Tuesday, 26 February 2019
Incomplete
Froes explains that the virtuoso Lesson of Business is that, Wealth is give rised when assets move from lower to higher(prenominal)-valued occasions. (p. 12) Froes goes on to spend nearly of the chapter talking about how taxation destroys wealth and that g overning subsidies (and all political relation outlay is a subsist) also destroys wealth. Apply Frosts one lesson of business to a detail government tax-and- spend decision that you support or else use the one lesson of business to explain why you atomic number 18 an anarchist.AY) If you be non an anarchist, then explain how the government creates wealth by axing-and-spending to produce around program somewhere that you support. Why do you think that the tax dollars are worth less to taxpayers than the value of the government program you selected? This cant be a zero-sum game that happens to benefit you personally. The One Lesson of Business is about wealth creation. For archetype, I cant simply defend Medicare becaus e I like that it pays for my m new(prenominal)s health care. That doesnt explain whether Medicare creates wealth.I would need to con unswerving whether Medicares union benefits to society are greater than its constitute to society. If government doesnt create value somewhere, then we would be demote off without it and we should be anarchists. AY) If you are an anarchist, then explain why all taxation and government spending (subsidies) should be eliminated. In particular, you should take on the biggest spending programs of government defense, healthcare (mostly Medicare), pensions (mostly Social Security), and education.These programs account for over 2/3 of total government spending (including state and local government), so if you are an anarchist, you should focus on where most of the money goes. . Froes says that businesses that are less administrative officialic and much free- commercialize provide be more successful. For precedent, on page 16, Froes says that, Organiza tions impose taxes, subsidies, and price controls at bottom their companies that lead to un kaleable decisions. Pick one of the following questions and indicate whether you hold chosen to address X or Y X) How do corporations and otherwise brass instruments tax the individuals, divisions, and/pr departments within the organization? Give a specific example. Do not use any government mandated taxes as your example. Would the organization be better off if it completely avoided the kind of taxation in your example? Y) How do organizations impose price controls? Give an example where a bureaucrat (manager) imposes a price control (a pre-determined, fixed price) upon the people in the organization.Explain whether it is better to eliminate this particular price control. 7. Suppose you have capital that is shortly worth $1,000 and your equal of capital (WAC) is 10%/year. How much operating profit per year would you need to earn to be generating economic value by staying in business acc ording to EVA? 8. Think of a pacific example outside of the textbook where someone in an organization (team, school, business, government, etc. ) do a bad decision and use Frosts rational actor epitome to diagnose the problem. A) What is the problem (very briefly)? B) What caused the bad decision?C) How could you fix the problem? Could anyone limiting the organizational structure, information, incentives, (or culture)? How well would your proposed change solve the problem? 9. You traveled to Memphis over the weekend but need to return to work in capital of Ohio early Monday morning. On Sunday afternoon, your flight is postponed until Monday night due to hurricane Eke. Since this is a pleasure trip, you bought a non-refundable book for $250. You can still dismay a ticket on a Greyhound bus for $90 and still get home by 6AMA. Under what circumstances should you buy the Greyhound ticket and ride the dog overnight? 0. You are the production manager for Widgets, Inc. new production is 1,000 widgets and all have been ordered by your regular customers. The sound rings and a new customer wants to buy 1 more widget and offers you $1,000 if you increase production to 1,001 widgets. Should you accept this offer? Remember that it is oft harder to make decisions if you Just try o estimate the cost than if you word form out the total profit. You do not need to know what the other customers paid. Below are your average total cost which is the total cost divided by the quantity of widgets.Quantity Average Total Cost trus iirthy Production 1 ,oho $200 Make One More? 1,001 $201 A) What is the borderline revenue of failing one more? B) What is the total cost soon (selling one C0 units) C) What would the total cost be if you sell 1001 units? D) What is the marginal cost of producing the 1st widget? E) What do you tell the new customer? 11. A) Your firm received an REP (request for proposal) on a wire harness from GM hat testament require an investment with fixed cos t of $1 one thousand thousand and a constant marginal cost per unit of $1 with expected sales of 1 million units.What is the break-even price per unit that you go out need to quote in order to avoid losing money? B) GM agrees to the price you quoted, and then hands you with a POP (purchase order) for 0. 5 million units, what do you say? Why? 12. You have fixed costs of $100/year, and you can produce and sell 100 units per year but you sell a commodity, so you are at the mercy of the going trade price and you cannot raise your price above whatever price the market is currently at. Your marginal cost is $5. If the market price declines, what is your break-even price on a lower floor which you will shut down?Note that there are two different answers for two different executable scenarios. Give both possible answers for full credit. Dont worry about the opportunity cost of capital (WAC). affect that that is included within the fixed cost figure. 13. Suppose there are two technologi es for producing pizzas in Macaque. The solar oven requires $100 in fixed costs, but $9 in marginal costs versus the electric oven which requires $50 in fixed costs but $10 in marginal costs due to the high cost f electricity.What quantity of production will make you indifferent between the two different technologies? This is useful because in making capital expenditure decisions there is often this tradeoff and purpose the break-even quantity helps strategies about which investment will be most profitable. The base is that for small quantities one technology will have higher total costs and for large quantities the other technology will have higher total costs. Your Job is to see what quantity makes you indifferent between the two technologies because they have the same total cost.
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