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Mr. Arroyo bought a piece of property for P100,000 down payment and 10 deferred semiannual payments of P8,000 starting 3 years from now. If the interest rate is 12% compounded semiannually, what is the present worth of the property?
A man borrowed P200,000 from a bank at 12% compounded monthly, which is payable monthly for 10 years (120 payments). If the first payment is to be made after 3 months, how much is the monthly payment?
What is the present worth of a P100 annuity starting at the end of the third year and continuing to the end of the fourth year, if the annual interest rate is 8%?
QUESTION 2
Babasiga.com, the online bookseller, wants to increase its total revenue. One strategy is to offer a 10% discount on every book it sells. Babasiga.com knows that its customers can be divided into two distinct groups according to their likely responses to the discount. The accompanying table shows how the two groups respond to the discount.
Group A
(sales per week)
Group B
(sales per week)
Volume of sales before the 10% discount
1.55 million
1.50 million
Volume of sales after the 10% discount
1.65 million
1.70 Million
a.Using the midpoint method, calculate the price elasticities of demand for group A and group B
(3Marks)
Home Attribute Analysis
Perform an attribute analysis of your projected wants and needs as a homeowner. Begin by prioritizing the following personal and microeconomic factors in terms of their importance to you in deciding when to buy a home.
- How large should the house be? How many bedrooms and bathrooms?
- Which rooms are most important: kitchen, family room, or home office?
- Do you need parking or a garage?
- Do you need storage space?
- Do you need disability accommodation?
- Do you want outside space: a yard, patio, deck?
- How important is privacy?
- How important is energy efficiency or other “green” features?
- How important are design features and appearance?
- How important is location and environmental factors?
- Proximity to work? Schools? Shopping? Family and friends?
Discuss briefly two objectives of risk management [4marks]
Given P = 24 – 0.1Q, where Q = q1+q2 and q1 = q2, TC1 = 0.1q1 2 , TC2 = 0.05q2 2 , a) Determine the output and price of low-costfirm b) Calculate the profit of the low-cost firm c) What isthe profit maximizing price level the high firm would like to charge but that doesn’t realize in the market? d) Compare the profits of the price taker at its own profit maximizing output and low-cost firm’s output e) Show the results a to d graphically
Find the marginal cost functions for each of the following average cost functions. a) AC = 1.5Q + 4 + 46 𝑄 b) AC = 160 𝑄 + 5 - 3Q + 2Q2
Find the marginal cost functions for each of the following average cost functions. a) AC = 1.5Q + 4 + 46 𝑄 b) AC = 160 𝑄 + 5 - 3Q + 2Q2
1. You are about to buy a business that is worth $200,000, but you do not have enough money to purchase the business entirely. You have a total of $90,000 in savings and you are looking at different financing options. Provide information for the following:
- Explain the advantages of equity financing and debt financing
- Explain the disadvantages of equity financing and debt financing
- Provide an example of equity financing
- Provide an example of debt financing
- Explain which type of long-term liability financing you would choose to buy the business?
