Notes, summaries, assignments, exams, and exercises for Economics for University

Balance Sheet Account Classification

Active Fixed Assets (Group 2)

Intangible assets

• Expenditure on research and development
• Administrative concessions
• Industrial property
• Software

Tangible fixed assets

• Land and natural resources
• Construction
• Plant
• Machinery
• Tools
• Other facilities
• Furniture
• Information processing equipment
• Transport elements
• Other tangible assets

Long-term financial investments

• Long-term financial investments in equity instruments
• Long-term debt
• Long term
• Loans to/for disposal of fixed assets
• Long-term loans to staff

Stocks (Group 3)

• Goods
• Raw materials
• Elements and assemblies incorporated
• Fuels
• Parts
• Mixed media
• Packaging
• Packaging
• Office supplies
• Work in progress
• Semi-finished products
• Finished goods
• By-products
• Waste
• Materials recovered

Debtors for Commercial

Traditional Company Characteristics

The characteristics of traditional companies during the consolidation phase of the Industrial Revolution included being run by their owners, partners specializing in management, few clerks, a lack of separation of functions between departments, traditional funding mechanisms (financing), and double-entry bookkeeping.

Impact of Railways and Telecommunications

From an economic perspective, the development of railways and telecommunications resulted in several benefits for companies in general:

• Provided industry and commerce with secure, fast, and regular communications.
• Reduced transport and marketing costs.
• Created safe, integrated markets.
• Contributed to the income growth of the countries in which they were built.

A) Interpreting the Beta Coefficient of the Stock

Based on the graph, the Capital Market Line (CML) equation is: y = 1.266x + 0.0012. Therefore, the Beta coefficient ($eta$) is 1.266.

Beta measures the degree of volatility relative to the market. Since the calculated Beta (1.266) is greater than 1, it indicates that market fluctuations affect this stock more than proportionally. Consequently, this stock will experience greater variations (both rise and fall) compared to the overall IBEX index.

B) Systematic and Specific Risk Calculation (OHL/DOHLER)

Using the total risk variance in profitability for the stock (DOHLER/OHL), we calculate and discuss the systematic and specific risk components:

• Systematic Risk (Market Risk): 39.32%. This indicates

The Public Budget Cycle Stages

The life of a budget can extend for at least three years. It involves four main phases:

• Preparation
• Discussion and Approval
• Implementation
• Control

1. Budget Preparation

This phase involves multiple negotiations, which are the most direct responsibility for preparing the budget document among the various ministerial departments and state bodies. Proposals originating from administrative units at lower and upper levels are consolidated into the project presented by the government. The absolute executive power plays a crucial role in budget preparation during this stage.

2. Discussion and Approval

The legislative power, represented by the chambers, is the protagonist here. If the budget for the new financial year has not...

Accounting Exercise No. 4

Use the following data to develop the journal, ledgers, and tax balance.

Transaction Data

• 01-Dec: Sebastian Errate initiates activities by providing $2,600,000 in cash, a computer assessed for $560,000, furniture and chairs for $650,000, and a van for $3,890,000.
• 02-Dec: Open a current account in the bank and make an initial deposit of $2,000,000.
• 03-Dec: Buy a used refrigerator for $300,000 (including VAT) and a desk for $600,000 (plus VAT), paying by check No. 1.
• 05-Dec: Buy merchandise on credit for $1,750,000 for 90 days net.
• 07-Dec: Pay electricity and water bills in cash for $150,000.
• 08-Dec: Sell goods for cash to Henry Pinera (Fact 0001) for $1,450,000 gross; the total amount is deposited the next day at the bank.
• 09-

Demand Elasticity Concepts

Elastic Demand: When the percentage change in the amount demanded surpasses the percentage change in price. That is, $E > 1$ (when the consumer response to a change in price is significant).

Inelastic Demand: If the percentage change in quantity demanded is less than the percentage change in price, so $E < 1$ (when the reaction of consumers to a change in the price of the good is small).

Unit Elastic Demand: When the percentage change in quantity demanded is exactly equal to the percentage change in price. This is the limiting case, $E = 1$.

Total Revenue and Elasticity

When a price changes, the change in total revenue of producers depends on the elasticity of demand.

• Elastic Demand: A reduction of 1% in price increases

Capital Cash Flow (CCF) and Components

Capital Cash Flow (CCF)

Cash flow available to all holders — debt and equity.

CCF = Cash Flow to Shares (CFAC) + Cash Flow to Debt (CFD)

Cash Flow to Debt (CFD) = interest paid on debt + change in debt (growth of debt).

Example notation: CFD = D * k_d + ΔD

Therefore: CCF = CFAC + CFD

Cost of Equity and Market Rates

Ke = Required return on equity (cost of equity)

Rf = Risk-free rate

Ke = Rf + equity risk premium

E(Rm) = Rf + market risk premium

Firm Value, WACC and Tax Shields

V_L = D + E

V_L = V_U + PV(tax shields)

WACC: Weighted average cost of capital — the discount rate used to discount operating cash flows to value a company using discounted cash flows.

EVA and Economic Profit

EVA (Economic Value Added): Net operating...

Impact of Purchase Volume Failures

Failures in purchase volume can lead to significant disruptions in production.

Essential Written Purchasing Policies

To achieve organizational goals, purchasing policies should address:

• Power Supply: Ensuring a continuous flow of required materials.
• Specifications: Establishing acceptable characteristics and tolerances for goods.
• Price and Quality: Guidelines that balance cost with desired quality standards.
• Research and Development: Seeking new products or improving existing ones.

Consequences of Excess Purchase Volume

Excessive purchasing leads to unsold inventory, material shortages, and increased carrying costs.

Inventory Control Methods

1. Maximum and Minimum: Used for standard materials with stable prices and high-

The Relationship Between Business and Financial Decisions

Decision-making is central to budgetary management. Budgets establish specific objectives that influence the decisions made during business operations to achieve those goals. A budget can be approached in two ways: as a forecast (a prediction of future events) or as an objective (a target to be achieved).

Functions and Purposes of the Budget

• Planning Tool: Defines the roadmap for the organization.
• Coordination: Integrates various areas of responsibility.
• Information Vehicle: Communicates financial expectations.
• Control Mechanism: Monitors responsible management.
• Motivation Element: Encourages performance toward goals.

Phases of the Budget Process

1. Distribution of general objectives.
2. Distribution

Poverty Statistics and Characteristics in Spain

• 2,192,000 households, with 8.5 million people under the threshold of 50% of the RDN; half of them are below 35% of the RDN.
• 85% of poor households are between 25% and 50% of the RDN.
• 86,800 households and 528,000 people living below 15% of the RDN.
• In the 1980s, severe poverty declined substantially.
• In the 1990s it slightly increased.
• Poverty is concentrated in urban areas more than in rural ones; the rural poor population is older and, protected by the pension system, will approach the poverty threshold.
• The highest rates occur on the border with Portugal and in the center.
• Process of juvenilization: accelerated youth poverty; 44% of the poor are younger than 25 years.
• Larger family size is associated