Questions from Managerial Economics

Q: Indicate whether each of the following would increase or decrease the

Indicate whether each of the following would increase or decrease the cost of capital that should be used by the firm in investment project evaluation. Explain. a. Interest rates rise because the Fed...

Q: New York City licenses taxicabs in two classes: (1)

New York City licenses taxicabs in two classes: (1) for operation by companies with fleets and (2) for operation by independent driver-owners having only one cab. Strict limits are imposed on the numb...

Q: Suppose the Pacific Princess luxury cruise line is contemplating leasing an additional

Suppose the Pacific Princess luxury cruise line is contemplating leasing an additional cruise ship to expand service from the Hawaiian Islands to Long Beach or San Diego. A financial analysis by staff...

Q: Louisiana Drilling and Exploration, Inc. (LD&E

Louisiana Drilling and Exploration, Inc. (LD&E) has the funds necessary to complete one of two risky oil and gas drilling projects. The first, Permian Basin 1, involves the recovery of a well tha...

Q: Toby Amberville’s Manhattan Café, Inc., is considering investment in two

Toby Amberville’s Manhattan Café, Inc., is considering investment in two alternative capital budgeting projects. Project A is an investment of $75,000 to replace working but obsolete refrigeration equ...

Q: Cunningham’s Drug Store, a medium-size drugstore located in Milwaukee

Cunningham’s Drug Store, a medium-size drugstore located in Milwaukee, Wisconsin, is owned and operated by Richard Cunningham. Cunningham’s sells pharmaceuticals, cosmetics, toiletries, magazines, and...

Q: Dunder-Mifflin, Inc., is analyzing the potential profitability of

Dunder-Mifflin, Inc., is analyzing the potential profitability of three printing jobs put up for bid by the State Department of Revenue:
Assume that (1) the company’s marginal city-plus-state-plus-f...

Q: Determine whether each of the following statements is true or false.

Determine whether each of the following statements is true or false. Explain why. a. A vertical relation is a business connection between companies at the same point along the production-distribution...

Q: Several companies have learned that a well-funded and comprehensive employee

Several companies have learned that a well-funded and comprehensive employee benefits package constitutes an important part of the compensation plan needed to attract and retain key personnel. An empl...

Q: During the amazing bull market of the 1990s, an investment strategy

During the amazing bull market of the 1990s, an investment strategy of simply mimicking the Standard & Poor’s 500 Index became popular. The S&P 500 is a value-weighted market index of 500 common stock...