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Problem 1. What is the value of the MPC (marginal propensity to consume)? Problem 2. What is the value of MPS (marginal propensity to save)?
1) Calculate the expected rate of return, E(X). 2) Calculate the Variance and the Standard deviation of the returns. 3) What's the probability for this investment to yield a return of less than 10 %?
Problem: Calculate the totals change in a year's GDP: You win $25,000 in your state lottery. Ever the entrepreneur, you decide to open a Ping Pong ball washing service, buying $15,000 worth of equip
Task: Can you tell me which statement is corrrect (if any) and why? 1. Actual aggregate expenditures does not always equal real GDP. 2. Planned investment exceeds actual investment when real GDP is gr
Question: NPV versus IRR. Here are the cash flows for two mutually exclusive projects: 1. At what interest rates would you prefer project A to B? 2. What is the IRR of each project?
Problem: X-treme vitamin company is considering two investments, both of whch cost $ 10,0000. The cash flows re as follows. Which of the two project should chosen based on the payback method?
Question 1: Use the payback period to assess the acceptability and relative ranking of each lathe. Question 2: Assuming equal risk, use the following sophisticated capital budgeting techniques to as
Question 1. Calculate the expected return over the 4-year period for each of the three alternatives. Question 2. Calculate the standard deviation of returns over the 4-year period for each of the thre
A firm must spend $ 10 millions today in a project. That is expected to bring in annual revenues of $1.5 millions for the next 10 years (beginning at the end of year 1).The firm cost of capital is 5
A project costs $475 and has cash flows of $100 for the first three years and $75 in each of the project's last five years. What is the payback period of the project?
1) Assuming MTV has sufficient taxable income from other projects so that it can expense the cost of the network immediately, what are the project free cash flows for the project for years 0 through
The risk-free rate of interest is currently 5% and the forward price of oil one year in the future is now trading at $40 a barrel. What should the investment proposal be worth to Pampa (you may assu
Compute the (1) net present value, (2) profitability index, and (3) internal rate of return for each option. (Hint: To solve for internal rate of return, experiment with alternative discount rates t
Do the percentages of GDP spent on consumption (C), investment (I), government (G), exports (X), imports ((M) differ significantly among those years?
Suppose you plan to hold Vandhalia stock for only one year. Calculate your total return from holding Vandhalia stock for the first year. Explain what this means.
Q1. What alternative investment has the lowest possible volatilty while having the same expected return as Microsoft? Q2. What investment has the highest possible expected return while having the same
Question 1. What is the NPV of each project Question 2. If the firm can choose only one of these projects, which should it choose?
Calculate the expected value, standard deviation, and coefficient of variation of cash flows for each project.
Using the 1) payback 2) net present value and 3) internal rate of return methods of capital project evaluation, evaluate the acceptability of the proposed project. Also, based on your findings, what
Because you must repay a total of $29,000 in one year, the finance company requires you to pay $29,000/12, or $2,416.67, per month over the next 12 months. Is this a 16 percent loan? What rate would
1) Which project(s) should be chosen if the discounted payback must be achieved in at least 4 years? 2) Which project(s) should be chosen if internal rate of return period is the criteria for each pro
Assume that consumer spending is $1,000, government expenditures are $250, investments by industry are $200, and the excess of exports over imports is $300. Compute the GDP. (please show your work)
Compute the GDP of Tanzania by using the following hypothetical information (all amounts are in trillions of dollars):
Discuss the principal limitations of monetary policy relative to current economic conditions?
With regards to current economic conditions, what is the effect of a large carry trade on U.S. monetary policy?