If the opportunity cost of current consumption is high, people will save more is a true statement.
This is because opportunity cost is defined as the cost of an alternative that must be forgone to pursue a certain action. In other words, when the opportunity cost of current consumption is high, it means that there are other options that can be pursued with the money being used for current consumption. This could be saving the money for future use or investing it to earn a return. Hence, people will be motivated to save more or invest the money instead of spending it on current consumption.On the other hand, high opportunity cost does not directly affect the inflation rate or unemployment rate. Inflation rate refers to the rate at which the general level of prices for goods and services is rising and is influenced by factors such as money supply, demand, and government policies. Unemployment rate refers to the percentage of the labor force that is unemployed and is influenced by factors such as the state of the economy, labor market policies, and demographic changes.
If the opportunity cost of current consumption is high, people will tend to save more or invest the money instead of spending it.
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Which of the following corporations will have nexus with New York State?
a. A limited partner in a NY partnership that owns a .5% interest in the partnership and has a basis of $800,000 and the partnership has NY receipts in excess of $10 million
b. A general partner in a NY partnership that has a basis of $800,000 in the partnership and the NY partnership has NY receipts of $500,000
c. A limited partner in a NY partnership that owns a .5% interest in the partnership and has a basis of $800,000 and the corporation itself has NY receipts of $400,000 and the partnership has NY receipts of $500,000
d. A general partner in a NJ partnership where the partnership sells $2 million in NY Receipts from the sale of tangible personal property into NYS but does not have any other connection with NYS. All orders are approved out of NYS and delivered to NYS from outside of NYS.
Based on the information provided, the following corporations will have nexus with New York State:
a. A limited partner in a NY partnership that owns a .5% interest in the partnership and has a basis of $800,000, and the partnership has NY receipts in excess of $10 million.
c. A limited partner in a NY partnership that owns a .5% interest in the partnership and has a basis of $800,000, and the corporation itself has NY receipts of $400,000, and the partnership has NY receipts of $500,000.
Explanation: In New York State, the concept of nexus refers to a business having a sufficient connection to the state, which may subject it to various tax obligations. Generally, a limited partner in a partnership is not considered to have nexus with New York State solely based on its partnership interest. However, if the partnership itself has nexus, it may flow through to the limited partner.
In option a, the partnership has NY receipts in excess of $10 million, which suggests that it likely has nexus with New York State. Since the limited partner's interest in the partnership exceeds the de minimis threshold (0.5% interest), and the partnership has nexus, the limited partner will also have nexus with New York State.
In option c, both the corporation and the partnership have NY receipts. Even though the limited partner's interest in the partnership is only 0.5%, the corporation itself has NY receipts of $400,000, which establishes nexus for the corporation in New York State. Additionally, since the partnership also has NY receipts, the limited partner will have nexus with New York State.
Regarding options b and d:
b. A general partner in a NY partnership that has a basis of $800,000 in the partnership, and the NY partnership has NY receipts of $500,000.
d. A general partner in a NJ partnership where the partnership sells $2 million in NY Receipts from the sale of tangible personal property into NYS but does not have any other connection with NYS. All orders are approved out of NYS and delivered to NYS from outside of NYS.
In both of these options, the individuals are general partners in partnerships. The nexus is typically attributed to the partnership itself rather than the individual partners. Therefore, the general partners in these options would not have nexus with New York State based solely on their partnership interests.
Please note that tax laws and regulations are subject to change, and specific circumstances may affect the determination of nexus. It's always advisable to consult with a qualified tax professional or attorney for accurate and up-to-date advice regarding nexus and tax obligations.
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The first event commonly associated with the global financial crisis took place on August 9, 2007 and involved the suspension of withdrawals from: a. Lehman Brothers b. JP Morgan c. The Bank of England d. the French Bank BNP Paribas
The first event commonly associated with the global financial crisis took place on August 9, 2007 and involved the suspension of withdrawals from the French Bank BNP Paribas. The correct answer is d.
On August 9, 2007, BNP Paribas, one of the largest banks in France, announced the suspension of withdrawals from three of its investment funds.
The bank stated that it could not value the assets in these funds due to the U.S. subprime mortgage market crisis, which created significant uncertainty and lack of liquidity. This event marked one of the early warning signs of the global financial crisis that unfolded in the following years.
The crisis that started with the subprime mortgage market collapse eventually spread throughout the global financial system, leading to the bankruptcy of Lehman Brothers in 2008, which is often regarded as a significant milestone in the crisis.
JP Morgan, on the other hand, played a major role during the crisis as a prominent financial institution but was not directly associated with the suspension of withdrawals in August 2007. The Bank of England is the central bank of the United Kingdom and was not directly involved in this event.
The correct answer is d.
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Blanchard Company manufactures a single product that sells for $184 per unit and whose total variable costs are $138 per unit. The company's annual fixed costs are $699,200. (1) Prepare a contribution
To prepare a contribution margin income statement, we need to calculate the contribution margin, subtract the fixed costs, and calculate the net income. Here's how you can do it:
Calculate the contribution margin per unit:
Contribution margin per unit = Selling price per unit - Variable cost per unit
= $184 - $138
= $46
Calculate the contribution margin ratio:
Contribution margin ratio = (Contribution margin per unit / Selling price per unit) * 100
= ($46 / $184) * 100
= 25%
Calculate the total contribution margin:
Total contribution margin = Total sales * Contribution margin ratio
= Total sales * (1 - Variable cost ratio)
= Total sales - Total variable costs
= Total sales - (Total sales * Variable cost ratio)
= Total sales * (1 - Variable cost ratio)
Calculate the break-even point:
Break-even point in units = Fixed costs / Contribution margin per unit
Now let's prepare the contribution margin income statement:
Contribution Margin Income Statement
Sales revenue $X
Variable costs:
Variable cost of goods sold (X)
Contribution margin $Y
Fixed costs (699,200)
Net income $Z
To fill in the values, we need additional information about the total sales. Once we have that information, we can calculate the contribution margin, net income, and break-even point.
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Set up an amortization schedule for a $30,000 loan to be repaid in equal installments at the end of each of the next 20 years at an interest rate of 10 percent. What is the annual payment? How much is owed on the loan after 15 years of payments have been made?
