial investment = capital expenditures (machine's purchase cost + installation costs) + any increase in working capital - disposal of old machine
capital expenditures = $10,000 + $1,000 = $11,000
after tax salvage value = market value + taxes on disposal
the current book value of the old machine = $6,000 - $1,200 - $1,920 = $2,880
taxes on salvage value = (book value - market value) x tax rate = ($2,880 - $3,000) x 30% = -$36
after tax salvage value = $3,000 - $36 = $2,964
net working capital = current liabilities - current assets
change in working capital = $800 + $600 - $700 = $700
initial investment = $11,000 + $700 - $2,964 = $8,736
The following data concerns a proposed equipment purchase: Cost$144,000 Salvage value$4,000 Estimated useful life 4years Annual net cash flows$46,100 Depreciation methodStraight-line Ignoring income taxes, the annual net income amount used to calculate the accounting rate of return is:
Answer: $74,000
Explanation:
The Average Investment refers to the average cash invested into a particular project and is useful in calculating the rate of return. The simple formula is to add the beginning value of the asset to its ending value and divide this by 2.
The ending value in this case would be the salvage value;
Average Investment = [tex]\frac{Beginning Cost of Machine + Salvage Value}{2}[/tex]
= [tex]\frac{144,000 + 4,000}{2}[/tex]
= $74,000
Because you can adapt to your audience while you are speaking, don't worry about analyzing the audience for an oral presentation.
A. True
B. False
Answer:
B. False.
Explanation:
This statement is false, due to the fact that a good oral presentation must be prepared before the presentation in accordance with all the procedures to be covered in the presentation. Therefore, the ideal is to know your audience before the presentation, so that there is a preparation aligned with their values and behaviors, in order to retain the attention and interaction of the participants, which makes the presentation more interesting and effective.
Scripting the presentation also avoids possible unforeseen events, in addition to being ideal to also be open to interactions, to provide important and impactful information, to prepare supporting material such as slides, and to always practice before the presentation, to be prepared and interacted on the subject addressed.
Fortune Enterprises is an all-equity firm that is considering issuing $13.5 million of perpetual debt. The interest rate is 10%. The firm will use the proceeds of the bond sale to repurchase equity. Fortune distributes all earnings available to stockholders immediately as dividends. The firm will generate $3 million of earnings before interest and taxes (EBIT) every year into perpetuity. Fortune is subject to a corporate tax rate of 40%. Suppose the personal tax rate on interest income is 55%, and the personal tax rate on equity income is 20%.
What is the annual after-tax cash flow to debt holders under each plan in Q7?
A. Debt holders get $0 mil. under the unlevered plan vs. 1.2 mil. under the levered plan
B. Debt holders get $1.2 mil. under the unlevered plan vs. 0.66 mil. under the levered plan
C. Debt holders get $0 mil. under the unlevered plan vs. 0.66 mil. under the levered plan
D. Debt holders get $0 mil. under the unlevered plan vs. 0.6075 mil. under the levered plan
Answer:
D. Debt holders get $0 mil. under the unlevered plan vs. 0.6075 mil. under the levered plan
Explanation:
interests paid to debt holders = $13,500,000 x 10% = $1,350,000
generally, interest revenue is taxed as ordinary revenue = corporate income tax rate (if debt holder is a business) or personal income tax (if debt holder is an individual).
under the first plan, debt holders get nothing because there is no outstanding debt since the company is an all equity firm.
under the second plan, if the personal tax rate on interest income is 55%, which is really high, the debt holders will earn $1,350,000 x (1 - 55%) = $607,500
OPR finds its cases through all of the following except which one? A. The investigation division of OPR.
Answer:
The investigation division of OPR.
Explanation:
OPR stands for Office of Professional Responsibility. It is a section of department of justice whose task is to monitor any misconduct in the government departments. It is responsibility of OPR to find any allegations that result in misconduct in department of attorney. The OPR finds its cases through all except the own division. There will be chance of familiarity and self review threats in such monitoring.
You purchased a bond 69 days ago for $891.26. You received an interest payment of $24.00 56 days ago. Today the bond’s price is $884.89. What is the holding period return (HPR) on the bond as of today?
Answer:
1.97%
Explanation:
The formula to calculate the holding period return is:
HPR=(Income generated+(ending value-initial value)/Initial value)*100
Income generated= $24
Ending value= $884.89
Initial value= $891.26
HPR=(24+(884.89-891.26)/891.26)*100
HPR=(24+(-6.37)/891.26)*100
HPR=(17.63/891.26)*100
HPR=0.0197*100
HPR= 1.97%
According to this, the holding period return (HPR) on the bond as of today is 1.97%.
