Economists believe that government spending should rise temporarily so the drop in private spending can repair itself. The government is taking an opposite approach to the advice of economists by issuing immediate spending cuts. This fiscal policy is inappropriate for the current economic situation. With large spending cuts, the government could push the economy back into another unwanted recession. With political campaigns for the United States Presidency heating up, Americans should not be
FY96 sales projections of $5.5 show that if the percentage of sales were to remain constant in the balance sheet, they would need an additional $357K of funding (cash) to keep up with bill payment. In addition to the $357K in additional funding Clarkson would be required to roll in their current line of credit of $399K bringing the required amount to $756K. In short, if no changes are made to the management of short term assets Clarkson will be absorbing his funds into new assets at a faster rate than he can earn funds through profit margin by having high levels of inventory and an inefficient receivables turnover. It is clear that Clarkson Lumber will need an infusion of cash to sustain the current growth rate. As a banker I would not approve Clarkson lumber request without conditions.
Costs would include reengineering research and development, plus higher component costs since more advanced parts would be needed for more torque. The manufacturing cost would now be $790 for the hot version and $867 for the larger frame same temperature version. These redesigns add to manufacturing costs and would be dilutive to the current margins and earnings. Margins would decline from $536 per motor to $410 or $333 with the respective redesign options. 2.
It requires employers to provide their workers with insurance or they will face a payroll tax of 8%. According to the republicans, this is a disguised tax on employment that would increase the costs of hiring a worker. Hence employers will seek ways to off-set the added costs by raising the prices, lowering wages, reducing other benefits such as pensions, shifting workers from full-time to part-time etc. (Tanner, Michael 2009). President Obama’s administration does not deny that this is a new tax, but the opposition implies that if it is a tax than it’s definitely bad.
Since the UK is a net importer of oil, higher oil prices would damage economic growth more than it benefitted it, as we’d have to pay more as a country in order to acquire the oil that we needed. Oil being a large part of consumer consumption would also contribute to economic slowdown: the higher prices of petrol and other oil-related products would mean that overall consumption decreases as consumers are forced to pay a higher price on certain goods and services. Higher oil prices would also lead to decreased consumer confidence as consumers may not feel comfortable with having to pay so much for petrol or other oil-based products, and therefore would also result in a decrease in overall consumer spending. This would also have negative implications on businesses as well: a decrease in consumer spending would subsequently lead to a decrease in the revenues businesses are able to make due to decreases in consumer spending. A rise in oil prices would also directly affect business performance as oil is a cost of production to firms, especially to those which produce oil related products, hence reducing profits and limiting the amount of money that firms can reinvest.
d. If a firm is more profitable than most other firms, we would normally expect to see its book value per share exceed its stock price, especially after several years of high inflation. e. The more depreciation a firm has in a given year, the higher its EPS, other things held constant. 2. Which of the following statements is CORRECT? a.
A current account deficit means the country imports a greater value of goods and services than it exports. To reduce a current account deficit we need to either increase the value of exports and or reduce imports. Supply side policies aim to increase the productivity of the economy. If the manufacturing sector becomes more productive, the relative cost of British goods will fall and therefore they will become more competitive. This will help increase exports and reduce the current account deficit.
Economic losses from disasters have grown exponentially, nearly tripling between1980-89 and 1990-99. This is far greater rate than the growth in the number of disasters. Insured losses have increased less dramatically than total economic losses. It is far too simple to say that developing countries suffer the greatest number of deaths and developed countries the greatest economic impact of disasters. The economic losses appear greater in richer countries because of the value of their economies and the cost of making good the damage.
Companies will know where they can maximize these profits. Also consumers spending can be predicted off what provides the greatest utility or satisfaction. Because of the laws of supply and demand, it is better understood when to produce or offer goods and services and when it is better to produce