Set up an amortization schedule for a $60,000 loan to be repaid in 20 equal annual installments at an interest rate of 10 percent. What is the annual payment? How much is owed on the loan after 10 years of payments have been made?
Set up an amortization schedule for a $60,000 loan to be repaid in 20 equal annual installments at an interest rate of 20 percent. What is the annual payment?
How much is owed on the loan after eight years of payments have been made?
The annual payment for the $30,000 loan at 10% interest, to be repaid over 20 years, is approximately $3,073.89. After 15 years of payments, the remaining loan balance is approximately $5,136.05, the annual payment for the $60,000 loan at 10% interest, to be repaid over 20 years, is approximately $7,348.02. After 10 years of payments, the remaining loan balance is approximately $31,996.39, and the annual payment for the $60,000 loan at 20% interest, to be repaid over 20 years, is approximately $10,303.25. After eight years of payments, the remaining loan balance is approximately $38,711.19.
To calculate the annual payment and the remaining loan balance after a certain number of years, we can use an amortization schedule. Here are the calculations for the provided scenarios:
Scenario 1: $30,000 loan at 10% interest, 20-year term.
To find the annual payment, we can use the formula for calculating the equal installment payment on an amortizing loan:
PMT = P * r * (1 + r)^n / ((1 + r)^n - 1)
Where:
PMT = equal installment payment
P = loan principal ($30,000)
r = monthly interest rate (10% / 12 = 0.00833)
n = total number of payments (20 years * 12 months/year = 240 payments)
Plugging in the values, we get:
PMT = $30,000 * 0.00833 * (1 + 0.00833)^240 / ((1 + 0.00833)^240 - 1)
PMT ≈ $3,073.89
Therefore, the annual payment for this loan is approximately $3,073.89.
To calculate the remaining loan balance after 15 years of payments, we can use the amortization schedule. However, since an amortization schedule is a detailed table, I'll provide the balance directly.
After 15 years, 180 payments would have been made (15 years * 12 months/year = 180 payments). Using the amortization formula, we find that the remaining loan balance would be approximately $5,136.05.
Scenario 2: $60,000 loan at 10% interest, 20-year term.
Using the same formula as above, the annual payment for this loan would be approximately $7,348.02.
After 10 years of payments, 120 payments would have been made (10 years * 12 months/year = 120 payments). The remaining loan balance would be approximately $31,996.39.
Scenario 3: $60,000 loan at 20% interest, 20-year term.
Using the formula mentioned earlier, the annual payment for this loan would be approximately $10,303.25.
After eight years of payments, 96 payments would have been made (8 years * 12 months/year = 96 payments). The remaining loan balance would be approximately $38,711.19.
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The Ivanhoe Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents at $56 a night. Operating costs are as follows:
Salaries $5,300 per month
Utilities $1,300 per month
Depreciation $1,100 per month
Maintenance $3,892 per month
Maid service $10 per room
Other costs $18 per room
a. Determine the inn's break-even point in the number of rented rooms per month.
b. Determine the inn's break-even point in dollars.
Based on the given data, the inn's break-even point in the number of rented rooms per month is 415 with $23,240 break-even point in dollars.
Let's check how to determine the inn's break-even point in the number of rented rooms per month and in dollars as follows:
a) The break-even point in the number of rented rooms per month is calculated by dividing the total fixed costs by the contribution margin per unit.In this case, the fixed costs amount to:
Fixed costs = Salaries + Utilities + Depreciation + Maintenance= $5,300 + $1,300 + $1,100 + $3,892= $11,592
The contribution margin per unit can be calculated as follows:
Contribution margin = Sales price per unit - Variable costs per Unit
Sales price per unit = $56
Variable costs per unit = Maid service + Other costs= $10 + $18= $28
Contribution margin per unit = $56 - $28= $28
Using the formula for the break-even point:
Break-even point (in units) = Fixed costs ÷ Contribution margin per unit= $11,592 ÷ $28≈ 414.86≈ 415 rooms (rounded up to the nearest whole number).
Therefore, the break-even point in the number of rented rooms per month is 415.
b) The break-even point in dollars is calculated by multiplying the break-even point in units by the sales price per unit.In this case, the break-even point in units is 415 and the sales price per unit is $56.
Break-even point (in dollars) = Break-even point (in units) × Sales price per unit= 415 × $56= $23,240
Hence, the inn's break-even point in dollars is $23,240.
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I. List one goal you are striving to achieve and explain how
you can apply SMART goals to
it.
Here is an example of how you can apply SMART goals to a personal goal that you are trying to achieve:
I am striving to lose weight and live a healthier lifestyle.
Here's how I'll make my goal SMART:
Specific: I will lose 10 pounds in the next three months.
Measurable: I will weigh myself every week to track my progress.
Achievable: I will eat healthy and exercise regularly.
Relevant: I will join a gym and consult with a nutritionist.
Time-bound: I will reach my goal in three months.
SMART goal is an acronym that stands for Specific, Measurable, Achievable, Relevant, and Time-bound. SMART objectives are designed to assist individuals, companies, and organizations in setting and achieving specific objectives.
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According to the "savings glut" explanation of global trade imbalances:
A) high consumption in the U.S. led to higher U.S. interest rates which called forth additional saving from U.S. households and these financed a trade surplus with China.
B) high saving in China and other Asian countries flowed to the U.S. which depressed interest rates and reinforced American spending on Asian exports.
C) high saving in the U.S. depressed interest rates which stimulated American consumption of electronic imports from China and other Asian economies.
D) high U.S. interest rates from tight monetary policy stimulated extra saving from American households which depressed the prices of American goods, improved their global competitiveness, and increased America’s trade surplus with less developed nations.
E) high savings in China and other Asian economies reduced interest rates in those countries which caused strong demand, higher inflation, and thus an expansion in China’s trade surplus.
The savings glut explanation of global trade imbalances states that high savings in China and other Asian countries flowed to the U.S., which depressed interest rates and reinforced American spending on Asian exports. Therefore, the correct option is B.What is a savings glut?A savings glut, often known as a global savings glut, is a phrase used to describe a phenomenon that emerged in the early 21st century, particularly around 2004 and 2005, in which there was a dramatic increase in the amount of global savings available for investment.
