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Andrew construction borrows the entire cost of a new dump truck. The loan has an annual interest rate of 12 percent and calls for monthly payments of $1,000 over a five-year period. What is the cost of the truck?
Mighty-lite inc., a manufacturer of plastic tables for institutional use is considering a capital spending program involving annual expenditures of $100,000 for each of the next five years. the firm estimates that its annual profit of $100,000 would increase by 50 percent when the capital program was completed. assuming the firm has a 20-year life and the appropriate interest rate is 12 percent, should the capital spending program be implemented?
a manufacturer of personal computers chas an inventory of 10,000 back-up storage drices that solvd for $100 per unit last year. The current market price price of these driven is now @70 per unit. By adding one of these drives to their stock of personal computers, the price of each computer is increased by $80 per unit. Should the driver be added? What is the opportunity cost of these drivers? Explain?
An executive's employment contract calls for a salary of $400,000 per year, a bonus equal to 2 percent of profits in excess of $10,000,000, and an option to buy 5,000 shares of common stock at a price of $50 per share. the market price of the stock is $70 per share, and the firm's profits for the current year are $12,000,000. Assuming the executive exercises the stock option and then sells the stock, what is the total compensation for the year?
Demand for the last four months was:
Month
Mar
Apr
May
Jun
Demand
6
8
10
8
A) Predict demand for July using each of these methods:
1) a 3-period moving average ;
2) using the weights of .5, .3, and .2, what is the three-period weighted moving average forecast for July;
3) exponential smoothing with alpha equal to .20, April forecast is 6 (use naïve to begin);
B) If the naïve approach had been used to predict demand for April through June, what would MAD have been for those months?
. From the following Balance Sheets you are required to prepare a Cash Flow
Statement:

Liabilities 1992 1993 Assets 1992 1993
Rs. Rs. Rs. Rs.
Share capital 2,00,000 2,50,000 Cash 30,000 47,000
Trade Debtors 1,20,000 1,15,000
Creditors 70,000 45,000 Stocks 80,000 90,000
Profit & Loss 10,000 23,000 Land 50,000 66,000
2,80,000 3,18,000 2,80,000 3,18,000
strengths and weaknesses of classical economics
Would a rules-based monetary policy produce price stability?
2. It is often the case in economic models that we estimate models using the log of the key variables. Re-estimate the model using the following model:
a. Log(food expenditure) = a + b* Log(Income)
b. Compare the results you get with this method and the other methods you have tried. How are the coefficients the same or different?
1. Assuming that there is a model of quantity demanded (Y) and personal income (X), and the linear regression you have run was estimated using income measured in $1,000. But in reality people’s income is measured in $1 not $1,000. If you multiply the income variable by 1,000 and re-estimate the model.
a. How are the results the same or different?
b. Explain why the results would be the same or different.
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