Problem Set 3

Macy’s Inc. ratio was .02 and JC Penny Co. Inc. was .00. To improve this ratio, both companies need to improve on their net income. If JC Penny doesn’t continue to improve its net income, then this ratio will begin to lean negative, signaling the company is losing money for every dollar is sales and may not be good investment. Macy’s Inc. still has room before it hits .00, however, if their net income continues to fall, they soon too may have the same profit margin ratio as JC Penny Co. Inc. Shutting down unsatisfactory stores – as each company is doing – may help improve this ratio as well. With less funding going to these stores, such as salary’s, rent, and wasted inventory, they will be able to improve their net income value.

Problem Set 2 is to be completed by 11:59 p.m. (ET) on Monday of Module/Week 4.

A) The private savings would not change, in the long-run, because since consumers tend to be consumption-smoothers, there would be a natural switch from the consumption of foreign goods to the consumption of domestic goods. However, in the short-run, there would be a decrease in savings because the demand for domestic goods would increase thus increasing domestic prices and since consumers are consumption-smoothers, they would dip into private savings, decreasing national private savings. The Domestic Investment would increase because there’s an incentive to invest in domestic assets because of the inevitable increase in production of domestic goods (increase in exports). The gov’t budget

Cost of goods sold in store 3 was 58.5% of sales in 2011 and in 2012 it dropped to 50.3%. This is odd because sales and inventory had increased from 2011 to 2012. When sales increase costs of goods should rise respectively. If a business is becoming more profitable the inventory generally doesn’t increase considerably. This increase in inventory could be due to obsolescence. All of these factors don’t add up to an increase in sales.

positive economic profits. negative economic profits but will try to remain open. negative economic profits and will shut down. zero economic profits.

Let's consider a bagel shop called Uhlman's Everything Bagel. Despite the eye-catching name Uhlman's have, they have limited supply of everything bagels but an intensive supply of pumpernickel bagels. The bagel shop is in the heart of upper east Manhattan which has a large demand for everything bagels. Over the last few years, the owner has noticed a huge decline in his sales due to his

You are a manager of a department store, and, although business has been good lately, your chief accountant informs you that the store is losing money.

The decrease in inflation also benefits the retailing industry these years. The inflation rate descended dramatically since 2012. The price level will goes down due to the fall in inflation. Therefore, the cost of goods sales can be lower. Besides, the analysis of other possible factors including interest rate and exchange rate that affect retail industry can be seen in the appendices.Personally, the relative stable demand in apparel retail makes the general retail market pretty competitive, because it may attract a mass of investor to enter the market. However, the Next stands out from the competition in the United Kingdom. The revenue of the Next plc and M&S plc, both experienced a stable growth. Although the M&S had larger sales revenue, its profit before taxation is lower than Next plc since 2012.From the shareholders perspective, the Next plc performed well last 5 years, the earnings per share and dividend per share both enjoyed a continuous increase. Both of them had about 15% increase. Its share price rose by over 250%. The M&S plc’s share price, the Next plc’s biggest competitor, also ascended by 26 %. However, its earnings per share grew a little after the drop in 2011.The dividend per share kept the same for years, and rose by 5% The following ratio analysis also suggests that the Next plc perform more efficient management than M&S plc. From 2013 to 2014, the increasing

Suppose QT = 150 (8 – PT) and QL = 180 (5 – PL) and MC=1.2 for each market. Calculate the optimal PT and PL.

The Big-Box and department store retailer segment is declining. IVA is expected to decline at an annual rate of 4.6% in the 10 years until 2020. The recession took a great impact on the industry, which resulted in many companies failing to have adapted accordingly to the post-recessionary environment. The post –recessionary environment, includes consumers having the capability to easily compare prices and access online retailers. A number of big-box retailers and departments stores are also declining as Target and Wal-Mart makes moves into supercenter and warehouse industry , and out of the traditional big-box store model . The brick and mortar stores also incur higher operational costs than e-commerce stars because they have to include costs for their employees and retail space. As a result, cost savings of many online companies are undercutting department store prices.

When the fixed cost equals to $1,000,000 their average total cost is of $27. The ATC is greater by $2 dollars when compared to their output price of $25. When the fixed cost equals to $3,000,000 their TR equals to $5,000,000. The TC is of $4,400,000. When all these values are compared, one can see that the company is losing money by staying open, be it $1mil or $3 mil.

This year, PX = $2, I = $4, PY = $2.50, PM = $1, and A = $2. (a) Calculate the sales of CFC cornflakes this year. (b) Calculate the elasticity of sales with respect to each variable in the demand function. (c) Estimate the level of sales next year if CFC

Random samples of five were selected from each of three populations. The sum of squares

First, apply the formula to calculate the elasticity as price decreases from $70 to $60.

Price Elasticity is – 1.19. That is a 1% increase in price of the product will make quantity demanded to drop by 1.19%. Thus, the demand for this product is somewhat elastic. Consequently, increase in income may drive consumers away.