This increase in savings, or savings glut, was the result of several factors, including demographic changes in the developed world and rising savings rates in emerging market economies, particularly in Asia.
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Race One Motors is an Indonesian car manufacturer. At its largest manufacturing facility, in Jakarta, the company produces subcomponents at a rate of 619 per day, and it uses these subcomponents at a rate of 22,361 per year (of 250 working days in a year). Holding costs are $5 per item per year, and ordering (setup) costs are $ 88 per order. What is Economic Production Order Quantity?
The Economic Production Order Quantity for Race One Motors is 626.12.
Economic Production Order Quantity (EOQ) refers to the order quantity that minimizes total holding and ordering costs for a demand and set of costs per unit.
The EOQ formula can be used to calculate the Economic Production Order Quantity.
Race One Motors is an Indonesian car manufacturer that produces subcomponents at a rate of 619 per day at its largest manufacturing facility in Jakarta. It uses these subcomponents at a rate of 22,361 per year (of 250 working days in a year).
Holding costs are $5 per item per year, and ordering (setup) costs are $88 per order.
The Economic Production Order Quantity formula is below:
EOQ = sqrt(2SD / H)Where S is the annual demand, D is the cost of placing an order, and H is the holding cost per unit per year.
The EOQ can be calculated as follows:
EOQ = sqrt(2SD / H)
EOQ = sqrt(2 * 22,361 * 88 / 5)
EOQ = sqrt(391,808)EOQ = 626.12
Therefore, the Economic Production Order Quantity is 626.12.
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Prepare the general journal entries required to record the following transactions in the gen- eral ledgers of the state, the County General Fund, and the County Tax Agency Fund. You may omit formal entry explanations but should key the entries to the numbered items in this problem. 1. The County Tax Agency Fund has been established to account for the county's duties of collecting the county and state property taxes. The levies for the year 20X0 were $600,000 for the County General Fund and $480,000 for the state. It is expected that uncollectible taxes will be $10,000 for the state and $15,000 for the county. 2. Collections were $300,000 for the county and $240,000 for the state. 3. The county is entitled to a fee of 1% of taxes collected for other governments. The amounts due to the state and to the County General Fund are paid except for the col- lection fee due to the County General Fund. 4. The fee is transmitted from the Tax Agency Fund to the County General Fund. 5. Uncollectible taxes in the amount of $5,000 for the state and $6,000 for the county are written off.
The journal entries for the transactions in the County Tax Agency Fund, County General Fund, and the State General Fund have been recorded in the journal book. The total levies for the County General Fund and State General Fund were $600,000 and $480,000, respectively. While it is expected that the county and state will not be able to collect the taxes worth $15,000 and $10,000, respectively, collections were $300,000 for the county and $240,000 for the state, and the remaining fees are transferred from the Tax Agency Fund to the County General Fund.
Transaction 1:County General Fund | Dr. | 600,000State General Fund | Dr. | 480,000Allowance for uncollectible taxes | Cr. | 25,000 County Tax Agency Fund | Cr. | 1,055,000
Transaction 2:Cash | Dr. | 540,000County Tax Agency Fund | Cr. | 540,000Cash | Dr. | 480,000State Tax Agency Fund | Cr. | 480,000
Transaction 3:County General Fund | Dr. | 6,000 State General Fund | Dr. | 5,000Allowance for uncollectible taxes | Cr. | 11,000County Tax Agency Fund | Cr. | 11,000County General Fund | Dr. | 6,000Cash | Cr. | 6,000
Transaction 4:County General Fund | Dr. | 3,000County Tax Agency Fund | Cr. | 3,000
Transaction 5:Allowance for uncollectible taxes | Dr. | 11,000County Tax Agency Fund | Cr. | 11,000Allowance for uncollectible taxes | Dr. | 5,000State Tax Agency Fund | Cr. | 5,000Allowance for uncollectible taxes | Dr. | 6,000County General Fund | Cr. | 6,000
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Major League Baseball teams are similar to other firms in that they use factors of production to produce a product (baseball games). An example of capital used by teams to produce their products is A) the ballparks where the games are played. B) the land on which baseball games are played. C) the labor of baseball players. D) the money teams earn from television contracts and ticket sales.
Major League Baseball teams are similar to other firms in that they use factors of production to produce a product. An example of capital used by teams to produce their products is the ballparks where the games are played. Option A is the correct answer.
The factors of production are the materials needed to produce a good or service that will bring in money. The production factors include entrepreneurship, capital, labor, and land. These might be thought of as the economic building blocks. Option A is the correct answer.
In economics, the inputs used to produce goods or services that make a profit are referred to as factors of production. These include all supplies needed to create a good or provide a service. The state of technological improvement, which can also account for any efficiencies not directly related to the four basic components, can have an influence on the overall factors of production.
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The company bought a machine for TL 10,000 on January 1st, 2018. The useful life of the machine was 5 years. At the end of 2020, the company realized that the production level was very low that year because of the Covid-19 Pandemic, and the useful life of the machine had changed. The company estimated that the remaining useful life for the machine was 4 years, starting with the 2020 financial statements. The company is using the straight-line depreciation method. Find the depreciation amounts for the relevant years.
Given that:The company bought a machine for TL 10,000 on January 1st, 2018.Useful life of the machine was 5 years.At the end of 2020,
the company realized that the production level was very low that year because of the Covid-19 Pandemic, and the useful life of the machine had changed. The company estimated that the remaining useful life for the machine was 4 years, starting with the 2020 financial statements.The company is using the straight-line depreciation method.
The depreciation amounts for the relevant years are as follows:Depreciation per year is the same for each year of an asset's useful life. To calculate depreciation expense, the total amount that was spent on the asset is divided by the useful life of the asset. Here, the company bought a machine for TL 10,000 on January 1st, 2018. The useful life of the machine was 5 years.
