Question: Suppose you currently have $5000 in your

> In 2015, the Obama administration completed its Clean Power Plan, requiring power plants to cut greenhouse gas emissions by 32 percent from 2005 levels by the year 2025. These rules, which will benefit companies that have made major investments in low ca

> OSHA has recently warned that companies should not automatically subject employees to post-injury drug testing, but rather should limit drug tests to situations where drug abuse likely caused the incident. What reasons could be given to defend OSHA's adv

> In October 2015, workers at Hansae Vietnam, a plant from which Nike sourced its university logo goods, went on strike. When the Workers Rights Coalition (WRC) sought access so that a monitoring organization could conduct an onsite investigation, Nike bal

> In March 2016, fast-food workers in 19 cities complained to OSHA that at MacDonald’s, the hot oil, steamy grills, greasy slippery floors, understaffing and pressure to work faster created unreasonably dangerous working conditions. The workers were in the

> Would you be willing to pay more for products purchased through Amazon to improve pay and labor conditions for its warehouse workers? Research: Have current low-end working conditions improved at Amazon?

> Baystate Medical Center in Massachusetts adopted a policy requiring all employees to either get a flu shot or wear a facemask over their nose and mouth while on duty. Clarke refused the vaccination on the basis of her religious beliefs. When she failed t

> How would you resolve the firearm dilemma? What legal issues should you consider? Has your state adopted laws that prohibit companies from banning firearms at work? Find a lawsuit challenging this law. How did the court rule?

> (a) In May, 2013 Hawaii became the second state to pass a Domestic Workers Bill of Rights. Find out if similar legislation is pending in your state. (b) See what you can find out about efforts to organize caretakers and other domestic workers into unions

> In 2010 California adopted the Transparency in Supply Chains Act. This law requires large retail sellers and manufacturers to disclose on their websites their "efforts to eradicate slavery and trafficking in their direct supply chains." In 2015, the U.K.

> 1. The Pierce majority announces a new “cause of action in New Jersey for wrongful discharge when the discharge is contrary to a clear mandate of public policy.” Yet Dr. Pierce lost this case. Why did the majority rule against her? 2. In dissent, Judge P

> The New York Times reported in 2015 on the nail salon business: respiratory and skin ailments are common among salon workers, and medical research links the chemicals used with serious health problems. Research: Find out if the media exposure has led to

> What impact might global slavery have on the health and safety conditions of ordinary workers?

> Title VII protects those who make claims against retaliation for asserting their rights. In 2016, the EEOC posted its first anti-retaliation guidance in more than eighteen years. Find out how the EEOC would answer the following questions: (a) When does e

> The French made international headlines during the summer 2016, when police accosted Muslim women who violated local bans by wearing full-body "burkinis" at the beach in Cannes. What do you think is behind these dress codes? Are they equivalent? Should t

> Schultz favors broad efforts to achieve integration and equality throughout a company over efforts to “sanitize the workplace” by eliminating all forms of sexuality. What do you think she means by this? Can you give examples?

> H-2B Program – who benefits and who is disadvantaged?

> Should employees have some voice in redefining qualities that make them valuable?

> (a) & (b) Pros and cons / should the USA adopt a similar rule? (c) Has the proposal been adopted?

> (a) Locate the 2016 report by the Joint Economic Committee Democratic Staff of the U.S. Congress and see what you can find out about your state, and the impact of the wage gap as women age. (b) Fair Pay Act and Paycheck Fairness Act (c) US Women’s Soccer

> In-state tuition for children of undocumented immigrants.

> 1. What was Sullivan’s legal argument? 2. What are the arguments of the dissent in this case? 3. What is ethically objectionable about “front-running?” 4. Murphy was an accountant in the financial department of a large company. He was fired after he dis

> (a). Who are the stakeholders in this situation? What ethical issues arise? How would a utilitarian view this? A deontologist? (b). What can you find out about the lawsuits this hack spawned? (c). Does Ashley Madison still exist? Is it flourishing?

> What are the ethical implications of this sea change in hiring practices?

> Can you find other laws that compel web sites to remove posts? How effective are the technological controls in this area? Does Snap chat really make posted photos disappear for good?

> San Bernardino Shooting and Apple Privacy - What are the tensions in this debate? Would a utilitarian say that Apple should help the FBI? A deontologist?

> (a). Is this kind of consent voluntary? Do an ethical analysis. (b). Do people always “like” a product or a service because they believe it is good? (c). What happened when another Facebook user, Angela Fraley, sued the company for its sponsored stories?

