Smith Inc. is a public company but is tightly controlled by Joe Smith, the grandson of the founder. Smith is quite confident about his ability to evaluate investments in all aspects of the business. The situation at Smith Inc. is quite different from that at Jones Inc., although they share a similar line of business. Jones Inc. has a much less powerful CEO, who delegates much more control to the heads of the firm’s various business units. In fact, Fred Jones, the company’s CEO, meets with the heads of the business units, and they make capital allocation choices as a group. Discuss how and why Smith Inc. and Jones Inc. might have different approaches for determining the discount rates used to evaluate their projects.

Dollywood corporation accumulates the following data concerning a mixed cost, using miles as the activity level. miles driven total cost january 10,000 $16,500 february 8,000 $14,500 march 9,000 $12,500 april 7,000 $12,000 compute the variable and fixed cost elements using the high-low method

Suppose the marginal damage and marginal benefit curves in a polluted neighborhood are md = p/3 and mb = 4 – p. also, suppose that transactions costs are low, so that the consumers and the firm can bargain. we saw that in this case, the socially-optimal level of pollution is achieved. start by computing the socially-optimal p. then, for each of the following cases, compute the amount of money transferred through the bargaining process, and indicate who pays whom (i. e., whether consumers pay the firm, or vice versa). also, compute the gains to each party relative to the status quo (i. e., the starting point of the bargaining process).a)consumers have the right to clean air; firm is dominant in the bargaining process. b)consumers have the right to clean air; consumers are dominant in the bargaining process. c)firm has the right to pollute; firm is dominant in the bargaining process. d)firm has the right to pollute; consumers are dominant in the bargaining proces

Biochemical corp. requires $600,000 in financing over the next three years. the firm can borrow the funds for three years at 10.80 percent interest per year. the ceo decides to do a forecast and predicts that if she utilizes short-term financing instead, she will pay 7.50 percent interest in the first year, 12.15 percent interest in the second year, and 8.25 percent interest in the third year. assume interest is paid in full at the end of each year. a)determine the total interest cost under each plan. a) long term fixed rate: b) short term fixed rate: b) which plan is less costly? a) long term fixed rate plan b) short term variable rate plan