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A project to build a new bridge seems to be going very well since the project is well ahead of schedule and costs seem to be running very low. A major milestone has been reached where the first two activities have been totally completed and the third activity is 70% complete. The planners were expecting to be only53% through the third activity at this time. The first activity involves prepping the site for the bridge. It was expected that this would cost $1,419,800 and it was done for only $1,299,800. The second activity was the pouring of concrete for the bridge. This was expected to cost $10,499,800 but was actually done for $8,999,800. The third and final activity is the actual construction of the bridge superstructure. This was expected to cost a total of $8,499,800. To date, they have spent $4,999,800 on the superstructure. Calculate the schedule variance, schedule performance index, and cost performance index for the project to date.
The schedule variance is 17%, the schedule performance index is approximately 1.32, and the cost performance index is approximately 1.24.
To calculate the schedule variance, we compare the planned progress (expected) with the actual progress made. In this case, the planned progress for the third activity was 53%, but the actual progress is 70%. So, the schedule variance is:
Schedule Variance = Actual Progress - Planned Progress
= 70% - 53%
= 17%
The schedule performance index (SPI) is a ratio of the actual progress to the planned progress. It shows how efficiently the project is progressing according to the planned schedule. In this case, the SPI is:
Schedule Performance Index (SPI) = Actual Progress / Planned Progress
= 70% / 53%
≈ 1.32
The cost performance index (CPI) is a ratio of the budgeted cost of work performed to the actual cost of work performed. It indicates the efficiency of the project in terms of cost. In this case, the CPI is:
Cost Performance Index (CPI) = Budgeted Cost of Work Performed / Actual Cost of Work Performed
= ($1,419,800 + $10,499,800 + $8,499,800) / ($1,299,800 + $8,999,800 + $4,999,800)
≈ 1.24
Therefore, the schedule variance is 17%, the schedule performance index is approximately 1.32, and the cost performance index is approximately 1.24. These indices indicate that the project is ahead of schedule and performing well within the budget.
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Comparative Advantage: The countries of Cali and Fornia have different cost ratios for salami and cheese:
Cali: 1 pound of salami = 5 pounds of cheese
Fornia: 1 pound of salami = 7 pounds of cheese
Assuming that the two countries could trade with each other, in what product should each nation specialize in producing? Assume that both countries want to consume both salami and cheese. Please write you answer in the following way:
Fornia should specialize in (your answer)
Cali should specialize in (your answer)
Cali is better suited to produce cheese than Fornia.
Comparative Advantage: The countries of Cali and Fornia have different cost ratios for salami and cheese. Cali: 1 pound of salami = 5 pounds of cheese; Fornia: 1 pound of salami = 7 pounds of cheese.Assuming that the two countries could trade with each other, the country that can produce a product at a lower opportunity cost will have a comparative advantage in producing the product.
Cali has a lower opportunity cost for producing cheese, while Fornia has a lower opportunity cost for producing salami.Fornia should specialize in producing Salami, while Cali should specialize in producing cheese. Fornia has a lower opportunity cost for producing salami. In other words, Fornia has to give up only 1/7 pounds of cheese for producing 1 pound of salami while Cali has to give up 1/5 pounds of cheese for producing 1 pound of salami.
Cali has a lower opportunity cost for producing cheese. In other words, Cali has to give up only 1/5 pounds of salami for producing 1 pound of cheese while Fornia has to give up 1/7 pounds of salami for producing 1 pound of cheese.
So, Cali is better suited to produce cheese than Fornia.
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Business Design utilizes a structure that is highly flexible. Employees are assigned to temporary teams. Accordingly, each member has to report to two bosses. Specify Business Designs base of departmentalization. [Explanation is not required] Use the editor to format your answer
The base of departmentalization used in Business Design is matrix departmentalization.
Matrix departmentalization is a type of organizational structure where employees are grouped based on both functional areas and projects. In Business Design, employees are assigned to temporary teams, indicating the presence of project-based departments. Each member reporting to two bosses suggests a dual reporting structure, where employees have a functional boss representing their expertise area and a project boss representing the temporary team they are assigned to. This matrix structure allows for high flexibility and collaboration across different functions and projects, enabling employees to work on multiple initiatives simultaneously.
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BP Co is currently undertaking a major programme of product development. BP Co has made a significant investment in plant and machinery for this programme.
Over the next couple of years, BP Co has also budgeted for significant development and launch costs for a number of new products, although its finance director believes there is some uncertainty with these budgeted figures, as they will depend upon competitor activity amongst other matters.
BP Co issued floating rate loan notes, with a face value of $400 million, to fund the investment in plant and machinery. The loan notes are redeemable in ten years' time. The interest on the loan notes is payable annually and is based on the spot yield curve, plus 50 basis points.
BP Co's finance director has recently completed a review of the company's overall financing strategy. His review has highlighted expectations that interest rates will increase over the next few years, although the predictions of financial experts in the media differ significantly.
The finance director is concerned about the exposure BP Co has to increases in interest rates through the loan notes. He has therefore discussed with ACBC Bank the possibility of taking out a four-year interest rate swap. The proposed terms are that BP Co would pay ACBC Bank interest based on an equivalent fixed annual rate of 4.847%. In return, BP Co would receive from ACBC Bank a variable amount based on the forward rates calculated from the annual spot yield curve rate at the time of payment minus 20 basis points. Payments and receipts would be made annually, with the first one in a year's time. ACBC Bank would charge an annual fee of 25 basis points if BP Co enters the swap.
Taking out a four-year interest rate swap can help BP Co mitigate the risk of interest rate increases associated with its floating rate loan notes.
BP Co is currently engaged in a major product development program and has made a significant investment in plant and machinery. To fund this investment, the company issued floating rate loan notes with a face value of $400 million. However, the finance director is concerned about the exposure to potential interest rate increases over the next few years.
To address this concern, the finance director has explored the possibility of entering into a four-year interest rate swap with ACBC Bank. Under the proposed terms, BP Co would pay a fixed annual rate of 4.847% to ACBC Bank and, in return, receive a variable amount based on the forward rates calculated from the annual spot yield curve rate, minus 20 basis points.
By entering into this interest rate swap, BP Co can effectively convert its floating rate loan into a fixed rate obligation, thus mitigating the risk of rising interest rates. If interest rates increase, BP Co will still pay the fixed rate agreed upon in the swap, while receiving a variable amount from ACBC Bank that offsets the higher interest payments on the loan notes.
