3) What is the most she can consume in her Old Age if there is no bank in the economy (i.e. she cannot lend or borrow)? 4. (10%) The Pineapple Co. has spent $100 million, a big sunk cost, in research and development, and has successfully invented a new electronic device. It is thinking of building a plant to produce this new device. The plant and equipment will cost $10 million. It will last for ten years and will have no salvage value at the end of that time. The land the plant will be built on could be rented out for $600,000 per year before taxes for the ten years while the plant is in production. The costs of running the plant are expected to be $5 million per year. The total working capital required to allow inventories to be nanced during the rst year of production is $150,000. And will remain unchanged from the second year to the ninth year, and in the tenth year, the plant will stop production, and the working capital requirement will drop to zero. \"Then the plant ceases production all the working capital can be recovered. The revenues from selling the devices are expected to be $13.5 million per year. All cash ows occur at the end of the year. The company uses straight line depreciation. Its corporate tax rate is 35 percent and the opportunity cost of capital for this project is 10 percent. Should Pineapple Co. build the plant? 5. (12%) Read the two news reports about China's Star market in Appendix 1 and Appendix 2. This Chinese equivalent of NASDAQ seemed to fade after initial success. It was also claimed that listed company quality is a crucial issue. Please analyze how Star market made various regulatory changes in an attempt to improve listed company quality and market trading quality, and what are the possible reasons for the lack of success of these regulatory changes. (Hint: You may nd relevant arguments from the reading materials in the appendix) 6. (10%) American Factor); is a gritty documentary produced by Barack and Michelle Obama's Higher Ground Productions, as part of a partnership deal with Netix. At the start of the lm, a large General Motors automobile manufacturing plant, in Dayton, Ohio, has closed its operations. It is worth noting that the closure took place in 2008, at the beginning of the Great Recession. Over 10,000 local jobs were lost, leaving over 2,000 families unemployed. As other factories closed, it was nearly impossible to nd jobs or employment at the compensation they had previously earned. The locals struggled to nd their way back to the middle class. Six years later, Chinese investor Cao Dewangreverentially referred to as the \"chairman\" purchased the shuttered automobile factory and retrotted it as an American outpost for his Fuyao Glass auto-glass manufacturing empire
