Finance Answers

If the NPV (Net Present Value) of a shop is R195 000 and the profitability index is 1,24375, the initial investment in the shop is

[1] R86 908. [2] R800 000. [3] R195 000. [4] R156 784. [5] none of the above

Consider Hitoshi who lives for two periods. In period 1, he is young and in period 2 he is old. He enjoys consuming, ct, and experiences distutility from labour, nt, according to the following preference function: U(c_{1}, c_{2}, n_{1}, n_{2}) = 2c_{1} ^ 0.5 + 2beta * c_{2} ^ 0.5 - 0.5n_{1} ^ 2 - 0.5beta * n_{2} ^ 2 He earns income from supplying labour in period 1 of winy and in period 2 of w2n2. Any saving he earns in period I can earn a return of (1+r₁) that is paid out to him at the beginning of period 2. He also knows when he is young that he will receive an inheritence of a2 in period 2.

a) Write out Hitoshi's one and two-period budget constraints. Combine these to form an intertemporal budget constraint.

b) What is Hitoshi's choice problem? What variables does he have control over? What variables does he take as given?

c) Solve Hitoshi's two-period optimization problem by taking FOCs and deriving his intertemporal and intra-temporal tradeoff conditions.

Explain and show your math.

identify the factor of decentralization. what is your forethought about sucess and failure of decentralization

Differentiate micro credit and micro finance? identify the major reason growth microfinance

A firm uses three machines in the manufacture of three products. Each unit of product A requires 3 hours on machine I, two hours on machine II, and one hour on machine III. While each unit of product B requires four hours on machine I, one hour on machine II, and three hours on machine III. While each unit of product C requires two hours on each of the three machines. The contribution margin of the three products is birr 30, birr 40 and birr 35 per unit respectively. The machine hours available on the three machines are 90, 54, and 93 respectively. a. Formulate the above problem as a linear programing model b. Obtain optimal solution to the problem by using the simplex method. Which of the three products shall not by produced by the firm? Why? c. Calculate the unused capacity if any