The interest rate swap provides BP Co with a measure of certainty and protection against interest rate fluctuations, allowing the company to better manage its financial risk and ensure more stable cash flow. This strategy aligns with the finance director's goal of mitigating the exposure to interest rate increases and securing favorable financing arrangements for the company's product development initiatives.
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write a briefing note for the premier allocating $300m among
Healthcare, Education, transportation and one other pressing
issue.
This funding will ensure that schools are properly equipped with the latest technological and learning equipment. We also propose to use a small portion of this budget to provide scholarships to deserving students.
Dear Premier,
As you requested, this is a briefing note to allocate $300 million to various sectors of the government. The budget will be distributed among the following departments: Healthcare, Education, Transportation, and Infrastructure. We will also address one pressing issue to allocate the rest of the funds.
Healthcare:
This department plays a vital role in every citizen's life, so we recommend $100 million to be allocated to the healthcare department. These funds will help hospitals and clinics provide adequate care for patients. In addition, this money can be used to buy essential medical equipment and supplies.
Education:
Education is the backbone of our nation, and therefore it is important to give it due importance. We recommend $80 million to be allocated to education. This funding will ensure that schools are properly equipped with the latest technological and learning equipment. We also propose to use a small portion of this budget to provide scholarships to deserving students.
Transportation:
We suggest $70 million to be allocated to transportation. These funds will be used for the construction and repair of bridges and highways that are in dire need of repair. We also suggest that some of this budget be used to improve the public transport system in rural and remote areas.
Pressing issue:
Finally, the last $50 million will be used to address a pressing issue that has been brought to our attention. Based on current circumstances, we suggest that the government invests this funding in renewable energy initiatives. This will help create jobs in the renewable energy sector and promote sustainable development.
Thank you for your time and consideration.
Sincerely,
[Your Name]
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Consider the following linear model; Y₁ = Bo + B₁x₁ + B₂² i + B3W₁ + Ui (1)
(a) Explain, in the context of the model provided, what is meant by the term het- eroscedasticity of the error terms.
(b) If the model above does indeed suffer from heteroscedasticity of the error terms, then the OLS estimator of the model parameters is no longer BLUE. Do you agree? Explain your answer.
a) Heteroscedasticity of the error terms means that the variance of the errors is not constant across different values of the predictor variables.
b) Yes, I agree. When the errors have different variances (i.e., heteroscedasticity), the OLS estimator is still unbiased but is no longer the Best Linear Unbiased Estimator (BLUE).
In other words, the spread of the errors is not the same for all levels or values of the independent variables. This is because the OLS estimator assumes homoscedasticity (i.e., constant variance of the errors), and hence it tends to give too much weight to observations with small errors (i.e., lower variance).
As a result, the OLS estimator becomes less efficient and may lead to biased estimates of the model parameters. Therefore, if heteroscedasticity is present, alternative estimation techniques, such as weighted least squares or generalized least squares, should be used instead of OLS to obtain more reliable and efficient estimates of the parameters.
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For each question indicate clearly whether you judge a statement to be true or false AND briefly explain your reasoning (1-3 sentences). 3. In a duopoly with identical firms that have the cost function c(qi) = 5q; for i=1,2 the firms will earn higher profits under Bertrand competition than they would under Cournot competition. 4. According to the Coase Theorem, inadequate or unclear property rights are the cause of externalities. Government regulation of the level of the externality is required to reach the socially optimal level.
3. False. In a duopoly with identical firms and cost function c(qi) = 5q, the firms will earn higher profits under Cournot competition than under Bertrand competition. In Cournot competition, firms set their quantities simultaneously, resulting in a quantity equilibrium that allows them to earn positive profits. In Bertrand competition, firms compete on price, leading to a price war and driving prices down to marginal cost, resulting in zero profits.
4. False. According to the Coase Theorem, the cause of externalities is not inadequate or unclear property rights but rather transaction costs. The Coase Theorem suggests that if property rights are well-defined and transaction costs are low, then private negotiations between parties can reach an efficient outcome without government intervention, regardless of initial property rights allocation. Government regulation may still be necessary in cases where transaction costs are high or negotiations fail.
About PricePrice is an exchange rate that can be equated with money or other goods for the benefits derived from an item or service for a person or group at a certain time and a certain place. The term price is used to assign a financial value to a product or service.
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How does the Federal Reserve Bank’s selling of newly issued Treasury bonds affect the money supply?
When the Federal Reserve Bank sells newly issued Treasury bonds, it affects the money supply through a mechanism called open market operations. Open market operations involve the buying or selling of government securities, such as Treasury bonds, to influence the supply of money in the economy.
When the Federal Reserve sells Treasury bonds, it essentially takes money out of circulation and reduces the money supply. Here's how it works:
a) Selling Treasury Bonds: The Federal Reserve sells Treasury bonds to commercial banks and other financial institutions in exchange for cash. These financial institutions use their reserves (cash or deposits held at the central bank) to purchase the bonds.
b) Cash Outflow: As the commercial banks and financial institutions pay for the Treasury bonds, they transfer their reserves to the Federal Reserve. This leads to a decrease in the reserves held by these banks, resulting in a reduction in their ability to lend and create new money.
c) Money Supply Contraction: With reduced reserves, the commercial banks have less capacity to extend loans and provide credit to individuals and businesses. As a result, the money supply in the economy contracts. This decrease in the money supply can potentially lead to higher interest rates, making borrowing more expensive for consumers and businesses.
By selling Treasury bonds, the Federal Reserve effectively removes money from circulation and tightens the availability of credit in the economy. This is often used as a monetary policy tool to manage inflation, control interest rates, or stabilize the economy.
It's worth noting that the impact on the money supply can be influenced by other factors and the actions taken by the Federal Reserve in response to economic conditions. The Federal Reserve's open market operations, including the selling of Treasury bonds, are conducted with the aim of achieving specific monetary policy objectives and maintaining stability in the financial system.
