Question & Answer

Given the following equation for a firm’s average cost (AC, i.e. the cost per unit of output (Q):                      AC = 60 – 16Q + 2Q²                (a)  At what output is AC at a minimum?                (b)  Use the second derivative test to prove that this is a minimum not a maximum.

Explain the impact of a decline in interest rates on: a. An investor’s required rate of return, b. The present value of existing bonds, c. The prices of existing bonds. (LO1).

What are the common forms of the reinforcing phase in composite materials?

(Threshold Concept 5) 1. Give two other examples of perverse incentives. How could the incentives be improved? (Threshold Concept 5) 2. Suppose that the kitchen is very untidy – what are the incentives for you to address this? What incentives could you use to get someone else to do it for you? (Threshold Concept 5) 3. Many students undertake voluntary work while at university. What do you think the incentives are for this? Identify any perverse incentives associated with volunteering and how they could be addressed.

If we would all like more money, why does the government not print a lot more? Could it not thereby solve the problem of scarcity ‘at a stroke’?

1.              : Let Owens know that you care about what he’s going through, but insist that he take a short paid leave and get counseling to deal with his emotional difficulties and evaluate the seriousness of his problems with alcohol. If the alcohol abuse continues, require him to attend a treatment program or find another job.

Distinguish between perfect and imperfect security markets. Explain why the existence of imperfect markets creates a need for financial intermediaries. (LO3)

Roley Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. On July 1, Roley purchased $60,000 of inventory, terms 2/10, n/30, FOB shipping point. Roley paid freight costs of $1,200. On July 3, Roley returned damaged goods and received credit of $6,000. On July 10, Roley paid for the goods. Prepare all necessary journal entries for Roley.

Scatter plots, cost function using regression, two potential cost drivers Suppose we need to predict the cost of maintenance for Brush Valley High School for the upcoming school year. From the school district records we gather weekly data about costs and volumes for two potential cost drivers: labour hours used in the maintenance department and number of enrolled students.   Required (a)          Identify and explain two potential cost drivers for total maintenance cost, in addition to number of students and maintenance hours worked. (b)          Create a scatter plot, first for maintenance cost against hours worked and then maintenance cost against students. (c)           Would you eliminate either cost driver based on the plots? Explain. (d)          Perform regression analysis using each cost driver. Use your judgement to determine the most appropriate cost driver and write out the cost function for maintenance cost. (e)           Can we know for certain that the cost driver chosen in part (d) is the best cost driver? Why?

What is meant by the term structural adhesive?

The nylons are members of which polymer group?

Give some other examples of decisions where people often change their mind with the passage of time once the costs or benefits become immediate.

Describe the primary activities in the value chain for your college or university. In your opinion, which primary activities create the most value?

List three factors that managers might consider in deciding whether to expend resources to reduce spoilage.

A 42.0-mm-thick plate made of low carbon steel is to be reduced to 34.0 mm in one pass in a rolling operation. As the thickness is reduced, the plate widens by 4%. The yield strength of the steel plate is 174 MPa and the tensile strength is 290 MPa. The entrance speed of the plate is 15.0 m/min. The roll radius is 325 mm and the rotational speed is 49.0 rev/min. Determine (a) the minimum required coefficient of friction that would make this rolling operation possible, (b) exit velocity of the plate, and (c) forward slip.

1.       : If you wanted to add a group of food scientists to a large organization such as PepsiCo, would you centralize the scientists in a central pool at headquarters or decentralize them to separate divisions? Discuss your reasons.

Identify the factors affecting the premium paid on a call option. Describe how each factor affects the size of the premium. (LO2)

Make a list of those who are most likely to gain and those who are most likely to lose from inflation.

From Table 29.1, C = 0.92 x 10-4 in3/A-min, cathode efficiency E = 15%. Plated volume V = EC∫Idt = EC∫(12 + 0.2t)dt = EC(12t + 0.1t2) over the range 0 to 20 min. V = 0.15(0.92 x 10-4)(12 x 20 + 0.1(20)2) = 0.00386 in3

Consider the argument that whether an industry is in the public sector or private sector has far less bearing on its performance than the degree of competition it faces.

If the government borrows but does not spend the proceeds, what effect will this have on the money supply if it borrows from (a) the banking sector; (b) the non-bank private sector?

Explain basis risk as it relates to a currency swap. (LO8)

Expenses, losses, and distributions to owners are all decreases in net assets. What are the distinctions among them?

1.              : What does this case illustrate about the risks of starting a business with a partner? How might those risks be minimized? Explain.

Differentiate between “loss carryback” and “loss carryforward.” Which can be accounted for with the greater certainty when it arises? Why?