> (a). What happened in EEOC v. Flambeau, 131 F. Supp. 3d 849 (U.S. District Court for the Western District of Wisconsin, 2015). (b). In 2016 the EEOC published rules on this issue. What are they? (c). What can you find out about the ethical issues that su

> Analysis of census data revealed that by January 2016, work-at-home among the non-self-employed population had grown by 103% since 2005, and 3.7 million employees worked from home at least half the time. At the same time, there is a trend toward "homing

> Apple’s policy to not read employee emails - What might be the advantages and disadvantages of such policies from an employee's viewpoint? An employer's?

> (a). What has the National Workrights Institute been doing about this problem? (b). What is the Ban the Box movement? Has it had successes? Has the EEOC adopted its recommendation? (c). What would Milton Friedman say about hiring people who have served p

> Human resource research of job applicants: Which of these actions do you think would amount to intrusion? How ethical would each be? (a) Googling the applicant’s name (b) Requiring that the applicant “friend” the company, so it can access more informati

> 1. What does the writer mean by Nikefication? By Uberization? Who are the stakeholders as these models of the corporation shift? Which stakeholders benefit and which are harmed? 2. What does he mean by “the hapless precariat?” 3. When sued by drivers, co

> 1. Judge Parillo elaborates on several exceptions to the “no duty” rule. What are they? Which exception does he think might apply to the defendants in this case? 2. What are the four factors the judge uses to determine whether the defendants might be res

> Your daughter is currently eight years old. You anticipate that she will be going to college in 10 years. You would like to have $100,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 3%

> The Tillamook County Creamery Association manufactures Tillamook Cheddar Cheese. It markets this cheese in four varieties: aged 2 months, 9 months, 15 months, and 2 years. At the shop in the dairy, it sells 2 pounds of each variety for the following pric

> You are considering purchasing a warehouse. The cost to purchase the warehouse is $500,000. Renting the equivalent space costs $20,000 per year. If the annual interest rate is 6%, at what rate must rental cost increase each year to make the cost of renti

> You are shopping for a car and read the following advertisement in the newspaper: “Own a new Spitfire! No money down. Four annual payments of just $10,000.” You have shopped around and know that you can buy a Spitfire for cash for $32,500. What is the in

> Suppose you invest $2000 today and receive $10,000 in five years. a. What is the IRR of this opportunity? b. Suppose another investment opportunity also requires $2000 upfront, but pays an equal amount at the end of each year for the next five years. If

> Problem 45 is not very realistic because most retirement plans do not allow you to specify a fixed amount to contribute every year. Instead, you are required to specify a fixed percentage of your salary that you want to contribute. Assume that your start

> You have just turned 30 years old, have just received your MBA, and have accepted your first job. Now you must decide how much money to put into your retirement plan. The plan works as follows: Every dollar in the plan earns 7% per year. You cannot make

> You are 35 years old, and decide to save $5000 each year (with the first deposit one year from now), in an account paying 8% interest per year. You will make your last deposit 30 years from now when you retire at age 65. During retirement, you plan to wi

> You realize that the plan in Problem 42 has a flaw. Because your income will increase over your lifetime, it would be more realistic to save less now and more later. Instead of putting the same amount aside each year, you decide to let the amount that yo

> Suppose you take the 30-year mortgage described in Problem 39, part (a). How much will you still owe on the mortgage after 15 years? Data from Problem 39: You have just made an offer on a new home and are seeking a mortgage. You need to borrow $600,000

> When a pharmaceutical company develops a new drug, it often receives patent protection for that medication, allowing it to charge a higher price. Explain how this public policy of providing patent protection might help align the corporation’s interests w

> You have just made an offer on a new home and are seeking a mortgage. You need to borrow $600,000. a. The bank offers a 30-year mortgage with fixed monthly payments and an interest rate of 0.5% per month. What is the amount of your monthly payment if you

> You have decided to buy a perpetuity. The bond makes one payment at the end of every year forever and has an interest rate of 5%. If you initially put $1000 into the bond, what is the payment every year?

> Your credit card charges an interest rate of 2% per month. You have a current balance of $1000, and want to pay it off. Suppose you can afford to pay off $100 per month. What will your balance be at the end of one year?

> You have just entered an MBA program and have decided to pay for your living expenses using a credit card that has no minimum monthly payment. You intend to charge $1000 per month on the card for the next 21 months. The card carries a monthly interest ra

> Your firm spends $5000 every month on printing and mailing costs, sending statements to customers. If the interest rate is 0.5% per month, what is the present value of eliminating this cost by sending the statements electronically?

> Your brother has offered to give you $100, starting next year, and after that growing at 3% for the next 20 years. You would like to calculate the value of this offer by calculating how much money you would need to deposit in the local bank so that the a

> Ten years ago Diana Torres wrote what has become the leading Tort textbook. She has been receiving royalties based on revenues reported by the publisher. These revenues started at $1 million in the first year, and grew steadily by 5% per year. Her royalt

> You are running a hot Internet company. Analysts predict that its earnings will grow at 30% per year for the next five years. After that, as competition increases, earnings growth is expected to slow to 2% per year and continue at that level forever. You

> Your oldest daughter is about to start kindergarten at a private school. Tuition is $10,000 per year, payable at the beginning of the school year. You expect to keep your daughter in private school through high school. You expect tuition to increase at a

> You have decided to form a new start-up company developing applications for the iPhone. Give examples of the three distinct types of financial decisions you will need to make.