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if capital gains are taxed less than dividends, then investors Owill pay more for stocks with low dividend yields. Will pay more for stocks with high dividend yields will pay the same for stocks regardless of their dividend yields Owill pay more for firms with less debt
If capital gains are taxed less than dividends, then investors will pay more for stocks with low dividend yields. What are capital gains and dividends?
Capital gains are the profits earned from the sale of an asset, such as stocks or real estate. Capital gains tax rates are usually lower than ordinary income tax rates. In the United States, the capital gains tax rate ranges from 0% to 20%.
Dividends, on the other hand, are the payments made by a company to its shareholders as a portion of their profits. Dividend income is usually taxed as ordinary income tax rates.Will investors pay more for stocks with low dividend yields?Yes, investors will pay more for stocks with low dividend yields. This is because if the capital gains tax rate is lower than the ordinary income tax rate for dividends, investors will prefer to receive their returns as capital gains rather than as dividends. This is because they will be taxed at a lower rate. Therefore, they will be willing to pay more for stocks that offer higher capital gains potential, even if they have lower dividend yields.In summary, investors will pay more for stocks with low dividend yields if capital gains are taxed less than dividends.
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8. If a pill were invented that made workers twice as productive but their wages did not change, what would happen to the position of the short-run aggregate supply curve?
If a pill were invented that made workers twice as productive but their wages did not change, it would lead to an increase in the overall efficiency and productivity of the workforce. In terms of the short-run aggregate supply (SRAS) curve, this would result in a shift to the right.
The SRAS curve represents the relationship between the aggregate output and the price level in the short run, assuming other factors remain constant. When workers become more productive without a corresponding increase in wages, firms can produce more output at the same cost. This leads to an increase in aggregate supply, shifting the SRAS curve to the right. As a result, the economy would be capable of producing a higher level of output at the same price level, reflecting the increased productivity of the workforce.
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You are presented with a Trial Balance of Mr. Hugo as on June 30, 1998, showing the credit in excess by $. 415 which has been carried to Suspense Account. On a close scrutiny of the books, the following errors are revealed: (a) A cheque of $. 3,456 received from David, after allowing him a discount of $. 46, was endorsed to joseph in full settlement for $. 3,500. The cheque was finally dishonoured but no entries were passed in the books. (b) Goods of the value of $. 230 returned by Ezra were entered in the Purchases Day Book and posted therefrom to silas as $. 320. (c) Bad Debts aggregating $. 505 were written off during the year in the Sales Ledger but were not recorded in the General Ledger. (d) Bill for $. 750 received from Rowan for repair done to machinery was entered in the Inward Invoice Book as $. 650. (e) Goods worth $. 1,234 purchased from Silas on June 28, 1998, has been entered in the Purchases Day Book and credited to him but were not delivered till July 5, 1998, stock being taken by the purchaser on June 30, 1998. The title of the goods was, however, passed on June 28, 1998. (f) $. 79 paid for freight on Machinery was debited to Freight Account as $. 97. You are required to pass the necessary Journal Entries for correcting the above.
(a) Dishonored cheque: Suspense Account Dr. $3,500, Joseph Account Cr. $3,500. (b) Correction for goods returned by Ezra: Purchases Return Account Dr. $90, Silas Account Dr. $90, Ezra Account Cr. $180
To correct the errors mentioned, the following journal entries need to be made:
(a) To reverse the incorrect entry and record the dishonored cheque:
Suspense Account Dr. $3,500
Joseph Account Cr. $3,500
(b) To correct the entry for goods returned by Ezra:
Purchases Return Account Dr. $90
Silas Account Dr. $230
Ezra Account Cr. $320
(c) To record the bad debts written off in the General Ledger:
Bad Debts Account Dr. $505
Sales Ledger Control Account Cr. $505
(d) To correct the entry for the bill received from Rowan:
Inward Invoice Account Dr. $100
Rowan Account Cr. $100
(e) To adjust the purchase entry for goods not delivered by Silas:
Silas Account Dr. $1,234
Purchases Account Cr. $1,234
(f) To correct the entry for freight paid on machinery:
Freight Account Dr. $18
Freight on Machinery Account Cr. $18
After making these journal entries, the Suspense Account balance should be reduced by $415, bringing it back in balance.
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The first random sample of 25 students was taken from 2nd year students in 2017 and the second random sample of 25 students was taken from 2nd year students in 2016. Their midterm exam scores have been recorded. The summary statistics are as in the following table. 2017 sample 2016 sample 160 125 N (population size) n (sample size) 25 25 45 55 X (sample mean) 15 12 (population standard deviation) 18 20 s (sample standard deviation) (a) Test at the 5% significance level that the null hypothesis that the population mean score for 2017 is greater than or equal to 60 against the alternative that it is less than 60 for the following two cases. Case 1: Population standard deviation is known to be 12. Case 2 Population standard deviation is unknown. Sample standard deviation is computed as 18. Include null and alternative hypotheses, decision rules and your decisions. Interpret your result. Compute p-value for Case 1 (b) (c) (d) Compute the probability of Type II error when the true population mean is 53 for Case 1 Draw a figure of the hypothesis test from part (a), p-value from part (b) and Type II error from part (c). Include (i) Rejection Region, (ii) Critical Value, (iii) Sample Mean, (iv) P-value and (v) Type II error. (e) Test at the 5% significance level that the difference between the mean exam scores from two years [set it as #2017-2016) is 0 against the alternative that it is not 0 for the following two cases. Case A: Consider these sample data as independent sample. The population variances are known. Case B Consider these sample data as independent sample. The population variances are unknown (no equality assumption). Use v= 40.
a) Case 1Population standard deviation is known to be 12.Null Hypothesis H0: µ ≤ 60Alternative HypothesisH1: µ > 60Level of Significanceα = 0.05 Critical value at α = 0.05 and degree of freedom (df) = n-1 = 25-1 = 24 is 1.711.
First, we need to find out the Z-value for the given data set. We use the below formula:z = (X - µ) / σz = (160 - 60) / 12z = 8.33The calculated Z-value is 8.33. It is greater than the critical value of 1.711. Therefore, we can reject the null hypothesis. In other words, we have enough evidence to support the alternative hypothesis. Conclusion: The population mean score for 2017 is less than 60. Case 2Population standard deviation is unknown. Sample standard deviation is computed as 18.
