Tag: Economics

Question 1

‘Jenny Cochran, a graduate of The University of Tennessee with 4 years of experience as an equities analyst, was recently brought in as assistant to the chairman of the board of Computron Industries, a manufacturer of computer components.

During the previous year, Computron had doubled its plant capacity, opened new sales offices outside its home territory, and launched an expensive advertising campaign. Cochran was assigned to evaluate the impact of the changes. She began by gathering financial statements and other data. (Data Attached)

1. What effect did the expansion have on sales and net income? What effect did the expansion have on the asset side of the balance sheet? What do you conclude from the statement of cash flows?
2. What is Computron’s net operating profit after taxes (NOPAT)? What are operating current assets? What are operating current liabilities? How much net operating working capital and total net operating capital does Computron have?
3. What is Computron’s free cash flow (FCF)? What are Computron’s “net uses” of its FCF?
4. Calculate Computron’s return on invested capital (ROIC). Computron has a 10% cost of capital (WACC). What caused the decline in the ROIC? Was it due to operating profitability or capital utilization? Do you think Computron’s growth added value?
5. What is Computron’s EVA? The cost of capital was 10% in both years.
6. Assume that a corporation has $200,000 of taxable income from operations. What is the company’s federal tax liability?
7. Assume that you are in the 25% marginal tax bracket and that you have $50,000 to invest. You have narrowed your investment choices down to municipal bonds yielding 7% or equally risky corporate bonds with a yield of 10%. Which one should you choose and why? At what marginal tax rate would you be indifferent?

Question 2

James Madison was brought in as assistant to Computron’s chairman, who had the task of getting the company back into a sound financial position. Madison must prepare an analysis of where the company is now, what it must do to regain its financial health, and what actions to take. Your assignment is to help her answer the following questions, using the recent and projected financial information shown next. Provide clear explanations, not yes or no answers.

1. Why are ratios useful? What three groups use ratio analysis and for what reasons?
2. Calculate the profit margin, operating profit margin, basic earning power (BEP), return on assets (ROA), and return on equity (ROE). What can you say about these ratios?
3. Calculate the inventory turnover, days sales outstanding (DSO), fixed assets turnover, operating capital requirement, and total assets turnover. How does Computron’s utilization of assets stack up against other firms in its industry?
4. Calculate the current and quick ratios based on the projected balance sheet and income statement data. What can you say about the company’s liquidity position and its trend?
5. Calculate the debt ratio, liabilities-to-assets ratio, times-interest-earned, and EBITDA coverage ratios. How does Computron compare with the industry with respect to financial leverage? What can you conclude from these ratios?
6. Calculate the price/earnings ratio and market/book ratio. Do these ratios indicate that investors are expected to have a high or low opinion of the company?
7. Use the extended DuPont equation to provide a summary and overview of Computron’s projected financial condition. What are the firm’s major strengths and weaknesses?
8. What are some potential problems and limitations of financial ratio analysis?
9. What are some qualitative factors analysts should consider when evaluating a company’s likely future financial performance?

Submit your answers in a Word document.

I’m trying to study for my Economics course and I need some help to understand this question.

Using a supply and demand diagram, draw the market for housing. If buyers and

sellers expect future house prices to increase, holding all other factors unchanged, show

the effect on current equilibrium price and quantity. Please label all axes and curves, and

show any shifts in the demand and/or supply curves.

• The United States has a public pension system known as Social Security, which pays a monthly stipend to retirees. One big decision each retiree must make is when to begin taking payments. An individual can start taking payments as early as age 62 or as late as age 70. As you would expect, the monthly payments are larger for those who start later. The decision to start payments is irrevocable, and it locks in the monthly payment amount for the remainder of the individual’s life.
• “David” was born in 1960, and he can start receiving payments in January 1, 2022. Help David think through the decision of when to start his Social Security payments. To simplify things, assume that:

–Based on his past earnings, he can choose to receive monthly payments of (a) $2100 beginning in 2022, (b) $3000 beginning in 2027, or (c) $3750 beginning in 2030

–If he chooses to receive payments at age 62, assume that he has retired and has no other offsetting sources of income 

–David’s health and family history offer no suggestions that his life expectancy is greater or less than an average American male of his age

• Prepare a decision aide to help David think through this decision. The decision aide can be a PowerPoint slide, a one-page email message, a spreadsheet, or anything else you think will illustrate the key variables and how to structure the decision. Your deliverable should also include your recommendation (in addition to illustrating how to think about the decision). Federal Reserve Chairman Powell says interest rates will stay low for a long time, so don’t worry about discounting. Focus on the uncertainty.
• Further information on the Social Security program is available at www.ssa.gov (Links to an external site.).