> You are 25 years old and decide to start saving for your retirement. You plan to save $5000 at the end of each year (so the first deposit will be one year from now), and will make the last deposit when you retire at age 65. Suppose you earn 8% per year o

> When you purchased your house, you took out a 30-year annual-payment mortgage with an interest rate of 6% per year. The annual payment on the mortgage is $12,000. You have just made a payment and have now decided to pay the mortgage off by repaying the o

> You are head of the Schwartz Family Endowment for the Arts. You have decided to fund an arts school in the San Francisco Bay area in perpetuity. Every five years, you will give the school $1 million. The first payment will occur five years from today. If

> You currently have a four-year-old mortgage outstanding on your house. You make monthly payments of $1500. You have just made a payment. The mortgage has 26 years to go (i.e., it had an original term of 30 years). Show the timeline from your perspective.

> How would your answer to Problem 16 change if the machine takes one year to build? Data from Problem 16: Your buddy in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year to manufa

> Your buddy in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year to manufacture $100. However, once built, the machine will last forever and will require no maintenance. The machine

> Your firm has a risk-free investment opportunity where it can invest $160,000 today and receive $170,000 in one year. For what level of interest rates is this project attractive?

> You have an investment opportunity in Japan. It requires an investment of $1 million today and will produce a cash flow of ¥114 million in one year with no risk. Suppose the risk-free interest rate in the United States is 4%, the risk-free interest rate

> Suppose the risk-free interest rate is 4%. a. Having $200 today is equivalent to having what amount in one year? b. Having $200 in one year is equivalent to having what amount today? c. Which would you prefer, $200 today or $200 in one year? Does your an

> You have decided to take your daughter skiing in Utah. The best price you have been able to find for a round trip air ticket is $359. You notice that you have 20,000 frequent flier miles that are about to expire, but you need 25,000 miles to get her a fr

> Find online the annual 10-K report for Costco Wholesale Corporation (COST) for fiscal year 2015 (filed in October 2015). Answer the following questions from their balance sheet: a. How much cash did Costco have at the end of the fiscal year? b. What were

> Suppose the current market price of corn is $3.75 per bushel. Your firm has a technology that can convert 1 bushel of corn to 3 gallons of ethanol. If the cost of conversion is $1.60 per bushel, at what market price of ethanol does conversion become attr

> Suppose the yield on a one-year, zero-coupon bond is 5%. The forward rate for year 2 is 4%, and the forward rate for year 3 is 3%. What is the yield to maturity of a zero-coupon bond that matures in three years?

> Suppose you wanted to lock in an interest rate for an investment that begins in one year and matures in five years. What rate would you obtain if there are no arbitrage opportunities?

> What is the forward rate for year 5 (the forward rate quoted today for an investment that begins in four years and matures in five years)?

> What is the forward rate for year 3 (the forward rate quoted today for an investment that begins in two years and matures in three years)? What can you conclude about forward rates when the yield curve is flat?

> What is the forward rate for year 2 (the forward rate quoted today for an investment that begins in one year and matures in two years)?

> You are thinking of making an investment in a new plant. The plant will generate revenues of $1 million per year for as long as you maintain it. You expect that the maintenance cost will start at $50,000 per year and will increase 5% per year thereafter.

> Your grandmother bought an annuity from Rock Solid Life Insurance Company for $200,000 when she retired. In exchange for the $200,000, Rock Solid will pay her $25,000 per year until she dies. The interest rate is 5%. How long must she live after the day

> Xia Corporation is a company whose sole assets are $100,000 in cash and three projects that it will undertake. The projects are risk-free and have the following cash flows: Xia plans to invest any unused cash today at the risk-free interest rate of 10%

> Consider a portfolio of two securities: one share of Johnson and Johnson (JNJ) stock and a bond that pays $100 in one year. Suppose this portfolio is currently trading with a bid price of $141.65 and an ask price of $142.25, and the bond is trading with

> Suppose Hewlett-Packard (HPQ) stock is currently trading on the NYSE with a bid price of $28.00 and an ask price of $28.10. At the same time, a NASDAQ dealer posts a bid price for HPQ of $27.85 and an ask price of $27.95. a. Is there an arbitrage opportu

> Suppose a risky security pays an expected cash flow of $80 in one year. The risk-free rate is 4%, and the expected return on the market index is 10%. a. If the returns of this security are high when the economy is strong and low when the economy is weak,

