This year the factory________ almost twice as many motors as it did last year．A．t

A.last year's performance

B.competitors' outcomes

C.desired standards

D.last month's efforts

E.management opinion

Extracts from the recent financial statements of Bold Co are given below.

A factor has offered to manage the trade receivables of Bold Co in a servicing and factor-financing agreement. The factor expects to reduce the average trade receivables period of Bold Co from its current level to 35 days; to reduce bad debts from 0·9% of turnover to 0·6% of turnover; and to save Bold Co $40,000 per year in administration costs. The factor would also make an advance to Bold Co of 80% of the revised book value of trade receivables. The interest rate on the advance would be 2% higher than the 7% that Bold Co currently pays on its overdraft. The factor would charge a fee of 0·75% of turnover on a with-recourse basis, or a fee of 1·25% of turnover on a non-recourse basis. Assume that there are 365 working days in each year and that all sales and supplies are on credit.

Required:

(a) Explain the meaning of the term ‘cash operating cycle’ and discuss the relationship between the cash operating cycle and the level of investment in working capital. Your answer should include a discussion of relevant working capital policy and the nature of business operations. (7 marks)

(b) Calculate the cash operating cycle of Bold Co. (Ignore the factor’s offer in this part of the question). (4 marks)

(c) Calculate the value of the factor’s offer:

(i) on a with-recourse basis;

(ii) on a non-recourse basis. (7 marks)

(d) Comment on the financial acceptability of the factor’s offer and discuss the possible benefits to Bold Co of factoring its trade receivables. (7 marks)

million. For financial reporting purposes, the firm will depreciate the equipment over a 7-year life using straight-line depreciation and a zero salvage value; for tax reporting purposes, however, the firm will use 3-year accelerated depreciation. Given a tax rate of 35% and a first-year accelerated depreciation factor of 0.333, by how much will the company’s deferred tax liability increase in the first year of the equipment’s life？

A.$931,700.

B.$1,064,800.

C.$1,730,300.

A.A time horizon of 10 trading days

B.A 99% confidence level

C.One year of historical observations, which are updated semiannually

D.The market risk charge will be set at the higher of the previous day’s VAR, or the average VAR over the last 60 days scaled by a multiplicative factor

在索洛维亚这个经济中，资本所有者得到了的国民收入，而工人得到了的国民收入。

a．索洛维亚的男人留在家里从事家务劳动，而妇女在工厂干活。如果一些男人开始走出家门去工作，以至劳动力增加了5%，这个经济可衡量的产出会发生什么变动？劳动生产率——定义为每个工人的产出——是提高了，下降了，还是保持不变？全要素增长率提高了，下降了。还是保持不变？

b．在第1年，资本存量为6，劳动投入为3，产出为12。在第2年，资本存量为7，劳动投入为4，产出为14。在这两年之间，全要素生产率发生了什么变动？

In the economy of Solovia, the owners of capital get two-thirds of national income, and the workers receive one-third.

a．The men of Solovia stay at home performing household chores, while the women work in factories. If some of the men started working outside the home so that the labor force increased by 5 percent, what would happen to the measured output of the economy？ Does labor productivity-defined as output per worker-increase, decrease, or stay the same？ Does total factor productivity increase, decrease, or stay the same？

b．In year 1, the capital stock was 6, the labor input was 3, and output was 12. In year 2, the capital stock was 7, the labor input was 4, and output was 14. What happened to total factor productivity between the two years？

by the University of Michigan School of Public Health revealed particulars that seem to hold true for the general population. Infants are the most cold-ridden group, averaging more than six colds in their first year. Boys have more colds than girls up to age three. After the age of three, girls are more susceptible than boys, and teenage girls average three colds a year to boys' two.

The general incidence of colds continues to decline into maturity. Elderly people who are in good health have as few as one or two colds annually. One exception is found among people in their twenties, especially women, who show a rise in cold infections, because people in this age group are most likely to have young children. Adults who delay having children until their thirties and forties experience the same sudden increase in cold infections.

The study also found that economics plays an important role. As income increases, the frequency at which colds are reported in the family decreases. Families with the lowest income suffer about a third more colds than families at the upper end. Lower income generally forces people to live in more cramped quarters than those typically occupied by wealthier people, and crowding increases the opportunities for the cold virus to travel from person to person. Low income may also adversely influence diet. The degree to which poor nutrition affects susceptibility to colds is not yet clearly established, but an inadequate diet is suspected of lowering resistance generally.

The paragraph before this passage most probably deals with ______ .

