Finance Answers

1. A McDonald’s Big Mac costs 2.44 yuan in China, but costs $4.20 in the United States. Assuming that purchasing-power parity (PPP) holds, how many Chinese yuan are required to purchase 1 U.S. dollar?

In an attempt to increase tax revenues, parliamentarians introduced legislation that would increase state <b><i>excise</i></b> taxes. Examine the impact of such an increase on the equilibrium prices paid and quantities consumed by consumers in markets characterized by (a) Sweezy oligopoly (b) Cournot oligopoly (c) Betrand Oligopoly (d)Determine which of these market settings is likely to generate the greatest increase in tax )

Discuss the relationship between bond prices and interest rates. What impact do changing interest rates have on the price of long-term bonds versus short-term bonds? 

Kinkead Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be −$10 million, but its FCF at t = 2 will be $20 million. After Year 2, FCF is expected to grow at a constant rate of 4% forever. If the weighted average cost of capital is 14%, what is the firm's value of operations, in millions?

QUESTION # 2

1.    Discuss the commonly used procedures for ranking investment proposals. what are the advantages and disadvantages of these techniques? (Use examples where appropriate)

QUESTION # 1

1.    What constitutes inventory? Discuss the benefits of inventory management.

ii)Discuss new developments in inventory management systems and the implications for production technique any philosophy.

iii) What factors are likely to reduce the holdings of inventory in relation to sales in the future? What factors will tend to increase the ratios and what in your judgement is the net effects? 

 data over the past six months.

Number of houses sold Monthly loan payments (in R1 000’s)

x y

160 3,7

250 5,6

800 7,5

450 11,3

120 18,9

50 28.4

The regression line equation is [1] y = 480,89x − 13,99. [2] y = −0,016x + 17,45. [3] y = 17,45x − 0,016. [4] y = −13,99x + 480,89. [5] none of the above