Economics Answers

Question 2
Juanita has an opportunity to invest in her friend's clothing store. The initial investment is $10,200 and the expected annual cashflows thereafter are {$300; $700; $1,300; $2,000; $2,000; $5,000; $5,000}. What is Juanita's IRR on this investment? (Allow two decimals in the percentage but do not enter the % sign.)

Question 3
Fabrice is looking to buy a new plug-in hybrid vehicle. The purchase price is $14,000 more than a similar conventional model. However, he will receive a $6,300 federal tax credit that he will realize at the end of the year. He estimates that he will save $1,300 per year in gas over the conventional model; these cash outflows can be assumed to occur at the end of the year. The cost of capital (or interest rate) for Fabrice is 6%. How long will Fabrice have to own the vehicle to justify the additional expense over the conventional model? In other words, what is the DISCOUNTED payback period in years? Discount future cash flows before calculating payback rounded UP to a whole year. (Enter just the number without comma and round off decimals.)

4) Draw the shifts in the PPF (hotel rooms and airline seats), between 2016 and 2020 as accurately as possible given the data in the case study. Explain your reasons.

10) If total costs per passenger for Fly Dubai are 70% of revenue, and of those, 70% are fixed costs, calculate total fixed costs for Fly Dubai in 2015.

The market for pizza has the following demand and supply schedules: Graph the demand and supply curves. What is the equilibrium price and quantity in this market? If the actual price in this market were above the equilibrium price, what would drive the market toward the equilibrium? If the actual price in this market were below the equilibrium price, what would drive the market toward the equilibrium.

Juanita has an apportunity to invest in her friend clothing store.the initial investment is $10,200 and the expected annual cash flow thereafter are ($300,$700,$1,300, $2000,$5000,$5000) . What is Juanita IRR on this investment?

True or false demand curve sgift to the right when demand increases

Current trends in trade finance exhibit a clear shift to open account-based trade and away from the traditional (and more secure) documentary credit. By some estimates, documentary letters of credit are now utilized in about 4% of trade transactions, even where higher-risk markets are involved.

1. Discuss the assertion by a senior European trade banker that "we are just one major crisis away from a mass return to traditional trade finance instruments, particularly the letter of credit."

2. What characteristics of the letter of credit might be the basis for such a statement?