The Lubricant is an expensive oil newsletter to which many oil giants subscribe, including Ken Brown (see Problem 3-17 for details). In the last issue, the letter described how the demand for oil products would be extremely high. Apparently, the American consumer will continue to use oil products even if the price of these products doubles. Indeed, one of the articles in the Lubricant states that the chance of a favorable market for oil products was 70%, while the chance of an unfavorable market was only 30%. Ken would like to use these probabilities in determining the best decision. (a) What decision model should be used? (b) What is the optimal decision? (c) Ken believes that the $300,000 figure for the Sub 100 with a favorable market is too high. How much lower would this figure have to be for Ken to change his decision made in part (b)?
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- Suppose menu messageQ&A notifications account_circle Business FinanceQ&A LibraryYou have just been employed as the New chief executive officer of a medium sized company that is listed on the Ghana stock exchange. At the maiden board meeting,the chairman advised you and your management team to avoid what he termed as "Agency Problem" Explain the term "agency proAm blem " and identify (4) way by which shareholders can deal with it. You have just been employed as the New chief executive officer of a medium sized company that is listed on the Ghana stock exchange. At the maiden board meeting,the chairman advised you and your management team to avoid what he termed as "Agency Problem" Explain the term "agency proAm blem " and identify (4) way by which shareholders can deal with it.…For each statement please choose true or false 4) The coordinator makes the edition of the newspaper (Gazette) based on macroeconomic indicators generated automatically by the simulator. 5) The Gazette presents supplier prices, interest rates, and articles that should be read before companies make decisions. 6) The Financial Report and the Market Report are equal for all simulated companies, while the Operational Report is specific to each company. 7) The impact of applied advertising occurs in 1 period.Stocks with high market betas have higher expected returns than stocks with low market betas. This evidence is inconsistent withI. The weak form efficient market hypothesisII. The semi-strong form efficient market hypothesisIII. The strong form efficient market hypothesis a) I, II, and III b) I and II c) I d) None of I, II, and III
- 13 In addition to the legislation and guidelines that may apply, the investment policythat is decided upon by the investment manager (for a client) should include allthe following elements EXCEPT rate of return expectations (including timeframe) and expected volatility specific goals about continuing education an investment review process the asset classes for investment a policy review process1) Choose the best answer The post-earnings drift is inconsistent withI The weak form efficient market hypothesisII The semi-strong form efficient market hypothesisIII The strong form efficient market hypothesis a) I, II, and III b) I and II c) None of I, II, and III d) IPlease answer A-C with the most true answer. A. Which of the following is most closely associated with return on assets? a. The cost of equity b. The proportion of debt and equity in the company’s capital structure c. The prime lending rate d. The average operating assets of the company B. Which of the following is most closely associated with expenses? a. Product (value propositions) design(s) b. Average operating assets c. Proportion of debt and equity in the company’s capital structure d. Equity risk premium C. Which of the following is most closely associated with the cost of debt? a. Non-operating expenses b. Risks specific to the company c. The long-term bond yield d. Prime lending rate
- Company X produces a product, GlueX3, that Company X sales for $5. An opportunity presents itself to reallocate its manufacturing facility and related resources to produce Epoxy10. It believes it can sell Epoxy10 for $8. Explain how this switch creates “value”. Be sure to include for whom.Jenny’s Stores is a retail chain with 150 outlets throughout North and South America. Faced with falling profit margins, the company is contemplating launching its own private brand that would reduce costs, improve margins, and allow it to pass on some of these benefits to its consumers. *** Question | Which of the following, if true, would most strengthen the argument for launching private brands? A) Most customers visiting Jenny’s Stores are loyal to existing national brands. B) The economy has started to improve, and consumer spending is increasing. C) Customers at Jenny’s Store are likely to become more price-conscious over the next few years. D) The company enjoys good relations with the suppliers and manufacturers of the brands that it sells in its stores. E) The stores enjoy high visibility and attract foot traffic well.#17FAVORABLE UNFAVORABLEMARKET MARKETEQUIPMENT ( $) ($)Sub 100 300,000 –200,000Oiler J 250,000 –100,000Texan 75,000 –18,000For example, if Ken purchases a Sub 100 and ifthere is a favorable market, he will realize a profitof $300,000. On the other hand, if the market is unfavorable, Ken will suffer a loss of $200,000. ButKen has always been a very optimistic decisionmaker.(a) What type of decision is Ken facing?(b) What decision criterion should he use?(c) What alternative is best? #18Although Ken Brown (discussed in Problem 3-17) is the principal owner of Brown Oil, his brother Bob iscredited with making the company a financial success. Bob is vice president of finance. Bob attributeshis success to his pessimistic attitude about business and the oil industry. Given the information fromProblem 3-17, it is likely that Bob will arrive at a different decision. What decision criterion should Bobuse, and what alternative…
- ***paste results onto Excel and upload it. 1. The information provided below relates to sales in a dine-in restaurant in Salisbury Maryland: Months Sales (in $1000) Mar-19 46.5 Apr-19 49.6 May-19 49.8 Jun-19 61.9 Jul-19 65.5 Aug-19 64 Sep-19 70.3 Oct-19 59.8 Nov-19 60 Dec-19 70.8 Jan-20 51.9 Feb-20 59.6 Due to Coronavirus outbreak, Restaurants were ordered to shut down during March and April of 2020. The restaurant manager is trying to determine the amount of sales lost while it was shut down during March and April because of the outbreak. a. Use exponential smoothing, with α =.2, to develop a forecast for March and April. (Hint: Use the forecast for March 2020 as the actual sales in March 2020 in developing the forecast for April 2020.) b. Comment on the use of exponential smoothing for forecasts more than one period into the future. c. Use trend projection to forecast sales for March and April 2020. d. The restaurant had purchased as insurance…Queenstar Company manufactures smartphones and tablets. Its main customers are retailers who then sell to the general public. The company’s manufacturing is spread across five sits and goods are stored in its nine warehouses located across the country. You are an audit supervisor of Akof & Co and in preparation for the forthcoming audit for the year ending 30 June 20X7, you are reviewing the following notes your audit manager has provided you with in relation to the company’s internal controls. Queenstar Company has a small internal audit (IA) department. During the year, the IA started a programme of physically verifying the company’s assets and comparing the results to the non-current assets register, as this type of reconciliation had not occurred for some time. To date only 15% of assets have had their existence confirmed as IA has experienced significant staff shortages and several members of the current IA team are new to Queenstar Company. During the year, Queenstar Company…2) We can segment business markets with some of the same variables we use in consumer markets, such as geography, benefits sought, and usage rate, but business marketers also use other variables. Which of the following best describes a scenario in which Meredith Corporation uses another variable in its segment business market? a Meredith Corporation creates different versions for different regions, modifying the copy to better serve the specific target market. b Meredith identifies the economic status of a market region and raises its product's price so that profits will increase. Meredith Corporation feels that if the consumer has the equity to pay a higher price and wants the product, he will pay more. c Meredith identifies with one segment market and sells only to that market. d Meredith Corporation creates multiple names for the same product, based on local psychographics. e Meredith creates unique associations to low cost and convenience in an overlooked niche market.