Other Economics Answers

(a)  Why is the dividend decision one of the major areas that a finance manager should pay particular attention to? What considerations must be taken into account when setting a dividend policy of a company?                                                           (12 marks)

time value and discount rates You just won a lottery that promises to pay you $1,000,000 exactly 10 years from today. Because the $1,000,000 payment is guaranteed by the state in which you live, opportunities exist to sell the claim today for an immediate single cash payment. a. What is the least you will sell your claim for if you can earn the following rates of return on similar-risk investments during the 10-year period? (1) 6% (2) 9% (3) 12% b. Rework part a under the assumption that the $1,000,000 payment will be received in 15 rather than 10 years. c. On the basis of your findings in parts a and b, discuss the effect of both the size of the rate of return and the time until receipt of payment on the present value of a future sum.

time value and discount rates You just won a lottery that promises to pay you $1,000,000 exactly 10 years from today. Because the $1,000,000 payment is guaranteed by the state in which you live, opportunities exist to sell the claim today for an immediate single cash payment. a. What is the least you will sell your claim for if you can earn the following rates of return on similar-risk investments during the 10-year period? (1) 6% (2) 9% (3) 12% b. Rework part a under the assumption that the $1,000,000 payment will be received in 15 rather than 10 years. c. On the basis of your findings in parts a and b, discuss the effect of both the size of the rate of return and the time until receipt of payment on the present value of a future sum.

. A $1,000 unit bond has a coupon rate of 4% (interest paid yearly

at $40 per year). The bond has five years left until it matures. The current

market interest rate equals 5%.

Compute the bond’s market value today. [Bond Value CH 7]

. A $1,000 unit bond has a coupon rate of 4% (interest paid yearly

at $40 per year). The bond has five years left until it matures. The current

market interest rate equals 5%.

Compute the bond’s market value today. [Bond Value CH 7]

What is NDP? Is it a better or worse measures of output than GDP? Explain

Suppose you buy a $100 government bond that is due next year. How much nominal interest will 

you receive if inflation is 4 percent over the year and the bond promises a real return of 3 percent? 

General instructions:

✓ Discuss the following points as much as possible.

✓ Each questions should be answered.

✓ Attempt all questions, size of the work 5-10 pages.

Submitted date:- Tus, Aug 12

Questions

 1. Show by using graph the factors which can able to affect the equilibrium conditions and explain how the government can able to inverse in the market?

2. In the market the inverse demand function given as P=200-1/6Qd and P=100+1/2Qs

If in the market there are 200 identified by years and 100 supplies based on the information: 

A. Calculate Pe and Qe

B. Calculate Ped and Pes 

C. When price increases in the market what will happen for TR

D. When the price value fixed in the market at $16

√ what will happen

√ whose problem do it

√ how it will be managed

√ number of demand and supply

3. Explain by using the graph the relation between TPI, API, MPI and stages of SR production?

4. Show price equilibrium and quantity of the demand and supply function?

Beta Ltd has a product that sells for $50 and is produced at a variable production cost of $24 per unit and a variable non-production cost of $8. The variable production costs can be reduced 25% by installing a new piece of equipment. The Installation of the new equipment will increase fixed costs from the present level of $122,400 to $159,000.Calculate the margin of safety (in units, RM and nearest %) based on the present break-even point and the new break-even point if the budgeted sales are 8,500 units.