A．minor diseases other than colds

B．the recommended treatment of colds

C．a factor that affects susceptibility to colds

D．methods of preventing colds among elderly people

Tess Mulroney, a veteran options investor, wishes to do some speculating and hedging with options, but isn’t sure the derivatives currently available are attractively priced. Before making any transactions, Mulroney puts her calculator to work to determine a fair price for the options.

First, Mulroney seeks to protect a large variable-rate investment. She has loaned $40 million to her nephew’s construction company. The loan is payable in one year, and the current interest rate is 7.6 percent. Based on data provided by her brokerage house, Mulroney believes interest rates will fall sharply over the next year, with a 70 percent chance of a decline to 5.9 percent and a 30 percent chance of a decline to 4.7 percent.

To protect her cash flows, Mulroney is considering the purchase of a 6.2 percent floor. Mulroney knows a banker who writes such options, but she must come to him with a price in mind.

Next on Mulroney’s list is call options on Merrill Materials stock. She has obtained the followingassumptions through a subscription options service:

The stock trades for $35 per share.

The chance of an upward movement over the next year is 60 percent.

The likely downward movement is 20 percent.

At-the-money calls currently sell for $4.75.

Despite her experience, Mulroney knows she always has more to learn. So she then reviews some technical material on options that she found on the Internet. Mulroney spends the next hour reading up on sensitivity factors related to option pricing.

Later that day, Mulroney meets with Ben Glanda, her financial adviser. He has prepared some investment recommendations and advice for Mulroney.

His first suggestion addresses a series of investments Mulroney was considering. She had proposed buying a stock, buying a European put option on the stock, and writing a call option. Glanda has proposed an alternative investment that will be simpler to make.

Next Glanda attempts to convince Mulroney to start using an alternate method for valuing her options. Glanda suggests using the Black-Scholes-Merton model because of its precision and ability to consider more factors, but Mulroney prefers the binomial model because it requires fewer assumptions.

Mulroney doesn’t like the Black-Scholes Merton model for the following reasons:

It does not work for American options.

It does not consider volatility of interest rates.

It does not reflect the compounding of returns.

It does not work for assets that generate cash flows.

Part 3)

During the course of her review, Mulroney reads about a factor related to interest rates. The variable is negative for put options. Mulroney is reading about:

A) rho.

B) gamma.

C) vega.

D) theta.

they restrain their births. However, there has hardly been a year since 1957 in which birth rates have not fallen in the United States and other rich countries, and in 1976 the fall was especially sharp. Both former East Germany and former West Germany have fewer births than they have deaths, and the United States is only temporarily able to avoid this condition because the children of the baby boom are now an exceptionally large group of married couples.

It is true that Americans do not typically plan their births to set an example for developing nations. We are more affected by women's liberation: once women see interesting and well-paid jobs and careers available, they are less willing to provide free labor for child raising. From costing nothing, children suddenly come to seem impossibly expensive. And to the high cost of children are added the uncertainties introduced by divorce, couples are increasingly unwilling to subject children to the terrible experience of marital breakdown and themselves to the difficulty of raising a child alone.

These circumstances—women working outside the home and the instability of marriage—tend to spread with industrial society and they will affect more and more countries during the remainder of this century. Along with them goes social mobility, ambition to rise in the urban world, a main factor in bringing down the births in Europe in the nineteenth century.

Food shortage will happen again when the reserves resulting from the good harvests of 1976 and 1977 have been consumed. Urbanization is likely to continue with the cities of the developing nations struggling under the weight of twice their present populations by the year 2000. The presently rich countries are approaching a stable population largely because of the changed place of women？ and they incidentally are setting an example of restraint to the rest of the world. Industrial society will spread to the poor countries and aspirations will exceed resources. All this leads to a population in the twenty-first century that is smaller than was feared a few years ago. For those anxious to see world population brought under control the news is encouraging.

During the years from 1957 to 1976, the birth rate of the United States ______.

A．increased

B．experienced both falls and rises

C．was reduced

D．remained stable

The University as Business

A number of colleges and universities have announced steep

tuition increases for next year much steeper than the current,

very low, rate of inflation. They say the increases are needed because

of a loss in value of university endowments' heavily investing in common 1

stock. I am skeptical. A business firm chooses the price that maximizes

its net revenues, irrespective fluctuations in income; and increasingly the 2

outlook of universities in the United States is indistinguishable from those of 3

business firms. The rise in tuitions mayreflect the fact economic uncertainty 4

increases the demand for education. The biggest cost of being

in the school is foregoing income from a job (this isprimarily a factor in 5

graduate and professional-school tuition); the poor one' s job prospects, 6

the more sense it makes to reallocate time from the job market to education,

in order to make oneself more marketable. The ways which universities make themselves attractive to students 7

