Notes, summaries, assignments, exams, and problems for Economy

Chapter 8- NPV

Opportunity Cost of Capital: expected rate of return given up by investing in a project

Net Present Value: Present value of cash flows minus initial investment--> difference between value and cost.-->reflects time value of money

Risky dollar worth less than safe one

Capital Budgeting Decision: is concerned with finding out investments that maximize value of the firm

IRR: the discount rate at which project NPV = 0 --> accept project if IRR is greater than opportunity cost of capital

Payback Period- time until sum of project cash flows equals the initial investment--> accept if payback period is less than some specified number of years

Discounted Payback Period - Accept project if discounted payback period is less than some... Continue reading "Maximizing Firm Value Through Investment Analysis" »

ALOS: Average Length of Stay

Total occupied room nights/total bookings

Attrition

Difference between the number of rooms reserved compared to the number of rooms used

Booking Curve

An important tool for yielding that provides a visual representation of the pickup, number of bookings, availability, and yielding capacity of the hotel over time

Pick Up

No. of reservations between today & day of arrival

Contract

>30 nights + large volume

Group

>10 rooms, contract, deposit

• Corporate: Negotiated rate for a block with a specific company
• Association/Convention: Negotiated rate for a block with trade, professional, philanthropic association
• Government: Negotiated rate for a block with a qualifying government agency

Transient

Ind & groups

• Retail: Market

One of the advantages of licensing is: licensees have considerable autonomy.

Pollo Campero, a chicken restaurant chain: franchising.

Prior to the economic crisis of 1997-1998, South Korea's TRUE

Saab markets two luxury car models, country concentration/market segment concentration

Sony entered into a strategic partnership TRUE Starbucks' relentless pursuit of TRUE

Successful GSPs create win-win situations, mission

Tata Motors (India) acquired Jaguar (UK).

The agreements that allow McDonald's franchisees franchising

The alliance between GE T, The driving force T, The South Korean government has recently F

The disadvantages of joint venturing can Joint ventures allow partners to achieve synergy.

The failure of partnership between Great T, The joint venture... Continue reading "Global Strategic Alliances and Joint Ventures in Business" »

1.5 Protection vs. Integration

Protectionism: The protection objective is to keep alive domestic production and to increase import prices. For this purpose, it uses different instruments:

• Tariffs: taxes on imported goods to protect the domestic industry. An external tariff is a 'tax' on foreign products introduced in the domestic market. The effect is that its price is higher and it is more difficult to compete with domestic products.
• Quotas on imports: is a limitation of the quantity of foreign products to be imported, regardless of the price. Quotas limit imports and increase domestic prices. The limited quantity is an obstacle for foreign products when international prices have decreased.
• Non-tariff barriers: are administrative regulations for

The US: Prosperity, Crisis, and the New Deal

The Roaring Twenties: An Era of Economic Growth

The decade from 1918 to 1929, following World War I, was a period of significant economic growth in the United States. The American Way of Life, with its core values of individual initiative and the pursuit of success, became an influential model for much of the world.

Key Drivers of 1920s Economic Growth

• Significant technical innovations.
• The implementation of Fordism (mass production techniques), leading to mass consumption and a booming stock market.
• A notable rise in workers' wages.
• Extensive and persuasive advertising campaigns.
• The widespread availability of hire-purchase (installment buying) options.
• Increased accessibility to bank loans for businesses

Spanish Tax System

Income Tax

• Taxable Event: Worldwide income obtained by Individuals
• Taxpayer: Spain Resident Individuals
• Accrual: December 31

Corporation Tax

• Taxable Event: Worldwide income obtained by Companies
• Taxpayer: Spain Resident Companies
• Accrual: Last day of Tax Year

Non-Resident Income Tax

• Taxable Event: Income obtained in Spain by Non-Resident Individuals or Companies
• Taxpayer: Non-Resident Individuals or Companies
• Accrual: Depends on whether or not operations are carried on through a PE in Spain.

Wealth Tax

• Taxable Event: Worldwide assets owned by Individuals
• Taxpayer: The owner (Spain Resident Individuals)
• Accrual: December 31

Gift and Inheritance Tax

• Taxable Event:
  • Gift Tax: Acquisition inter vivos
  • Inheritance Tax: Acquisition mortis causa
  • Life

1.Which Of the following is not a criterionfor Judging the result of an economic policy

b.Employment

2.Economicsis the study ofhow

a.Scarce Resources are used to satisfy unlimited wants

3.The Opportunity cost of choice X can be defined as

b.The Most highly valued alternative to choice X

4.Carlo Discovers when he studies for his macroeconomics tests at the bar, he earns Better grades. He advises all students to study at the bar for similar results. Carlo his guilty of committing

a.The Fallacy of composition

5.Households Are

a.Suppliers In the input market

6.The price of Good C increases and as a result, The demand for good D increases. The two goods are

b.Substitutes

7.Because The nation N is operatingat a point Inside its PPF, it

b.Has Unemployed or inefficiently

Mercantilism (Dominant from The 16th to the 18th Century) - It's not efficient…Made a small group of people wealthy Emphasis on developing national power, building exports, getting bullion. Favored A large trade surplus, subsidizing big business, low wages.

Adam Smith - Is the "Father of Economics". Was a professor of Moral Philosophy in the Department of Logic. Made The Wealth of Nations in 1776. Describes the Building blocks of national economic wealth. Divisions of labor allows people To specialize Productivity rises up due to improvements in dexterity, ↓ use of Time, and lead to Interconnect Economy. Trade = another building block; leads People to act in their own self-interest. Argued FREE trade benefits all parties. NOT zero-sum "I... Continue reading "Economic Theories and Concepts: Mercantilism, Adam Smith, and More" »

Government Economic Policies

1) Economic growth: the government will always want the economy to grow. They can encourage growth through helping private business to grow, through low business taxes or through government involvement in growth sectors such as new high tech industries.

2) Prices: the government will want to make sure that the general level of prices in the economy is effectively managed. Prices need to rise in a relatively slow and predictable way so that future contracts can be made where both sides know the value of what they pay or receive. Government policies to control inflation might include reducing spending or raising taxes when prices start to rise.

3) Income distribution: all economies are characterized by inequalities in... Continue reading "Government Economic Policies and Financial Instruments" »