Ansara Company had the following abbreviated income statement for the year ended December 31, 20Y2:
(in millions)
Sales $25,790
Cost of goods sold $21,920
Selling, administrative, and other expenses 2,320
Total expenses $24,240
Income from operations $1,550
Assume that there were $5,620 million fixed manufacturing costs and $1,280 million fixed selling, administrative, and other costs for the year. The finished goods inventories at the beginning and end of the year from the balance sheet were as follows:
January 1 $3,060 million
December 31 $3,570 million
Assume that 20% of the beginning and ending inventory consists of fixed costs. Assume work in process and materials inventory were unchanged during the period.
Prepare an income statement according to the variable costing concept for Ansara Company for 20Y2.
Ansara Company
Variable Costing Income Statement
For the Year Ended December 31, 20Y2 (in millions)
Sales $ 21,920
Variable cost of goods sold:
Beginning inventory $ 1,841
Variable cost of goods manufactured 12,710
Ending inventory 2,149
Total variable cost of goods sold 18,670
Manufacturing margin $ 3,250
Variable selling and administrative expenses 870
Contribution margin $ 2,380
Fixed costs:
Fixed manufacturing costs $ 4,820
Fixed selling and administrative expenses 1,100
Total fixed costs 5,920
Income from operations $
Answer:
Ansara Company
Variable Costing Income Statement
For the Year Ended December 31, 20Y2 (in millions)
Sales $25,790
Variable cost of goods sold:
Beginning inventory ($3,060 × 80%) $2,448
Variable cost of goods manufactured ($21,920 × 80%) $17,536
Ending inventory ($3,570 × 80%) ($2,856)
Total variable cost of goods sold ($17,128 )
Contribution margin $ 8,662
Less (Period) Expenses :
Fixed manufacturing costs ($5,620)
Selling and administrative expenses :
Fixed selling and administrative expenses ($1,280)
Variable selling and administrative expenses ($1,040)
Income from operations $772
Explanation:
Variable Costing :
Product Cost = Only Variable Manufacturing Cost
= This is 80% of Cost of Goods Sold from our senario.
Period Cost = Fixed Manufacturing Costs + All Non - Manufacturing Cost (Variable and Fixed)
Note : Variable selling and administrative expenses is what remains after fixed selling, administrative, and other costs are removed from the total of selling, administrative, and other costs.
An estimated demand curve does not necessarily match actual data perfectly because A. it is not possible to accurately calculate the coefficients of the curve. B. demand is unpredictable. C. some factors that are not measured or observed may affect the curve. D. the random error term has too large of a range.
Answer:
C. some factors that are not measured or observed may affect the curve.
Explanation:
a lot of unforeseen circumstances might occur. these occurrences would not be measured in the estimated demand curve. this would lead to the estimated demand curve not matching the actual demand curve.
for example, the factors affecting the demand for bread are ; price, income, price of a substitutes. these are included in estimating the demand curve for bread. Assume that a study comes out stating that bread is harmful to the health.this reduces the demand for bread. this study wasn't anticipated and included in estimating the demand curve. as a result, the actual data would differ from the estimated data
A university bookstore buys mechanical pencils from a wholesaler. The wholesaler offers discount for large order quantity per shipment according to the following price schedule:
Order Quantity Price Per Unit
1 to 200 $4.00
201 to 1,000 $3.60
1,001 to 2,000 $3.40
2,001 and greater $3.25
The bookstore expects an annual demand of 2,500 units. It costs $10 to place an order, and the annual cost of holding a unit in stock is 30% of the unit’s procurement price. Determine the best order quantity.
Answer:
226 units
Explanation:
Formula : [tex]\sqrt{\frac{2 * Annual Demand * Ordering Cost}{Holding Cost}[/tex]
[tex]\sqrt{\frac{2*2500*10}{0.3*3.25} }[/tex] = 226
The economic order quantity is the minimum amount of inventory that a seller must keep to demand and lower the holding cost. The reorder point is the inventory management system in which a certain level of inventory is set as a trigger for reordering the stock. Ordering cost is determined by the number of order placed.
One measure of ____ is the extent to which the work of the department affects the final output of the organization.
Answer:
Centrality
Explanation:
Remember, a less central organization means more freedom. However, when the work of the departments in an organization can adversely affects the final output of the organization it tells us how central the organization is.
This Implies that the organization is following a structured system in which flexibility is not possible, and as a result any issues at other departments might affect output.
Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours 72,700 Estimated variable manufacturing overhead $ 3.30 per machine-hour Estimated total fixed manufacturing overhead $ 838,730 The predetermined overhead rate for the recently completed year was closest to:
Answer:
The predetermined overhead rate for the recently completed year was closest to: $11.54 per machine-hour
Explanation:
Predetermined Overheads = Budgeted Fixed Overheads / Budgeted Activity
= $ 838,730 / 72,700
= $11.536864 or $11.54 per machine-hour.
3. What techniques would you use as alternatives to traditional discipline? What do such alternatives have to do with organizational justice? Why do you think alternatives like these are important, given industry’s need today for highly committed employees?
Answer & Explanation: Traditional discipline refers to correctional strategies. Often times, this form of discipline is punitive in nature hence the use of alternatives.
Some alternatives to traditional discipline include the use of MEDIATION, FACILITATION, COUNSELLING.
The use of alternatives to traditional discipline is important to organizational justice when it is complied with across board all employees so that they have a perception of fairness. Also such alternatives are seen to be ethically right, leads to employees being committed, reduces employee turnover and prevents avoidable litigation.
You decide to borrow $100,000 at the riskless interest rate, and you then invest all $300,000 ($200,000 of your own cash and the $100,000 borrowed cash) in the market index fund. Calculate the expected return and standard deviation of this investment portfolio
You have $200,000 of cash. The riskless interest rate is 3%. The market index fund has an expected return of 10% and a standard deviation of 20%
You decide to borrow $100,000 at the riskless interest rate, and you then invest all $300,000 ($200,000 of your own cash and the $100,000 borrowed cash) in the market index fund. Calculate the expected return and standard deviation of this investment portfolio
Answer:
The expected return of this portfolio = 13.50%
standard deviation of this portfolio = 30.00%
Explanation:
From the information given:
The percentage of riskless = -100000/200000
The percentage of riskless = -0.50%
Now; the investment in market index = 1.50%
The expected return of this portfolio = 1.50 × 10% + ( - 0.5 ×3 %)
The expected return of this portfolio = 1.50 × 0.1 - 0.5 × 0.03
The expected return of this portfolio = 0.15 - 0.015
The expected return of this portfolio = 0.135
The expected return of this portfolio = 13.50%
standard deviation of this portfolio = the investment in market index × market index standard deviation
standard deviation of this portfolio = 1.50 × 20%
standard deviation of this portfolio = 30.00%
Suppose that on Valentine's Day, the demand for both roses and greeting cards increases by the same percentage amount. However, the price of roses increases by more than the price of greeting cards. Based on this information, you can conclude that the supply of Valentine's card:_______.
Answer:
The correct answer is: the supply of the greeting cards is less elastic than the one of the roses.
Explanation:
To begin with, the elasticity show how much the price and the quantity are related by indicating the variation that happens to one of them when the other changes. Therefore that the supply of the greeting cards is less sensitive to price because when the quantity demanded increased the price did not change as much as the roses due to the fact that the sellers were not encourage as much as the sellers of the roses to produce more and therefore to increase the price of the cards. So to sum up, when the price changed the sellers were not encourage to increase the production of the cards as much as the production of the roses because of its elasticity.
Answer:
the supply of the greeting cards is less elastic than the one of the roses.
Explanation:
If a small electric automobile manufacturer is able to gain the social return generated by its electric motor, its demand for financial capital would Group of answer choices
Answer: shift to the left
Explanation:
When a small electric automobile manufacturer is able to gain the social return generated by its electric motor, then its demand for financial capital will shift to the left.
This means that since the financial capital shift to the left, there will be a reduction in the demand for financial capital.
For each scenario, identify which argument is being used to justify trade protectionism.
Argument:
1. Job creation argument
2. National Security argument
3. Infant industry argument
a. Politicians in a small nation want to impose tariffs on foreign food because they believe the nation is too dependent on foreign producers.
b. Lobbyists argue that by prohibiting the importation of manufactured goods, the domestic manufacturing industry will create thousands more jobs.
c. Brazil imposes high tariffs for computer imports so small, domestic manufacturers can develop the technology needed to compete with foreign competitors.
d. Lobbyists argue that raising import tariffs on foreign oil will lead to more domestic jobs in the domestic energy industry.
Answer:
a. Politicians in a small nation want to impose tariffs on foreign food because they believe the nation is too dependent on foreign producers.
