What is the impact of the following factors on the optimal method of procuring an input. a. Benefits from specialization. multiple choice 1 Reduce the benefits of contracts. Reduce the benefits of vertical integration. Increase the benefits of vertical integration. Reduce the benefits of spot exchange. b. Bureaucracy costs. multiple choice 2 Reduce the benefits of spot exchange. Reduce the benefits of vertical integration. Reduce the benefits of contracts. Increase the benefits of vertical integration. c. Opportunism on either side of the transaction. multiple choice 3 Lead to less detailed contracts. Lead to contracts that are more detailed or vertical integration. Lead to the use of spot exchange. d. Specialized investments. multiple choice 4 Make spot exchange unattractive. Make vertical integration unattractive. Make contracts unattractive. e. Unspecifiable events. multiple choice 5 Make spot exchange unattractive. Make vertical integration unattractive. Make contracts unattractive. f. Bargaining costs. multiple choice 6 Lead to spot exchange. Lead to longer contracts or vertical integration. Lead to shorter contracts.

Imagine you own an established startup with growing profits. you are looking for funding to greatly expand company operations. what method of financing would be best for you?

Shrieves casting company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by sidney johnson, a recently graduated mba. the production line would be set up in unused space in the main plant. the machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. the machinery has an economic life of 4 years, and shrieves has obtained a special tax ruling that places the equipment in the macrs 3-year class. the machinery is expected to have a salvage value of $25,000 after 4 years of use. the new line would generate incremental sales of 1,250 units per year for 4 years at an incremental cost of $100 per unit in the first year, excluding depreciation. each unit can be sold for $200 in the first year. the sales price and cost are both expected to increase by 3% per year due to inflation. further, to handle the new line, the firm’s net working capital would have to increase by an amount equal to 12% of sales revenues. the firm’s tax rate is 40%, and its overall weighted average cost of capital, which is the risk-adjusted cost of capital for an average project (r), is 10%. define “incremental cash flow.” (1) should you subtract interest expense or dividends when calculating project cash flow?

Suppose your rich uncle gave you $50,000, which you plan to use for graduate school. you will make the investment now, you expect to earn an annual return of 6%, and you will make 4 equal annual withdrawals, beginning 1 year from today. under these conditions, how large would each withdrawal be so there would be no funds remaining in the account after the 4th withdraw?