Solow Model Excel Assignment

Goals of the Assignment

There are two main goals for this assignment. First, it is meant to help improve your

understanding of the mechanics of the Solow growth model that we covered in the first

half of the class and to make sure you don’t forget about it before the final. Second,

since many jobs for economics majors require at least a basic knowledge of Microsoft

Excel, it is also meant to give you some practice with some of Excel’s basic features. If

you do not have access to Excel, Google sheets will also work as a free alternative.

The Assignment

For this assignment, we will be simulating a Solow Growth Model in an Excel

spreadsheet. To do this, please try follow these steps.

1. Set up the parameters of the model: In a box on your excel sheet, set input the

following numbers as values for each parameter. We will use numbers on your

student ID to give each of you a unique setup (if any number is a 0, skip it and

move to the next number). We will assume a Cobb-Douglas production function

a) Set capital’s share of income where X is the first number on your

student ID

b) Set the saving rate where X is the second number of your student ID

c) Set the depreciation rate where X is the third number of your student

ID

d) Set the population growth rate where X is the fourth number of your

student ID

e) Set the technology growth rate where X is the fifth number of your

student ID. Calculate using your values for and .

2. Calculate steady state capital per effective worker, output per effective worker, and

consumption per effective worker by hand.

3. Set the initial level of technology and . Set equal to half its

steady state value that you calculated in 2. Put these three values in the first row of

three separate columns in your spreadsheet.

4. Using Excel formulas (i.e. not calculating by hand), calculate , , , , ,

, and putting each in the first row of their own column in your spreadsheet

(you should now have 11 columns filled in total). You should be able to calculate all

of these variables using , , , and parameters.

5. Using the growth rates you set in part 1, use an Excel formula to calculate and

for 100 periods (so you should have 100 rows filled in with these values)

6. Using the law of motion for capital per effective worker, calculate for 100 periods

7. Calculate values for the other 8 variables for 100 periods (carrying formulas down).

8. From the 100 values you have generated, create graphs of

a) Capital per effective worker (include a dashed line at the steady state level of

capital that you calculated in 2)

b) The natural log of capital per worker

c) The natural log of aggregate capital

d) The growth rate of capital per worker and aggregate capital (you can use the

difference in the logs as an approximation for the growth rate)

9. Copy the spreadsheet you have created into a new sheet. After period 100, change

the saving rate to the value that optimizes steady state consumption (if you are

already at this value, choose an arbitrary new value between 0 and 1). Using the

new saving rate, starting in period 100, calculate values for all of your variables for

100 more periods (so you will now have 200 total values for each variable). Create a

graph for the following variables (for these graphs, start from period 50, so you will

plot t=50 to t=200). For each graph, include a dashed line at both the original and

new steady state values (calculate these by hand)

a) Capital per effective worker

b) Output per effective worker

c) Consumption per effective worker

10. Copy the original spreadsheet again onto a third sheet. Now double . Using the

new growth rate, starting in period 100 calculate values for all of your variables

forward to period 200. Create graphs (again starting in period 50) for

a) Output per effective worker (include dashed lines at both the original and new

steady states))

b) The natural log of output per worker

c) The natural log of aggregate output

d) The growth rate of output per worker and aggregate output (again using the

difference in logs)

11. You should now have 13 graphs. Put these together into a single document (Word,

google docs, powerpoint slides, anything works as long as the final format can be a

pdf), including a brief description (a few sentences) explaining what is happening in

each of the three parts (i.e. a few sentences each for step 8, step 9, and step 10).

Requirements/Tips/Grading

1. Your graphs should include labeled axes and a title. If you have multiple lines on the

graph (for graphs where you plot a steady state), include a legend making it clear

what each line represents.