2. National Security argumentThis argument is generally used on high tech products, but it is sometimes used to support other industries that are considered essential and very important for a country. The problem is that it always results in higher domestic prices benefiting only a few.
b. Lobbyists argue that by prohibiting the importation of manufactured goods, the domestic manufacturing industry will create thousands more jobs.
1. Job creation argumentUnder this policy, politicians think that they can substitute imports by local products which would favor the trade balance and also generate jobs. The problem is that domestic prices might be very high and consumers will be forced to pay those high prices. Also, other economies can retaliate and the country's exports might be negatively affected.
c. Brazil imposes high tariffs for computer imports so small, domestic manufacturers can develop the technology needed to compete with foreign competitors.
3. Infant industry argumentThis argument is used by politicians that claim that infant industries (or recent, new industries) need to be protected in order to be able to function, prosper and grow. The problem with this argument is that industries operate under a bubble and consumers are charged very high prices for obsolete technology.
d. Lobbyists argue that raising import tariffs on foreign oil will lead to more domestic jobs in the domestic energy industry.
1. Job creation argumentAgain, under this policy, politicians think that they can substitute imports by local products which would favor the trade balance and also generate jobs. The problem is that domestic prices might be very high and consumers will be forced to pay those high prices.
adjustments that increase or decrease earnings should be investigated with more skepticism.
Answer:
True of financial account auditors.
Explanation:
A financial account auditor often act as skeptics (having suspicion and lack of trust) when reviewing financial transactions.
Thus financial accounts adjustments that increase or decrease earnings are usually investigated with more skepticism by auditors. Such increased skepticism is important because it enables the auditor undo errors and better position the business for success.
A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.
A. True
B. False
Answer:
false
Explanation:
Nissan’s all-electric car, the Leaf, has a base price of $32,780 in the United States, but it is eligible for a $7500 federal tax credit. A consulting engineering company wants to evaluate the purchase or lease of one of the vehicles for use by its employees traveling to job sites in the local area. The cost for leasing the vehicle will be $4200 per year (payable at the end of each year) after an initialization charge of $2500 paid now. If the company purchases the vehicle, it will also purchase a home charging station for $2200 that will be partially offset by a 50% tax credit. If the company expects to be able to sell the car and charging station for 40% of the base price of the car alone at the end of 3 years, should the company purchase or lease the car? Use an interest rate of 10% per year and annual worth analysis.
Answer:
Nissan's all-electric car, the Leaf
PV cost of Leaf Purchase = $16,529
PV cost of Leasing = $12,944.78
The company should lease the car.
Explanation:
a) Costs incurred to purchase the Leaf:
Base price $32,780
less Federal tax credit ($7,500)
Charging station 2,200
less 50% tax credit (1,100)
Cash paid $26,380
Sales value after 3 yrs (9,851) ( $26,380 - 40% of base discounted to PV)
Net PV Investment $16,529
b) Calculation of Discounted Present Values of Payments under Leasing, using online financial calculator:
PV (Present Value) $12,944.78
N (Number of Periods) 3.000
I/Y (Interest Rate) 10.000%
PMT (Periodic Payment) $4,200.00
Starting Investment $2,500.00
Total Principal $15,100.00
Total Interest $2,129.50
c) The purchase of the Leaf would involve a present value cost of $26,380 after deducting all the savings from tax. The 40% sales value of the car at the end of 3 years = $13,112 ($32,780 x 40%). When this sales value is discounted to PV of $9,851, the PV of the car investments becomes $16,529 ($26,380 - $9,851). On the other hand, leasing will cost in PV the sum of $12,944.78
.
The goal of collaborative planning, forecasting, and replenishment (CPFR) is to improve operational efficiency and manage inventory.
a. True
b. False
Answer:
Option "a" = true.
Explanation:
"The goal of collaborative planning, forecasting, and replenishment (CPFR) is to improve operational efficiency and manage inventory"
The statement given above is right or CORRECT and TRUE(option a).
The concept of "Collaborative Planning, Forecasting and Replenishment" was first brought into limelight in the year 1995. Collaborative Planning, Forecasting & Replenishment make sure that a terminology or say a concept in commerce which is know as "Integration of supply chain" is improving greatly.
The collaborative planning, forecasting, and replenishment (CPFR) helps to improve operational efficiency by reducing costs such as that of logistics, transportation and many more.
_______________ of well-to-do individuals often put their own money into small new companies at an early stage of development, in exchange for owning some portion of the firm. Group of answer choices
Answer: C. A Network
Explanation:
One of the ways of raising capital is through the use of Angel Investors. These are usually well off individuals with excess cash for investment who look for companies to invest in at an early stage because they are trying to gain a positive return when the companies become successful.
