Exam 17: Macroeconomic and Industry Analysis

Two firms, A and B, both produce widgets. The price of widgets is $1 each. Firm A has total fixed costs of $500,000 and variable costs of 50¢ per widget. Firm B has total fixed costs of $240,000 and variable costs of 75¢ per widget. The corporate tax rate is 40%. If the economy is strong, each firm will sell 1,200,000 widgets. If the economy enters a recession, each firm will sell 1,100,000 widgets. If the economy enters a recession, the after-tax profit of Firm B will be

If the economy is growing, firms with low operating leverage will experience

The North American Industry Classification System (NAICS) codes

Investment manager Peter Lynch refers to firms that are in bankruptcy or soon might be as

Two firms, A and B, both produce widgets. The price of widgets is $1 each. Firm A has total fixed costs of $500,000 and variable costs of 50¢ per widget. Firm B has total fixed costs of $240,000 and variable costs of 75¢ per widget. The corporate tax rate is 40%. If the economy is strong, each firm will sell 1,200,000 widgets. If the economy enters a recession, each firm will sell 1,100,000 widgets. If the economy enters a recession, the after-tax profit of Firm A will be

If the economy is shrinking, firms with high operating leverage will experience

During which stage of the industry life cycle would a firm experience stable growth in sales?

The industry with the highest return in 2018 was

The process of estimating the dividends and earnings that can be expected from the firm based on determinants of value is called

The industry with the lowest return in 2018 was

Two firms, C and D, both produce coat hangers. The price of coat hangers is $1.20 each. Firm C has total fixed costs of $750,000 and variable costs of 30¢ per coat hanger. Firm D has total fixed costs of $400,000 and variable costs of 50¢ per coat hanger. The corporate tax rate is 40%. If the economy is strong, each firm will sell 2,000,000 coat hangers. If the economy enters a recession, each firm will sell 1,400,000 coat hangers. If the economy is strong, the after-tax profit of firm C will be

An example of a positive demand shock is

The stock market exhibiting the highest local currency return in 2018 was

The stock market exhibiting the highest U.S. dollar return in 2018 was

In the consolidation stage of the industry life cycle,

Inflation

A firm in an industry that is very sensitive to the business cycle will likely have a stock beta

The industry life cycle is described by which of the following stage(s)?

Industrial production increases. This is a ___________________.

If the currency of your country is appreciating, the result should be to ______ exports and to _______ imports.