Finance Answers

Voyager is a Telco with an innovation that will generate it significant market share growth. This will result in many new customers in several new areas. Telco is aiming for much higher incomes. Consequently it has adopted an organisational expansion policy seeking to maximize income. Voyager is about the revenue forecast but unsure of their total budget expenses.

Explain to Voyager executives the importance of considering related expenses and discuss some of their controls as planning for its aggressive revenue expansion policy.

It is known that quantity demanded decreases by two units for each $1 increase in price. At a price of $5, quantity demanded is ten units.
a) What will be the quantity demanded is price is zero?
b) Write and equation for quantity demanded as a function of price.
c) Write an equation that expresses price as a function of quantity.
d) Write an equation for total revenue.

How to derive the price from TR=100,000Q-10Q^2

A rich uncle gives you the choice of one of the following legacies:
a. $15,000 each year for the next 12 years
b. $13,000 each year for the next 18 years
c. $11,000 each year for the next 12 years plus a lump-sum payment of $81,000 at the end of the 18th year.
Which would you take and why? Assume that appropriate discount rate is 10 percent and all amounts would be received at the end of the year.

Smith and Wesson have written a new managerial economics book for which they receive royalty payments of 15 percent of total revenue from sales of the book. Because their income is tied to revenue, not profit, they want the publisher to set the price so that the total revenue is maximized. However the publishers objective is maximum profit. If the total revenue function is TR=100,000Q-10Q^2 and the total cost function is TC=10,000+20Q+Q^2 determine A) the output rate that will maximize total royalty revenue and the amount of royalty income hat smith and Wesson would receive. B) the output rate that would maximize profit to the publisher. Based on this rate of output, what is the amount of royalty income smith and Wesson would receive? Compare the royalty income of smith and Wesson to that determined in part (a).

An investor is considering the purchase of a share of a company .The stock will pay a$ 3 dividend a year from today.This dividend is expected to grow at 10 % per year for the unforeseeable future .The investor thinks that the required return on the value of this stock is 15%. Given this assessment calculate the value of a share of the company's stock.

(i) Find the price of bond with a coupon rate of 12% having 5 years to maturity. Its par value is 10,000 Br and the discount rate is 12%.
(ii) Supposing interest rates fall to 8% what will be the price of the bond?

Calculate the price of bond with a coupon rate of 12% having 5 years to maturity. Its par value is 10,000 dollars and the discount rate is 12%

Hi.

Is it a fact that producing insecurity and conflict in the Middle East would cause oil prices go up?
If yes, how does it work?

Thank you.

Stock X and Y have the following probability distributions of expected future returns:

Probability ------- X -------- Y
0.15 -10% -20%
0.20 2 0
0.30 10 20
0.20 20 25
0.15 30 40

1)Calculate the expected rate of return for both stocks.
2)Calculate the standard deviation for both stocks.
3)Which stock is risky and why?