Nancys expenditure on good

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Q1. In 2011 Company XYZ had sales of 345,620million, net operating profit after taxes of 10,250 million, and employed $62,650 million in debt and equity capital. Company XYZ cost of capital was 6.5%. What was XYZ EVA in 2011?

Q2. Nancy spends all her income on good 1 and good 2. As p1 increases while p2 remains fixed, Nancy's price-offer path is horizontal. Explain how does Nancy's expenditure on good 1 respond to changes in p1?

Q3. You need to invest in a hot dog stand near the ballpark. As you include 03.5 probabilities that you can turn your current $15,000 into $50,000 and a 0.65 probability which fierce opposition will drive you to ruin, losing all your money. If you choose not to enter also you keep your $15,000. Elucidate would you enter the market?

Reference no: EM138309

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