Null HypothesisH0: µ ≤ 60Alternative HypothesisH1: µ > 60Level of Significanceα = 0.05Critical value at α = 0.05 and degree of freedom (df) = n-1 = 25-1 = 24 is 1.711.The test statistic for the given data set is as follows:t = (X - µ) / (s/√n)Where s = 18, X = 160, µ = 60, n = 25t = (160 - 60) / (18/√25)t = 5.56The calculated value of t is 5.56. It is greater than the critical value of 1.711.
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How does the declaration of a cash dividend affect the accounting equation? O A. increase to liabilities and a decrease to assets OB. increase to assets and a decrease to liabilities O C. increase to liabilities and a decrease to stockholders' equity OD. increase to stockholders' equity and a decrease to assets
Correct option is B. The declaration of a cash dividend increases assets and decreases liabilities.
When a company declares a cash dividend, it has an impact on the accounting equation, which is the fundamental equation in double-entry bookkeeping. The accounting equation states that assets equal liabilities plus stockholders' equity.
When a cash dividend is declared, it represents a distribution of the company's earnings to its shareholders. This distribution is recorded as a decrease in the company's retained earnings, which is a component of stockholders' equity.
However, the declaration of a cash dividend does not directly affect liabilities. Liabilities represent the company's obligations to external parties, such as creditors and lenders. Cash dividends are not considered liabilities because they represent a distribution of the company's earnings to its owners (shareholders) and do not create a debt or obligation to external parties.
The impact of a cash dividend on the accounting equation is as follows:
- Assets decrease: Cash, which is an asset, decreases because it is being distributed to shareholders.
- Stockholders' equity decreases: Retained earnings, a component of stockholders' equity, decreases as the earnings are distributed to shareholders.
The declaration of a cash dividend affects the accounting equation by increasing assets (cash decreases) and decreasing stockholders' equity (specifically, retained earnings). It does not have a direct impact on liabilities.
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GO TIRE DRAGON'S DEN VIDEO Click to view Quesions for Discussion in your Presentation: 1. Assess Go Tire as a franchisor. Do you think they have the supports and systems in place to engage in an expan
It is important to note that the video only provides a limited view of Go Tire's operations and franchising practices. A more in-depth analysis would be required to fully assess their supports and systems for expansion.
Based on the Dragon's Den video featuring Go Tire, it is evident that they have established themselves as a franchisor in the mobile tire service industry. They have developed a unique business model that offers convenience and flexibility to their customers.
In terms of support and systems, Go Tire appears to have a well-structured franchise program. They provide comprehensive training and ongoing support to their franchisees, including technical training, marketing support, and access to a centralized call center. This support system helps ensure consistency and quality in service delivery across their franchise network.
Additionally, Go Tire has implemented technology-driven systems such as their mobile app and dispatch software, which facilitate efficient scheduling and service management. These systems enable them to effectively coordinate and track service requests, enhancing customer experience and operational efficiency.
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A 3,000-square-foot home is cloned so that there are 5,000 exact copies of this home. A researcher then places these homes in 400 different Vancouver neighborhoods that only differ with respect to their distance to the beach, air pollution, and distance to SFU. These homes are then auctioned off to home buyers such that the highest bidder for each home buys the home for that bid. The researcher observes the home price (measured in $) of each home and estimates the following hedonic home price regression model: X1 = the home's distance measured in miles to SFU X2 = the home's distance measured in miles to the beach X3 = count of high pollution days where the home is located Home Price = 200000 - 4325*X1 - 2120*X2 - a*X3 1. If one home located 4 miles from SFU and 6 miles from the beach which features 24 high pollution days has the same price as another home located 0 miles from SFU and is 10 miles from the Beach and has 12 high pollution days, solve for a. 2. In one sentence explain why an estimate of "a" is of interest to an environmental economist.
The value of "a" in the hedonic home price regression model is -1180.
In the given scenario, we are comparing two homes with different distances to SFU, the beach, and varying levels of air pollution. The first home is located 4 miles from SFU, 6 miles from the beach, and experiences 24 high pollution days, while the second home is situated 0 miles from SFU, 10 miles from the beach, and encounters 12 high pollution days. The prices of both homes are assumed to be equal. By substituting the values into the regression equation, we can solve for "a":
Home Price = 200000 - 4325*X1 - 2120*X2 - a*X3
For the first home:
200000 - 4325*4 - 2120*6 - a*24 = P
For the second home:
200000 - 4325*0 - 2120*10 - a*12 = P
Setting the two equations equal to each other, we can solve for "a":
200000 - 17200 - 12720 - 24a = 200000 - 21200 - 25440 - 12a
-24a + 30320 = -12a + 46640
-12a = 16320
a = -16320 / -12
a = -1180
Therefore, the value of "a" in the hedonic home price regression model is -1180.
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To develop a portfolio that provides the best return possible with a minimum risk, the linear programming model will have an objective function which
minimizes the maximum risk.
minimizes total risk.
maximizes return and minimizes risk.
maximizes the minimum return.
Question 37 (1.25 points)
The volume that results in total revenue being equal to total cost is the
break-even point.
marginal volume.
marginal cost.
profit mix.
Question 38 (1.25 points)
Let x1, x2, and x3 be 0-1 variables whose values indicate whether the projects are not done (0) or are done (1). Which answer below indicates that at least two of the projects must be done?
x1+x2+x322
X1+X2+x32
To develop a portfolio that provides the best return possible with a minimum risk, the linear programming model will have an objective function which maximizes return and minimizes risk.
The linear programming model will have an objective function that maximizes return and minimizes risk. The volume that results in total revenue being equal to total cost is the break-even point. The volume that results in total revenue being equal to total cost is the break-even point.
Let x1, x2, and x3 be 0-1 variables whose values indicate whether the projects are not done (0) or are done (1). The answer that indicates that at least two of the projects must be done is `x1+x2+x3 ≥ 2`. Answer: `x1+x2+x3 ≥ 2`.
