Question 1: Consider the questions below

John Levitt owns a popular burger stand on a trendy section of Melrose Boulevard. Following the success of his first burger stand, "Johnny's Burgers," which has been in operations for five years, John is now considering opening a second burger stand in another trendy location, on Sunset Boulevard in the Silver Lake area. John's market research shows that the clientele in both areas is similar: young professionals, typically without children, who like the traditional aspect of eating burgers, but also relish his gourmet, specially manufactured low-fat burgers and the healthy side dishes his stand also sells. John's overall plan is to get the second stand up and running for four years, and then sell both stands off to a new owner and retire to Santa Barbara.

John estimates that the cost of starting up a second stand will be as follows:

Purchase of retail kiosk (mobile retail food outlet) $750,000

Specialized kitchen equipment $60,000

Installation of the kitchen equipment $20,000

Furniture and fittings $50,000

John estimates that annual operating costs of the new location would be identical to those of his current stand:

Labor costs, inclusive of all overhead costs:

Kitchen and service staff (5 people) $200,000

License and rent costs $150,000

Raw materials:

Burgers (275 per day x 7 days x 52 weeks), see burgers' cost below

Drinks $38,400

Other food supplies $145,800

Nonfood supplies $50,200

The revenues at his current location are as follows:

Sales of burgers $6 per burger

Average daily sales 275 burgers

Other food items $270,000

Drinks $190,000

In addition to contributing profits, John expects that opening a second stand will decrease the cost of purchasing gourmet burgers from $1.5 cents to $1.35 cents in both locations. This is due to economies of scale. John also expects that he will be able to manage both locations himself, avoiding hiring a manager for the new location.

Assume that:

Increase in the receivables (AR) is expected to be equal to 12% of gross sales; the project will require additional cash (for giving change to the stand's customers paying cash) in the amount of 5% of gross sales. There will be no considerable investment in inventory as John implements "just-in-time" inventory system to keep the products fresh. Increase in payables associated with the new stand is estimated to be equal to 15% of the cost of raw products

Net working capital is fully recovered (i.e., reduced to zero) at the end of year 4

The marginal tax rate is 34 percent.

Cost of Capital is 10 percent.

Cost of the stand (kiosk), together with the cost of the equipment and the installation, is depreciated over five years according to the straight-line method.

Note: The definition of an asset's cost is all costs that are necessary to get an asset in place and ready for use. Therefore, the cost of the installation labor (wages and related fringe benefits) is part of the cost of the asset (and not an immediate expense of the accounting period).

The stand (together with the kitchen equipment) is expected to be worth $300,000 after four years of service.

1. Construct a model in Excel to evaluate the project.

You may use "Home Net" spreadsheet for inspiration. DO NOT follow it literally though as this is a different project with its own unique features.

2. What is the NPV of this investment?

3. Consider several values of cost of capital (for example, check values between 7% and 13% with 1% step) and compute NPV for each of these values. Use "Data Table" Construct NPV profile: Let cost of capital be your X-variable and NPV be your Y-variable.

4. Set some goal value for NPV (choose a value yourself) and use "goal seek" to find number of burgers that the new stand must sell annually to achieve the goal.

5. Suppose that you are unsure about the price John would be able to charge. John would like to generate at least $200,000 in NPV with the new kiosk. Using "goal seek" find price per burger necessary to achieve this goal

Question 2: Answer all questions below

O only aggregate demand. Question 48 1 pts The economy is in long-run equilibrium when () short-run aggregate supply intersects long-run aggregate supply. O aggregate demand intersects short-run aggregate supply. O aggregate demand intersects both long-run and short-run aggregate supply. the inflation rate is equal to zero. O aggregate demand intersects long-run aggregate supply. 1 pts Question 49QUESTION 25 An underperforming economy is one where O A. Actual real GDP is below the full employment level of GDP. O B. Workers' job performance lags due to slow changes in technology. O C. Actual real GDP is higher than the full employment level of GDP. O D. The full employment level of GDP is almost equal to actual real GDP.QUESTION 30 1. Table 23-6 The table below contains data for the country of Batterland, which produces only waffles an d pancakes. The base year is 2013. Year Price of Quantity of Price of Quantity of Waffles Waffles Pancakes Pancakes 2010 $2.00 80 $1.00 100 2011 $2.00 100 $2.00 120 2012 $2.00 120 $3.00 150 2013 $4.00 150 $3.00 200 Refer to Table 23-6. In 2010, this country's nominal GDP was $260 $440 $620 $760 QUESTION 31 Sheri, a U.S. citizen, works only in Germany. The value she adds to production in Germany i +'s included in both German GDP and U.S. GDP in German GDP, but is not included in U.S. GDP ET C in U.S. GDP, but is not included in German GDP in neither German GDP nor U.S. GDP QUESTION 32 Disposable personal income is the income that "households have left after paying taxes and non-tax payments to the government businesses have left after paying taxes and non-tax payments to the government households and noncorporate businesses have left after paying taxes and non- tax payments to the government households and businesses have left after paying taxes and non- tax payments to the government QUESTION 33 Gross domestic product adds together many different kinds of goods and services into a singl e measure of the value of economic activity. To do this, GDP makes use of C market prices " statistical estimates of the value of goods and services to consumers. prices based on the assumption that producers make no profits the maximum amount consumers would be willing to payQuestion 2 Complete the following table for a given country and show how can you determine if the country faces an inflation in 2018? Nominal GOP2017 Nominal GDP 2014 Real GDPXD18 P P Q P C 2 A I 3 3 3 R GOP Question 3 - What is the purchasing power of (1000) Rails after (7) years if the inflation rate is (4%) per year? What are the similarity and difference between "Minimum Wage Laws" and "Theory Of Efficiency Wages"? Question 4 A theatre that sells a ticket for a comedy show. The ticket price is 3 Rials to have a seat and watch the show. There is a snack to be given to each ticket buyer that cost 1 Rial. Now, consider this scenario: There are about 50 seats that are not sold and the show is few minutes to start and there is a standby customer willing to buy the ticket by price less than 3. What is the minimum price the theater can offer? Explain the logic about your answer. Question 5 A government is trying to reduce inflation but this has led to higher unemployment. Explain the role of the prices stickiness in causing this tradeoffs