2. You must make at least some changes to the default Excel (or whatever program

you use) style (e.g. change the color, font, sizes of the lines, gridlines, etc.). This is

just to practice making Excel graphs. Don’t go overboard with the changes – make

sure everything still looks clean.

3. Make sure your final document with graphs and descriptions looks professional and

readable. If it is hard for the grader to figure out what you are trying to show you

won’t get as high a score

Find a timely article that deals with money, banking, and the inner-workings of monetary policy in an established newspaper or magazine that has been published in 2021. The following is a list of possible newspaper and magazine sources:

Newspapers:

• The Wall Street Journal
• The Financial Times
• The New York Times
• The Washington Post
• The Los Angeles Times

Magazines:

• Foreign Affairs
• The Economist
• Bloomberg Businessweek
• Dollars and Sense
• The Nation
• Foreign Policy
• The Atlantic

This is not an exhaustive list of possible sources. If you find an article in another newspaper or magazine please confirm with me that it is an acceptable source.

Directions:

Most articles in financial publications that deal with money, banking, and the inner-workings of monetary policy presuppose that the reader has a sophisticated understanding of the topic at hand. Your job is to essentially rewrite the article for a general audience that knows nothing about money, banking, and the inner-workings of monetary policy. Therefore, you need to touch on all of the key points outlined in the article and spend a significant amount of time explaining the underlying concepts and theories embedded in the article to an audience that knows nothing about the topic. You need to utilize the knowledge that you have gained from the money, banking, and monetary policy section of the course.

The writing assignment needs to be 3 pages long (excluding any graphics used) and it needs to be double spaced with size 12 font. The assignment will be graded based on the correct use of economic theory, proper use of grammar, insightfulness, and supporting evidence.

Sources need to be cited within the paper and in a works cited page. You don’t have to follow APA or MLA formats, but you need to make sure that you cite your sources. The paper needs to be uploaded as a Word document file into Canvas (Vericite).

Hi,

I need all the highlighted sections for Red Robin Gourmet Burger- RRGB to be completed (sections in yellow in the first 2 files). We end at the Optimal Capital Structure.

This includes the graphs and write-up for each section for data analysis for Red Robin starting with Corporate Government Analysis to Optimal Capital Structure. The former has already been completed and attached as a separate Excel file

The help manual details what is required in each of the sections. The professor would like us to use a 5-year timeframe for reporting purposes.

Your paper is a different kind of research paper. You will evaluate sources and use them for support, but to support your unique view and need of said sources that relate to said thesis. Your thesis may be along the lines of “Considering what I now know about econ basics, I will be able to make much more informed personal, professional, and political economic choices.” You’re not going to necessarily “further the field” of economics or add some great insights, but rather further 

inform YOUR life, understanding and needs.

You’re NOT going to write a book report, opinion piece, or editorial as regards some aspect(s) of economics, but rather you are using sources to support your thesis or that which is based on your needs.

You’re also not going to necessarily write an “argument” or “analytical” paper, but you can use argumentation to show how what you’re saying is going to work for you, and you can use analysis to better understand and demonstrate how what you’ve learned will potentially work for you in the future in your personal, public, and professional life.

But most of all, it’s a time to educate yourself so that you become an asset to society, not an easily manipulated and used element to be take advantage of by powerful politicians and corporate cronies. 

I need help exploring the various types of restructuring and the tax implications of each type 

• I need to better explain and describe the seven types of reorganization. Give an example of each type of reorganization.I
• I’m hoping to be able to Elaborate on the advantages and disadvantages of each type of reorganization.
• Having trouble understanding What are the requirements for a corporation to qualify as a tax-free reorganization?
• I’m tasked with figuring out Are there any strategies for compensation plans that could decrease taxation in each type of reorganization?
• I need help Explaining how a restructuring will be taxed by using an example and providing computations for the reorganization types that are affected by taxation.

I’m trying to learn for my Micro Economics class and I’m stuck. Can you help?

Draw a graph of perfectly competitive market and explain equilibrium of the firm by choosing output level at which

a. P=MC=MR and Firm is making zero economic profit

b. P=MC=MR and Firm is making a loss

c. Explain shut down rule with the help of graph