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stepladder [879]
3 years ago
11

In a duopoly game we observe the following payouts: if the two firms collude they will each earn $50,000. If one firm cheats the

n he earns $60,000 and the other firm earns -$10,000. If both firms cheat then they each earn zero economic profit. In this game what is the Nash equilibrium?
Business
1 answer:
OLEGan [10]3 years ago
7 0

Answer:

the Nash equilibrium for both players is to collude

Explanation:

A duopoly is when there are two firms operating in an industry.

Game theory looks at the interactions between participants in a competitive game and calculates the best choice for the player.

Dominant strategy is the best option for a player regardless of what the other player is playing.

Nash equilibrium is the best outcome for players where no player has an incentive to change their decisions.

 the Nash equilibrium for both players is to collude because it is the best outcome for both players. if, a player cheats, there is a chance that the other player would cheat and both firms would end up earning a zero economic profit

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You are considering an investment in fields and struthers, Inc, and want to evaluate the firm's free cash flow From the income s
kirill [66]

Answer:

A.) $81,100,000

B.) $64,000,000

C.) $17,100,000

Explanation:

EBIT = $90 million

Tax rate = 21%

Depreciation = $10 million

gross fixed assets increased by $56 million

current assets increased by $44 million

current liabilities increased by $36 million

A.) Operating Cash flow for 2021

EBIT + Depreciation - (EBIT × Tax rate)

$90, 000,000 + 10,000,000 - (90,000,000×0.21)

100,000,000 - (18,900,000) = $81,100,000

B.) Investment in Operating capital for 2021:

Increase in gross fixed asset + (increase in current asset - increase in liability)

$56,000,000 + ( $44,000,000-$36,000,000)

= $56,000,000 + $8,000,000

= $64,000,000

C.) Free cash flow

Operating Cash flow - investment in operating

$81,100,100 - $64,000,000 = $17,100,000

3 0
2 years ago
It is estimated that a first time dui costs roughly ______ once all potential costs are factored in.
Kamila [148]
The estimated cost of first time DUI roughly around $1,000 dollars once the potential cost are factored in. The potential cost of a contract is the sum of all the estimated and actual cost of all the fees and reimbursable expenses associated with contact.
4 0
3 years ago
Explain why a $ 50,000 increase in inventory during the year must be included in developing cash flows from operating activities
Simora [160]

Explain why a $50,000 increase in inventory during the year must be included in computing cash flows from operating activities under both the direct and indirect methods. The $50,000 increase in inventory must be used in the statement of cash flow calculations because it increases the outflow of cash (all else equal).

An increase in the company's inventory indicates that the company has purchased more goods than it has sold. It means an additional cash outflow as cash must be used to purchase additional consumables. Cash outflows have a negative or unfavorable impact on a company's cash position.

Therefore, as inventories increase, the company will have to spend money to buy them (cash outflow). On the other hand, the decrease in inventory will be cash in for the amount sold. We arrive at the following rule: Inventory Increase => Cash Outflow (Negative)

An indirect way to create a cash flow statement is the change in the amount of cash due to operating activities in the account on the balance sheet. and adjust the net profit for the year.

Learn more about inventory here;

brainly.com/question/24868116

#SPJ4

5 0
2 years ago
Assume the real rate of return is 3.37% and the inflation rate is 1.47%. Find the nominal rate of return using the exact formula
Citrus2011 [14]

Answer:

4.89%

Explanation:

Real rate of return = 3.37%

Inflation rate = 1.47%

The nominal rate of return is computed as shown below:

= [ (1 + real rate of return) x (1 + inflation rate) ] - 1

= [ (1 + 0.0337) x (1 + 0.0147) ] - 1

= (1.0337 * 1.0147) - 1

= 1.04889539 - 1

= 0.04889539

= 4.889539%

= 4.89% approx.

7 0
3 years ago
You manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 29%. The T-bill rate is 8%. Your
Anastasy [175]

Answer:

13.85% and 18.9%

Explanation:

As in this exercise we have a free risk asset we will assume that the t-bill has a standard deviation of 0%, so let´s firts calculate the expected return:

E(r)=r_{1}*w_{1} +r_{2}*w_{2} +....+r_{n}*w_{n}

where E(r) is the expected return, r_{i} is the return of the i asset and w_{i} is the investment in i asset, so applying to this particular case we have:

E(r)=17\%*65\%+8\%*35\%

E(r)=13.85\%

the calculation of standar deviation follows the same logic of the previous formula:

Sigma(r)=29\%*65\%+0\%*35\%

Sigma(r)=18.9\%

4 0
3 years ago
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