A government decision to privatize a sector of the economy formerly operated by the government is an example of _____ policy.


Answer 1


Structural policy


This is an example of what is known as structural policy.

There are times where the problem of an economy get to be more and also last longer than inadequate demand. This problem can be caused by government policies or sometimes private practices that cause an impediment on the efficient production of goods and Also services. In other to fix a problem such as this, changes have to be made to the economy. Such changes is what is regarded as structural policy.

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How does Amazon illustrate the sources of service sector growth?

What aspects do financial institutions like the Bank of Rhode Island assess before granting funding to businesses



Financial institutions assess the probability of the business paying the loan back, and to do so, they evaluate the financial position of the business, mainly using financial ratios to do so.

For example, to analyze liquidity, the use liquidity rations like the current ratio, the acid test, and the cash ratio.

The also analyze the firm from a revenue standpoint, meaning that the financial institution tries to determine how profitable the company is, and how its profitability will evolve in the term of the loan. To do so, they use asset turnover ratios, economic value added ratios, net income, and even the weighted average cost of capital.

Your parents are giving you $205 a month for 4 years while you are in college. At an interest rate of .48 percent per month, what are these payments worth to you when you first start college





In this question we use the present value formula i.e shown in the attachment below:

Data provided in the question

Future value = $0

Rate of interest = 0.48%

NPER = 4 years × 12 months = 48 months

PMT = $205

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after solving this, the answer would be $8,770.00

Harwinton, Inc. anticipates sales of 56,000 units, 54,000 units, 57,000 units and 56,000 units in July, August, September and October, respectively. Company policy is to maintain an ending finished-goods inventory equal to 50% of the following month's sales. On the basis of this information, how many units would the company plan to produce in September?



The correct answer is 56,500 units.


According to the scenario, the computation of the given data are as follows:

Sales for September = 57,000 units

As Beginning and ending inventory should be 50% of following month sales

So, Beginning inventory = 57,000 × 50% = 28,500

And Ending inventory = 56,000 × 50% = 28,000

So, we can calculate the units to be produce in September by using following formula:

Units produce in September = Sales for September +  Ending inventory - Beginning inventory

By putting the value, we get

= 57,000 + 28,000 - 28,500

= 56,500 units

9.5 Capital Healthplans Inc. is evaluating two different methods for providing home health services to its members. Both methods involve contracting out for services, and the health outcomes and revenues are not affected by the method chosen. Therefore, the net cash flows for the decision are all outflows. Here are the projected flows:Year Method A Method B0 (300,000) (120,000)1 (66,000) (96,000)2 (66,000) (96,000)3 (66,000) (96,000)4 (66,000) (96,000)5 (66,000) (96,000)a. What is each alternative’s IRR? b. If the opportunity cost of capital for both methods is 9 percent, which method should be chosen? Why?



present worth A: 513,821.51

present worth B:   431,013.1

We should choose option B as the present worth is lower.

the IRR cannot be calculated when all teh cashflow are negative as it the rate which makes the present value equal to zero. that means it will discount either the negative or postive subsequent cashflow to match an initial of the opposite sign.


For the intenal rate of return we must look for which rate makes the cost equal to zero.

For the opportunity cost, we solve for the present value of eahc discounted at the given rate of 9%

Method A

(Maturity)/((1 + rate)^(time) ) = PV  

discount rate 0.09

# Cashflow Discounted

0 300000         300000

1   66000           60550.46

2   66000           55550.88

3   66000           50964.11

4   66000           46756.06

NPV           513821.51

Method B

# Cashflow Discounted

0 120000 120000

1 96000 88073.39

2 96000 80801.28

3 96000 74129.61

4 96000 68008.82

NPV 431013.1

Suppose the farm equipment manufacturer from the previous question was able to charge $30,000 per tractor, and produces and sells 2,000 tractors per year at that price. As a reminder, the company originally spent $3 million in research and development costs. The company now spends $20 million at the beginning of each year to rent a factory, and $10,000 per tractor in materials and wages. If another manufacturer enters the market in the middle of a year and engages the company in a price war, what is the lowest price the company would be willing to charge for each tractor?


Given Information:

Rent = $20,000,000

Materials and Wages = $10,000/tractor

Number of tractors = 2,000

Amount spent on R&D = $3 million

Required Information:

Lowest price to sell atractor= ?


Lowest price to sell atractor= at least $20,000

Calculations & Explanation:

The company needs to sell at least at a price that all of its manufacturing cost can be recovered without the profit margin.

This happens at a break-even point where total revenue equals the total manufacturing cost.

Total manufacturing cost = Total revenue

The revenue is number of tractors multiplied by some price x

Total revenue = 2,000*x

Total manufacturing cost = fixed cost + Variable cost

Total manufacturing cost = 20,000,000 + 2,000(10,000)

Total manufacturing cost = 20,000,000 + 20,000,000

Total manufacturing cost = 40,000,000


Total manufacturing cost = Total revenue

40,000,000 = 2,000*x

x = 40,000,000/2,000

x = $20,000

Therefore, the lowest price to sell each tractor should be atleast $20,000

Note: The R&D cost is not usually included in such scenarios because R&D cost is sunk and should not be added in these calculations.

Chang Corp. has $375,000 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $550,000, and its net income was $25,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 15%. What profit margin would the firm need in order to achieve the 15% ROE, holding everything else constant? Do not round your intermediate calculations.





Data provided in the question:

Assets of Chang corp. = $375,000

Sales = $550,000

Net income = $25,000

Net Income required at 15% ROE = 15% × $375,000

= $56,250


The profit margin = \frac{\textup{Net income}}{\textup{Total sales}}*100\%


The profit margin = \frac{\textup{56,250}}{\textup{550,000}}*100\%


The profit margin = 10.22%


Profit Margin = 10.227%



Total Assets = $375,000(Common equity)

Sales = $550,000

Net Income = $25,000

Return on equity = 15% = 15/100 = 0.15

Profit margin = ?

Computation of profit margin:

Profit margin = (Common Equity × Return on equity) / Sales

Profit Margin = ($375,000 x 0.15) / $550,000

Profit Margin = ($56,250) / $550,000

= 0.102272

Profit Margin = 10.227% (approx)