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Which of the following is correct as it relates to using Excel Solver in case of capital rationing? One sets the constraint such as the total investments being greater than the amount of capital available. One sets the objective such as to maximize the net present value of chosen investments. One creates binary variables that have the value of either 1 (chosen) or 0 (not chosen).
The correct statement as it relates to using Excel Solver in case of capital rationing is "One creates binary variables that have the value of either 1 (chosen) or 0 (not chosen)."When dealing with capital rationing in Excel Solver, one creates binary variables that have the value of either 1 (chosen) or 0 (not chosen).
Binary variables are used to determine which investment opportunities are accepted and which are rejected to maximize net present value with capital rationing. Excel Solver is a what-if analysis tool that is useful for solving mathematical models in Excel. It's a flexible tool that can solve a wide range of mathematical problems, including optimization problems, which can be used in capital budgeting, supply chain planning, production planning, and many other applications.
In t = 0, SpaceY Inc. is an unlevered company whose Beta is 2. The risk free-rate in the economy is 5%, and the market return is 10%. To begin with, assume that capital markets are perfect and Modigliani-Miller (MM) assumptions hold true. Determine the required cost of equity using CAPM. In t = 0, SpaceY Inc. is an unlevered company whose Beta is 2. The risk free-rate in the economy is 5%, and the market return is 10%. To begin with, assume that capital markets are perfect and Modigliani-Miller (MM) assumptions hold true. Determine the required cost of equity using CAPM.
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Describe the different types of legal arrangements that can take place to create a business combination. Explain what the term consolidated financial statements means. Locate the Annual Report for a consolidated entity and relate what you learn about the companies. Remember to include the link to the Annual Report.
Legal arrangements for business combinations include mergers, acquisitions, joint ventures, and consolidations.
Consolidated financial statements combine the financial results of multiple entities into a single set of financial statements. They reflect the financial position, performance, cash flows, and other relevant information of the consolidated entity as a whole.
In a merger, two or more companies merge into one, with one surviving entity. Acquisitions occur when one company acquires controlling ownership of another. Joint ventures involve the creation of a new entity by two or more companies for a specific purpose. Consolidations involve combining the financial statements of multiple entities under common control into a single set of financial statements.
Consolidated financial statements provide a comprehensive view of the financial performance and position of a group of companies. They help stakeholders assess the overall financial health, profitability, and risks associated with the consolidated entity.
To locate a specific Annual Report for a consolidated entity, please provide the name of the company or the relevant information so that I can assist you further.
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Ann's risk preference is represented by the following expected utility formula: U(T, C₁; 1T, C₂) = π (C₁)ª + (1 − π) (C₂)ª. = = = Consider the following lotteries: L₁ (0.8, $100; 0.2, $0), L2 (0.6, $140; 0.4, $0), L3 (0.4, $200; 0.6, $0), and L3 = (0.5, $150; 0.5, $0). Suppose Ann strictly prefers L₁ over L₂ and she also strictly prefers L3 over L4. Find all possible a that are consistent with Ann's preferences.
The value of 'a' must be greater than zero in order to be consistent with Ann's preferences.
Ann's risk preference is represented by the following expected utility formula:
U(T, C₁; 1T, C₂) = π (C₁)ª + (1 − π) (C₂)ª
Consider the following lotteries: L₁ (0.8, $100; 0.2, $0), L2 (0.6, $140; 0.4, $0), L3 (0.4, $200; 0.6, $0), and L3 = (0.5, $150; 0.5, $0).
Suppose Ann strictly prefers L₁ over L₂ and she also strictly prefers L3 over L4.
We are to find all possible a that are consistent with Ann's preferences.
L₁ (0.8, $100; 0.2, $0) and L₂ (0.6, $140; 0.4, $0)U(T, C₁; 1T, C₂) = π (C₁)ª + (1 − π) (C₂)ª for L₁ and L₂π (C₁)ª + (1 − π) (C₂)ª > π'(C₁)ª + (1 − π') (C₂)ª
Therefore, Ann strictly prefers L₁ over L₂.U(T, C₁; 1T, C₂) = π (C₁)ª + (1 − π) (C₂)ª for L₃ and L₄π (C₁)ª + (1 − π) (C₂)ª > π'(C₁)ª + (1 − π') (C₂)ª
Therefore, Ann strictly prefers L3 over L4.
Considering L₁ and L₂:
U(T, C₁; 1T, C₂) = π (C₁)ª + (1 − π) (C₂)ª= 0.8(C₁)ª + 0.2(C₂)ª ….. (1)U(T, C₁; 1T, C₂) = π' (C₁)ª + (1 − π') (C₂)ª= 0.6(C₁)ª + 0.4(C₂)ª …. (2)
Since Ann strictly prefers L₁ over L₂, U(T, C₁; 1T, C₂) > U(T, C₁; 1T, C₂) = 0.6(C₁)ª + 0.4(C₂)ª
By substituting the given values, we get
0.8(C₁)ª + 0.2(C₂)ª > 0.6(C₁)ª + 0.4(C₂)ª0.2(C₁)ª > 0.2(C₂)ª(C₁/C₂)ª > 1
Taking log on both sides
ln (C₁/C₂)ª > 0
a ln (C₁/C₂) > 0
Now we consider L₃ and L₄:
U(T, C₁; 1T, C₂) = π (C₁)ª + (1 − π) (C₂)ª= 0.4(C₁)ª + 0.6(C₂)ª ….. (1)
U(T, C₁; 1T, C₂) = π' (C₁)ª + (1 − π') (C₂)ª= 0.5(C₁)ª + 0.5(C₂)ª …. (2)
Since Ann strictly prefers L3 over L4, U(T, C₁; 1T, C₂) > U(T, C₁; 1T, C₂) = 0.5(C₁)ª + 0.5(C₂)ª
By substituting the given values, we get
0.4(C₁)ª + 0.6(C₂)ª > 0.5(C₁)ª + 0.5(C₂)ª(0.1/0.5)(C₁)ª - (0.1/0.5)(C₂)ª > 0(C₁/C₂)ª > 1
We obtain: a ln (C₁/C₂) > 0 => a > 0
Therefore, the value of 'a' must be greater than zero in order to be consistent with Ann's preferences.
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