To make their funds more substantial and their services easier to reach, Angel investors form networks to enable them achieve their mission of putting their own money into small new companies at an early stage of development, in exchange for owning some portion of the firm.
Salary expense was 15.5% of sales this year. If sales this year are $1,300,000 and are forecasted to be $1,500,000 next year, what is forecasted salary expense next year if all expenses maintain a constant percent of sales?
Answer:
Salary expense next year=$232,500
Explanation:
The ratio of expense to ales is an important which helps in the management and control overhead.
We can be predict the Salary expense using the information given about the relationship between salary expense and sales .
If salary expense is 15.5% of sales, then Salary expense this year =
15.5% × 1,300,000=$201,500
Salary expense next year = 15.5% × foretasted sales next year
= 15.5% × 1,500,000 = $232,500
We use 15.5% because the relationship between the expenses and the sales in proportion is expected to remain the same
Salary expense next year=$232,500
Suppose an American buys stock issued by an Argentinian corporation. The Argentinian firm uses the proceeds from the sale to build a new office complex. This is an example of foreign ___________ in Argentina.
1. Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries?
a. Protecting property rights and enforce contracts
b. Providing tax breaks and patents for firms that pursue research and development in health and sciences.
c. Increasing taxes on income from savings
d. Imposing restrictions on foreign ownership of domestic capital.
2. In less developed countries, what does the brain drain refer to?
a. The emigration of highly skilled workers to rich countries
b. Lower productivity due to a malnourished workforce
c. Rapid population growth that increases the burden on the educational system
d. Rapid population growth that lowers the stock of capital per worker
Answer:
Suppose an American buys stock issued by an Argentinian corporation. The Argentinian firm uses the proceeds from the sale to build a new office complex. This is an example of foreign PORTFOLIO INVESTMENT in Argentina.
1. Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries?
a. Protecting property rights and enforce contracts b. Providing tax breaks and patents for firms that pursue research and development in health and sciences.Both A and B are essential for increasing economic growth. E.g. if Coke was not able to keep its formula secret in certain country, it will not engage in business there. Investment in R&D is essential for future economic growth.
2. In less developed countries, what does the brain drain refer to?
a. The emigration of highly skilled workers to rich countriesBrain drain refers to the immigration of highly skilled workers from poor countries into rich countries. E.g. a doctor moves from mexico to the US because he/she can earn a much higher salary. But at the same time, all the money and time spent educating the doctor is lost by Mexico and its economy.
A growing population encourages economic growth as it creates a larger workforce. Suppose a surge in immigration increases a country's total population and its overall economic output increases. As a result, the country's real GDP increases from $304,000 to $316,500. What is the percent change in real GDP
Answer:
4.11%
Explanation:
the percentage change in real GDP = [(new real GDP - old real GDP) / old real GDP] x 100 = [($316,500 - $304,000) / $304,000] x 100 = 4.11%
Generally a surge in immigration will result in both higher nominal and real GDP, but what should be more important is how real GDP per capita changes. If real GDP per capita increases, then the inflow was positive and made the economy grow for better. If real GDP per capita decreases, even if total real GDP increases, then the economy is not doing better.
You have just turned 40 years old and are trying to decide who much money to put into your retirement plan. The plan works as follows: Every dollar in the plan earns 7% per year. You cannot make withdrawals until you retire on your sixty-fifth birthday. After that point, you can make withdrawals as you see fit. You decide that you will plan to live to 95 and work until your turn 65. You estimate that to live comfortably in retirement, you will need $250,000 per year starting at the end of the first year of retirement and ending on your 95th birthday. You already have $200,000 in the retirement plan. You will contribute the same amount to the plan at the end of every year that you work, starting next year. How much do you need to contribute each year to fund your retirement
Answer:
$31,886.09
Explanation:
years until retirement = 65 - 40 = 25 years
interest earned 7%
retirement age 65
expected life span after retiring = 95 - 65 = 30 years
financial needs during retirement $250,000 per year
current account balance $200,000
we must first determine how much money you will need when you are 65:
present value = $250,000 x 12.409 (PV annuity, 30 years, 7%) = $3,102,250
your $200,000 will be worth $200,000 x (1 + 7%)²⁵ = $1,085,486.53 in 25 years
so you need $3,102,250 - $1,085,486.53 = $2,016,763.47 extra
using the FV formula for an annuity:
$2,016,763.47 = payment x 63.249 (FV annuity, 25 years, 7%)
payment = $2,016,763.47 / 63.249 = $31,886.09