include soft majors, student evaluations of teachers, giving students

a governance role, and eliminate required courses. 8

Sky-high tuitions have caused universities to regard their students as

customers. Just as business firms sometimes collude to shorten the 9

rigors of competition, universities collude to minimize the cost to them of the

athletes whom they recruit in order to stimulate alumni donations, so the best

athletes now often bypass higher education in order to obtain salaries earlier

from professional teams. And until they were stopped by the antitrust authorities,

the Ivy League schools colluded to limit competition for the best students, by

agreeing not to award scholarships on the basis of merit rather than purely

of need-just like business firms agreeing not to give discounts on their best 10

customer.

the economy lies exhausted on the floor, still trying to struggle to its feet. According to the National Association of Realtors, the national median existing-home price ended the year at $164,000, up 7.1 percent from 2001. That's the strongest annual increase since 1980.

Although residential real estate activity makes up less than 8% of total U.S. GDP, a housing market like this one can make the difference between positive and negative growth. Most significantly, consumer spending is 66% of GDP, and the purchase of a new home tends to have an "umbrella effect" on the homeowner's spending as he has to stock it with a washer/ dryer, a new big-screen TV, and maybe a swing set for the yard.

The main factor in housing's continued strength is a classic economic example of zero-sum boom: the persistent weakness everywhere else. As the 2003 recovery continues to be more forecast than reality. Falling stock prices raised investor appeal for U.S. Treasury Bonds, which in turn, allowed most interest rates to drift even lower. But there are not many signs that there's a bubble ready to burst.

December's new record in housing starts, for example, was nicely matched by the new record in new home sales. If you build it, they will buy and even if an economic pickup starts to reduce housing's relative attractiveness, there's no reason why modest economic growth and improved consumer mood can't help sustaining housing's strength. "The momentum gained from low mortgage interest rates will carry strong home sales into 2003, with an improving economy offsetting modestly higher mortgage interest rates as the year progresses", said David Lereah, chief economist at the National Association of Realtors.

Just as housing has taken up much of the economic slack for the past two years, both as a comforting investment for fretting consumers and a driver of consumer spending itself, a big bump elsewhere in the economy in 2003 could be housing's downfall. If stocks roar back this spring, capital inflows could steal from the bond market, pushing up long-term interest rates. Or Alan Greenspan and the Fed could do the same to short-term rates, as a way to hit the brakes on a recovery that is heating up too fast. In other words, if everything possible goes wrong for housing, homeowners should have plenty to compensate them in terms of job security and income hikes.

The author draws a sharp contrast between the housing market and the rest of the economy so as to show

A．the boom of real estate activity.

B．the statistics on home prices.

C．the role of housing market.

D．the degree of consumer spirits.

as established that everyone has over a thousand dreams a year, however few of these nocturnal (夜间发生的) productions are remembered on waking. Even the most confirmed "non-dreamers" will remember dreams if woken up systematically during the rapid eye movement (REM) periods.

These are periods of light sleep during which the eyeballs move rapidly .back and forth under the closed lids and the brain becomes highly activated, which happens three or four times every night of normal sleep.

It is a very interesting question why some people remember dreams regularly while others remember hardly any at all under normal conditions. In considering this, it is important to bear in mind that the dream tends to be an elusive phenomenon for all of us. We normally never recall a dream unless we awaken directly from it, and even then it has a tendency to fade quickly into oblivion.

Given this general elusiveness of dreams, the basic factor that seems to determine whether a person remembers them or not is the same as that which determines all other memory, namely degree of interest. Dream researchers have made a broad classification of people into "recallers"—those who re member at least one dream a month—and "non-recallers", who remember fewer than this. Tests have shown that cool analytical people with a very rational approach to their feelings tend to recall fewer dreams than those whose attitude to life is open and flexible. It is not surprising to discover that in Western society, women normally recall more dreams than men, since women are traditionally allowed an instinctive, feeling approach to life.

In modern urban-industrial culture, feeling and dreams tend to be treated as frivolities (无聊事) which must be firmly subordinated to the realities of life. We pay lip-service to the inner life of imagination as it expresses itself in the arts, but in practice relegate (置于次要地位) music, poetry, drama and painting to the level of spare-time activities, valued mainly for the extent to which they refresh us for a return to work.

Many people are unaware that they dream because ______.

A．their dreams fade very quickly

B．they do not recall their dreams

C．they sleep too heavily

D．they wake up frequently