Compare the behavior of the interest rate under TR-S to its behavior under the basic Taylor rule. - Is TR-S a realistic description of central banks' behavior?
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On January 3, 2016, Newman, a dedicated, long term postal work, delivered 30 letters in and 8 hour period. Todd Gak, Newman's supervisor, was so impressed that on January 4, 2016, he made the following statement: It is now April 18, 2016, and New ma..
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Calculate Company E’s weighted average cost of equity, given the following information: (a) Expected Return on the Market: 10%, (b) Beta for Company E: 1.11, (c) Expected Risk Free Rate of Return: 3%, (d) Debt: $10,000,000, (e) Equity: $8,000,000, an..
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Assume a clinical laboratory is considering a new test. Here are the key assumptions: annual fixed direct costs = $20,000, annual overhead allocation = $10,000, variable cost per test = $5, and expected volume = 5,000 tests. What price should be set ..
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You agree to lease a car for 5 years by paying $300 per month. You are not required to pay any money up front or at the end of your agreement. Your opportunity cost of capital is 6% APR (Annual Percentage Rate). What is the cost of the lease (Present..
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You hold a portfolio of stocks consisting of the following: Stock Beta Current Value Caterpillar 0.6 $20,000 CitiCorp 0.8 $21,000 Wendy’s 1.0 $22,000 Boeing… 1.2 $27,000 Total: $90,000 a. What is the beta of the portfolio?
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Consider a three-year project with the following information: initial fixed asset investment = $860,000; straight-line depreciation to zero over the five-year life; zero salvage value; price = $33.65; variable costs = $22.35; fixed costs = $208,000; ..
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Explain, with examples, the key factors to be considered when formulating a working capital funding policy?
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Gerry bought 100 shares of stock for $30.00 per share on 70% margin. Assume Gerry holds the stock for one year and that his interest costs will be $90 over the holding period. Gerry also received dividends amounting to $0.60 per share. Ignoring commi..
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Consider a project to supply 107 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $1,970,000 five years ago; if the land were sold today, it would net you $2,170,0..
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8 years ago you started making annual deposits of $365 into an account paying 8% annual return. You continue to make these deposits every year without fail. If you keep doing this every year for the next 7 years, how much money will you have in 7 yea..
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It’s the end of the summer and your firm has its annual Family Picnic Day on the Saturday of Labor Day weekend. It is a big event: games for kids, a magician who makes balloon animals, tons of great food, kegs of beer, a band for musical entertainmen..
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