> You work for Innovation Partners and are considering creating a new security. This security would pay out $1000 in one year if the last digit in the closing value of the Dow Jones Industrial index in one year is an even number and zero if it is odd. The

> Suppose security C has a payoff of $600 when the economy is weak and $1800 when the economy is strong. The risk-free interest rate is 4%. a. Security C has the same payoffs as which portfolio of the securities A and B in Problem A.1? b. What is the no-ar

> The table here shows the no-arbitrage prices of securities A and B that we calculated. a. What are the payoffs of a portfolio of one share of security A and one share of security B? b. What is the market price of this portfolio? What expected return wi

> The dollar cost of debt for Coval Consulting, a U.S. research firm, is 7.5%. The firm faces a tax rate of 30% on all income, no matter where it is earned. Managers in the firm need to know its yen cost of debt because they are considering launching a new

> Maryland Light, a U.S. light fixtures manufacturer, is considering an investment in Japan. The dollar cost of equity for Maryland Light is 11%. You are in the corporate treasury department, and you need to know the comparable cost of equity in Japanese y

> Assume that in the original Ityesi example in Table 31.1, all sales actually occur in the United States and are projected to be $60 million per year for four years. Keeping the cost of sales, operating expenses, capital expenditures and depreciation expe

> Tailor Johnson, the menswear company with a subsidiary in Ethiopia described in Problem 9, is considering the tax benefits resulting from deferring repatriation of the earnings from the subsidiary. Under U.S. tax law, the U.S. tax liability is not incurr

> Suppose a security with a risk-free cash flow of $150 in one year trades for $140 today. If there are no arbitrage opportunities, what is the current risk-free interest rate?

> Your start-up company has negotiated a contract to provide a database installation for a manufacturing company in Poland. That firm has agreed to pay you $100,000 in three months’ time when the installation will occur. However, it insis

> Suppose Starbucks consumes 100 million pounds of coffee beans per year. As the price of coffee rises, Starbucks expects to pass along 60% of the cost to its customers through higher prices per cup of coffee. To hedge its profits from fluctuations in coff

> Your utility company will need to buy 100,000 barrels of oil in 10 days’ time, and it is worried about fuel costs. Suppose you go long 100 oil futures contracts, each for 1000 barrels of oil, at the current futures price of $60 per barr

> BHP Billiton is the world’s largest mining firm. BHP expects to produce 2 billion pounds of copper next year, with a production cost of $0.90 per pound. a. What will be BHP’s operating profit from copper next year if the price of copper is $1.25, $1.50,

> Your firm faces a 9% chance of a potential loss of $10 million next year. If your firm implements new policies, it can reduce the chance of this loss to 4%, but these new policies have an upfront cost of $100,000. Suppose the beta of the loss is 0, and t

> Your firm imports manufactured goods from China. You are worried that U.S.–China trade negotiations could break down next year, leading to a moratorium on imports. In the event of a moratorium, your firm expects its operating profits to decline substanti

> Genentech’s main facility is located in South San Francisco. Suppose that Genentech would experience a direct loss of $450 million in the event of a major earthquake that disrupted its operations. The chance of such an earthquake is 2% per year, with a b

> Your firm needs to raise $100 million in funds. You can borrow short term at a spread of 1% over LIBOR. Alternatively, you can issue 10-year, fixed-rate bonds at a spread of 2.50% over 10-year Treasuries, which currently yield 7.60%. Current 10-year inte

> The Citrix Fund has invested in a portfolio of government bonds that has a current market value of $44.8 million. The duration of this portfolio of bonds is 13.5 years. The fund has borrowed to purchase these bonds, and the current value of its liabiliti

> You have been hired as a risk manager for Acorn Savings and Loan. Currently, Acorn’s balance sheet is as follows (in millions of dollars): When you analyze the duration of loans, you find that the duration of the auto loans is two yea

> Consider two securities that pay risk-free cash flows over the next two years and that have the current market prices shown here: a. What is the no-arbitrage price of a security that pays cash flows of $100 in one year and $100 in two years? b. What is

> Assume each of the following securities has the same yield-to-maturity: a five-year, zero-coupon bond; a nine-year, zero-coupon bond; a five-year annuity; and a nine-year annuity. Rank these securities from lowest to highest duration.

> Suppose the current exchange rate is $1.80/£, the interest rate in the United States is 5.25%, the interest rate in the United Kingdom is 4%, and the volatility of the $/£ exchange rate is 10%. Use the Black-Scholes formula to determine the price of a si

> The William Companies (WMB) owns and operates natural gas pipelines that deliver 12% of the natural gas consumed in the United States. WMB is concerned that a major hurricane could disrupt its Gulfstream pipeline, which runs 691 miles through the Gulf of

> What are the advantages and disadvantages of increasing the options granted to CEOs?