Fatima has a credit card account with Bank Muscat (BM). The bank is considering whether to raise Fatima’s credit card interest rate. She can respond by moving to National Bank of Oman (NBO) or do nothing. If BM raises Fatima’s interest rate and she does nothing, then BM increases profit by 150 OMR while Fatima receives -150 OMR. If BM raises Fatima’s interest rate and Fatima transfers her account to NBO, then BM receives -100 and she receives 75 OMR. If BM does nothing and she does nothing, then both gets 0 OMR. If BM does nothing and Fatima transfer her account to NBO then BM receives -100 while Fatima receives -40 OMR 1)Draw the game with the help of a tree chart.

Fatima has a credit card account with Bank Muscat (BM). The bank is considering whether to raise Fatima’s credit card interest rate. She can respond by moving to National Bank of Oman (NBO) or do nothing. If BM raises Fatima’s interest rate and she does nothing, then BM increases profit by 150 OMR while Fatima receives -150 OMR. If BM raises Fatima’s interest rate and Fatima transfers her account to NBO, then BM receives -100 and she receives 75 OMR. If BM does nothing and she does nothing, then both gets 0 OMR. If BM does nothing and Fatima transfer her account to NBO then BM receives -100 while Fatima receives -40 OMR 1)Draw the game with the help of a tree chart.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.6P

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Fatima has a credit card account with Bank Muscat (BM). The bank is considering whether to raise Fatima’s credit card interest rate. She can respond by moving to National Bank of Oman (NBO) or do nothing. If BM raises Fatima’s interest rate and she does nothing, then BM increases profit by 150 OMR while Fatima receives -150 OMR. If BM raises Fatima’s interest rate and Fatima transfers her account to NBO, then BM receives -100 and she receives 75 OMR. If BM does nothing and she does nothing, then both gets 0 OMR. If BM does nothing and Fatima transfer her account to NBO then BM receives -100 while Fatima receives -40 OMR What is the best strategy if you are helping Fatima with her decision?
The Fly-by-Night finance company advertises a "bargain 6% plan" for financing the purchase of automobiles. To the amount of the loan being financed, 6% is added for each year money is owed. This total is then divided by the number of months over which the payments are to be made, and the result is the amount of the monthly payments. For example, a woman purchases a $10,000 automobile under this plan and makes an initial cash payment of $2,500. She wishes to pay the $7,500 balance in 24 monthly payments: Find the IRR and Effective Annual Interest rate. Purchase price -Initial payment = Balance due, (Po) +6% finance charge = 0.06 × 2 years × $7,500 = Total to be paid .. Monthly payments (A) = $8,400/24 = $10,000 2,500 7,500 900 8,400 $350
Give typed solution only You are deciding whether to buy a car for $22,000 or to accept a lease agreement. The lease entails a $800 fee plus monthly payments of $260 for 48 months. Under the lease agreement, you are responsible for service on the car and insurance. At the end of the lease, you may purchase the car for $9000. Does the total cost of purchasing the car at the end of the lease agreement exceed the cost of purchasing the car at the outset? A.Yes, the total cost of the car at the end of the lease is B.No, the total cost of the car at the end of the lease is
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Many retirement funds charge an administrative fee equal to 0.25% on managed assets. Suppose that Alex and Spenser each invest $50,000 in the same year. Alex invests in a no-load fund (that doesn’t charge the 0.25% fee) and earns 5% a year. Spenser uses another retirement fund that charges the 0.25% fee and so only earns 4.75%. After 30 years, how much more will Alex have than Spenser?
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John was a troubled teen and got arrested several times and even spent some time in a juvenile detention center. John is now 22 years old and briefly attended Highline College but dropped out and has no job. John’s grandmother is very concerned, so she promised John that if he got a steady job, did not break the law again, and if he went back to Highline College if he could be re-admitted, she would pay John $50,000. John loved his grandmother and he promised to do all of that for her. Discuss whether these various promises on John’s part would constitute valid consideration for the payment of the $50,000. Please fully explain your answer for all the points.
Draw the cash flow diagram with your solution.In a certain department store, the monthly salary of a saleslady is partly constant and partly varies with her sales for the month. When the value of her sales for the month is P10,000, her salary for the month is P900. When her salary for the month goes up to P12,000, her monthly salary becomes P1,000. What must be the value of her sales for the month so that her salary for the month will be P2,000?
After graduation, you face a choice. One option is to work for a multinational consulting firm and earn a starting salary (benefits included) of $40,000. The other option is to use $7,000 in savings to start your own consulting firm. You could earn an interest return of 7 percent on your savings. You choose to start your own consulting firm. At the end of the first year, you add up all of your expenses and revenues. Your total includes $10,000 in rent, $1,000 in office supplies, $24,000 for office staff, and $3,500 in telephone expenses. Explicit costs include all costs for which direct payments are made Rent ($10,000), office supplies ($1,000), staff salaries ($24,000), and telephone ($3,500) = $ Implicit costs include opportunity costs: foregone wages ($40,000), and foregone interest payments ($7,000x7%) = $ Suppose, that you have now operated your consulting firm for a year. At the end of the first year, your total revenues are $78,000 Your accounting profit is $ Your economic…