g (A) list an example of an automatic stabilizer (B) list an example of discretionary fiscal policy that might be implemented during a recession (C) What is the main difference between these two types of policies

Kinkead inc. forecasts that its free cash flow in the coming year, i. e., at t = 1, will be −$10 million, but its fcf at t = 2 will be $20 million. after year 2, fcf is expected to grow at a constant rate of 4% forever. if the weighted average cost of capital is 14%, what is the firm's value of operations, in millions?

The management of a supermarket wants to adopt a new promotional policy of giving a free gift to every customer who spends > a certain amount per visit at this supermarket. the expectation of the management is that after this promotional policy is advertised, the expenditures for all customers at this supermarket will be normally distributed with a mean of $95 and a standard deviation of $20. if the management wants to give free gifts to at most 10% of the customers, what should the amount be above which a customer would receive a free gift?

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.