Figure 4   Refer to figure 4. If the economy is at point b, which of the following events could restore full employment?

If the marginal propensity to consume is 0.85, then the fiscal multiplier is

Aggregate demand reflects the total spending in an economy from which of the following sectors?

Name the tissue in the blue bracket

Name the layer in the blue bracket:

Sunstrand Incorporated has million shares of common stock priced at $116, million shares of preferred stock priced at $50 and million bonds priced at $1075. What is the weight of common stock in Sunstrand’s capital structure? (Express your answer as a percentage to two decimal places, 12.34 percent would be 12.34, for example.)

A firm has bonds with 20 years to maturity, paying a $65 annual coupon, face value of $1000, and current price of $986. If the firm’s tax rate is 21%, what is the firm’s after-tax (aka “effective”) cost of debt? (Express your answer as a percentage to two decimal places, 12.34 percent would be 12.34, for example.)

You are considering a project that will cost you $16,000,000 initially. Your cost of capital for this project is 8%. There is a 80% probability that the project will generate cash flows of $2,000,000 per year in perpetuity, and a 20% probability that the project will generate cash flows of $500,000 per year in perpetuity. If you could sell the project at the end of the first year for $, what is the value of this abandonment option today? Enter your answer in dollars and cents. For example, $123,456 would be 123,456.

You are a subcontractor bidding on a contract to provide car batteries to be sold at WalMart stores throughout Ohio for three years. You wish to enter a bid price that makes your NPV exactly $0. You have completed Steps 1-3 of the process explained at the end of the Chapter 11 slides and you find that you need to generate an annual OCF of $275,587.20 to get exactly NPV=0. Solve for the price per battery that you need to charge using the following information:  Quantity: batteries per year Variable costs: $37 per battery Fixed costs: $585,000 per year Tax rate: 21% Depreciation: $200,000 per year Enter your answer in dollars and cents.

A firm will have free cash flows next year (FCF1) of $20,000,000. The growth rate in FCF will be a constant 3% per year. The firm’s cost of debt, rD, is 5% and its cost of equity, rS, is 10%. The weights of debt and equity are 0.5 and 0.5. The firm’s tax rate is 21%. Calculate the value of the firm’s operations using the pre-tax WACC and the after-tax WACC. The difference will be the firm’s PV(ITS). What is this difference? Round your answer to the nearest dollar.