1. What factors should the management consider in evaluating the proposed advertising program and technology upgrades? Ameritrade’s management has to first consider the required investment expenses and the expected increase in future cash flows from the proposed advertising and technology upgrades. For calculating the future cash flows, the company should also take in to account fluctuation in market demand and its effect on the project viability. The next major item will be to calculate the cost of capital and compare that to their expected IRR, which should be larger than the cost of capital.
The definition shows that in a nation which has a trade surplus, there is more demand for the exports of a country than there is demand for foreign products and services. Therefore, there is a higher employment rate within the country and the standard of living is increased. Positive balance of trade plays an important role in the economic growth of any country. Not only the level of employment, but the trade surplus can also affect the price level and inflation rate in the nation. As the demand for a country’s goods and services increase, producers increase their output to meet the increased demand.
Explain how fiscal policy might be used to bring about supply-side improvements to an economy.  K2 K2 K2 K2 Fiscal policy is the manipulation of public spending, taxation and borrowing to achieve the government’s macroeconomic objectives. For example an increase in government expenditure or a reduction in income tax should increase aggregate demand and real output. Fiscal policy is also used to improve the supply-side performance of the economy by affecting incentives to work and incentives to invest. Such policies aim to increase the capacity of the economy to produce more goods and services by increasing the quantity or quality of the factors of production.
Our money supply affects the country’s economy, interest rates, and borrowing. Erratic increase or decrease in prices of commodities of other items, if continued unabated for a substantial period, can be a source of imbalance in the economy. Why it is important to increase economic growth? It is important to increase economic growth to keep the economy moving forward to prevent job losses, and business closures, which in return you will have, a low money supply. My rationale for the Reserve Requirements would be by lowering the reserve requirements, and the banks will be able to have more money to loan, and then increasing the money supply.
With modern facilities it is possible to extend the theoretically given efficient frontier of a supply chain (Chopra/Meindl, 2007, pp. 44-45) and to achieve additional “supply chain surplus”, which at the end is supporting strongly the company’s financial performance. 2. Inventory During 2006 Rolls-Royce raised its inventory with the clear intention to increase the responsiveness of its supply chain (growth in output; stock for aftermarket support; stocks of rare raw materials). A higher inventory always means to have some financial capital bounded.
Therefore, this means that the average Bahraini disposable income will significantly increase, hence, they will increase spending on goods and services. An increase in salaries is therefore a direct signal interpreted by businesses to consider in planning their business offerings. A salary increase might also affect the banking sector, as savings may increase, resulting in extra liquidity with the banks, which is then channeled back through consumer loans or financing facilities for the business sector. Indirect signals are causal in terms of not being precisely valid and reliable. An economist will create a conclusion based on a certain observation that has a relation to the other.
As the law of accumulation increases wages for workers, the numbers of the working class will increase. As the population of workers increases, its size becomes a stimulate, pushing wages down. As a result of lower wages, profits for the capitalist will rise again, and accumulation will continue. The two laws are broken down into different concepts that Adam Smith goes into great detail about. The division of labor becomes a major theme in what and how Adam Smith interprets and describes to us about the economic world.
This boom and bust cycle happened in the UK in the late 1980s and early 1990s. Also, an increase in economic growth could lead to a balance of payments problem. If increased consumer spending, like in the UK, causes the growth then there will be an increase in imports. Is imports rises faster than exports there will be a deficit. However, growth could be export led e.g.
IMPORTANCE OF COST OF CAPITAL The determination of the firm's cost of capital is important from the point of view of both capital budgeting as well as capital structure planning decisions: (i) Capital budgeting decisions In capital budgeting decisions, the cost of capital is often used as a discountrate on the basis of which the firm's future cash flowsare discounted to find out their present values. Thus, thecost of capital is the very basis for financial appraisal of new capital expenditure proposals. The decision of thefinance manger will be irrational and wrong I case of cost of capital is not correctly determined. This is because the business must earn at least at a rate whichequals to its cost of capital in order to make at least a break-even. (ii) Capital structure decisions The cost of capital isalso an important consideration in capital structuredecisions.
Who should lead the way for Pan-Europa? They should incorporate strategies that would increase their stock price. Due to low stock prices, raiders are buying the stocks. They should increase net income and gross sales to drive up the stock price. They should reduce their debt due to high debt to equity ratio and capitalize on their increased market share.