The A-Plus pharmaceutical company hascompleted the scientific work on a new product.  Theinvestment needed for development of this completed research into a marketable product is being proposed.All the relevant data is shown in the data block and financial statements below. This is followed by the analysis needed to determine the present worth and internal rate of return. a The COGS estimate and particularly the “Cost reduction each year” of $5 has been questioned. Determine the sensitivity of the present worth to this annual reduction. Use values of the “Cost reduction each year” from the forecasted value of $5.00 down to $3.00 in 50 cent intervals.  b Determine the “cost of reduction each year” that results in the breakeven present worth (PW = 0). Data Block Investment $3,500,000 in year 0 depreciation 5-year MACRS salvage value $0 in year 4 0 1 2 3 4   5-year MACRS 20.00% 32.00% 19.20% 11.52%   Depreciation $700,000 $1,120,000 $672,000 $403,200 Book value $3,500,000 $2,800,000 $1,680,000 $1,008,000 $604,800 Ending Asset Value $2,000,000 Revenues and COGS Quantity Sold 20000 20000 20000 20000 Price each $100 $100 $100 $100 Revenue $2,000,000 $2,000,000 $2,000,000 $2,000,000 Cost reduction each year $5.00 starting in year 2   Cost each $45 $40 $35 $30 COGS $900,000 $800,000 $700,000 $600,000 Expenses SG&A $250,000 $250,000 $250,000 $250,000 Working Capital Working capital $500,000 $500,000 $400,000 $350,000 $300,000 Change in Working Capital $500,000 $0 ($100,000) ($50,000) ($50,000) Rates and Time Horizon MARR 10% Income Tax rate 20% Capital Gains Tax rate 15% Time Horizon 4 years Income Statement           Year 0 1 2 3 4 Revenue $2,000,000 $2,000,000 $2,000,000 $2,000,000 COGS ($900,000) ($800,000) ($700,000) ($600,000) Gross Margin   $1,100,000 $1,200,000 $1,300,000 $1,400,000 SG&A ($250,000) ($250,000) ($250,000) ($250,000) Depreciation ($700,000) ($1,120,000) ($672,000) ($403,200) EBIT   $150,000 ($170,000) $378,000 $746,800 Taxes ($30,000) $34,000 ($75,600) ($149,360) Net Income   $120,000 ($136,000) $302,400 $597,440 Cash Flow Statement           Year 0 1 2 3 4 Operations     Net Income $120,000 ($136,000) $302,400 $597,440 Depreciation $700,000 $1,120,000 $672,000 $403,200 Total Operations activities $0 $820,000 $984,000 $974,400 $1,000,640 Investment   Working Capital ($500,000) $0 $100,000 $50,000 $50,000 Working capital Recovery ($300,000) Investment ($3,500,000)   Salvage $0 Salvage $0 Ending Value $2,000,000 Ending Value $2,000,000 Tax on gain ($209,280) -Book Value ($604,800) Total Capital activities ($4,000,000) $0 $100,000 $50,000 $1,540,720   Gain $1,395,200 Cash Flow ($4,000,000) $820,000 $1,084,000 $1,024,400 $2,541,360   Tax ($209,280)     Present Worth IRR $146,752 11.41%     48uު

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MACRO

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MACROECONOMICS

Stabilize the Debt simulation

Access and complete the Stabilize the Debt simulation at the Committee for a Responsible Federal Budget website:

http://crfb.org/stabilizethedebt/

Answer the follow four short answer questions (about a paragraph each):

[1] What changes did you make to the U.S. Budget (be specific) ?

[2] Do you think that any of the changes that you made would be considered to be popular (be specific)? 

[3] Do you think that any of the changes that you made would be considered to be unpopular (be specific)? 

[4] Were you successful in reducing the U.S. debt to 60% of GDP by 2024 (why or why not)? Note that if you were or were not successful is not a factor in grading, tell me about the result is what is important along with why.

Submit your answers in MS-Word (.doc or .docx) or Rich Text Format (.rtf) format.

Regarding this assignment, I am looking for substantial content based on the crfb.org website (explained content, positions and arguments). Do not use other websites (such as about Canada; we are only looking at the United States based on the crfb.org website).

 

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Macroeconomics

Egypt’s inflation rate rose at its slowest pace in nearly a year in November while the current account deficit fell by more than 65% in the first quarter of the fiscal year, offering the latest evidence that the economy is rebounding. “The economy is turning a corner: 2017 was a very difficult year and 2018 is probably going to be a better year and the recent data backs that up,” said Simon Kitchen, head of strategy at EFG-Hermes, Egypt’s largest investment bank. Since November 2016, the central bank has repeatedly raised its interest rate to damp soaring prices, but faced criticism from business leaders who said that this would stifle growth. Economists said they expected the central bank to start cutting the interest rate that it charges commercial banks in the first half of 2018. EFG-Hermes expects a reduction of some 400 basis points through next year. State and explain if you agree with this statement: ‘While raising interest rates helped to dampen soaring prices, it stifled growth’ from the above information given about Egypt. Based on the Egypt’s scenario above, identify the specific type of policy Egypt’s central bank intends to adopt in the first half of 2018 and provide 2 evidence to support your answer. Trade sector analysts have commented that the policy set to be adopted in 2018 will make Egyptian exports more competitive. State and explain whether is it true or false, and state and explain Its subsequent impact on Egypt’s current account position based on macroeconomics relevant concepts.

After contracting in the last quarter of 2016 and the first of this year, South Africa’s economy has recovered, led by a large expansion in agricultural activity. For 2017, the nation saw an increase in agricultural exports of R22 billion, but incurred a decline in sales of mining and manufactured goods by R6.4 billion. As a preferred investment destination for many of the world’s top companies South Africa saw American MNC, Ford, investing R3 billion at its Pretoria (a city in South Africa) assembly plant in order to increase production for its Ford Ranger model. Japanese automotive manufacturer, Toyota, also invested R6.1 billion in a production plant while German automobile giant, BMW, constructed a R6 billion state-of-the-art body shop and Beijing Automobile International Corporation invested R11 billion in an automotive manufacturing plant in the country. Portfolio flows also climbed, with non-residents buying South African shares and bonds worth R88.4 billion.

Calculate the current account balance, direct Investments, portfolio Investments & financial derivatives, capital and financial account balance, and overall Balance in clear workings steps by steps with clear explanation.

 

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Macroeconomic environment influences the performance of a firm and the magnitude of influence is mostly tied to the stage of a business cycle. Discuss macroeconomic environment associated with recessionary and inflationary periods and how such environments affects businesses. 250+ Words.

 

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