You inherited your uncle's bakery in a rem family, but you prefer to keep your job and hired a local manager. The profits of the bakery depend on the economy and on the manager's effort, according to the following table: Good economy Bad economy No effort $22,000 $7,000 High effort $32,000 $17,000 The good and bad economies have equal probabilities. When the manager makes no effort, he is running his own side business that is generating $1,500. Which of the following incentives avoids the principal-agent problem? O A. 7% of the profit O B. A fixed salary of $3,000 O C. None of the listed options. O D. 14% of the profit

James has been working as a Mechanical Engineer ever since he graduated five years ago. Two years ago, he bought and financed a new $25,000 Jeep Compass and still owes $15,750 on his car loan. He has never been late with a car payment. James has one major credit card, with a $1,000 limit. He has had it since his senior year of college and was two months late with a payment one time during that first year. He is currently carrying a balance of $600 on this card. In the last year, James applied for six store credit cards at places that he shops a lot so that he can earn points and get discounts. He carries no balances Part 1: Calculate James’ credit score. Recalculate his credit score if he had not opened the six store credit cards.   Part 2: James is tired of paying rent and would like to purchase a condo so that he can start building equity in his home. He is looking for a 30-year mortgage to purchase a $240,000 condo. What interest rate does James qualify for on a mortgage with his…

Diane initially deposited $11,000 into a money market account and made no additional deposits or withdrawals. When she closed the account in exactly one year, its value had grown to $11,125. Calculate the annual growth rate for the money market account. Round your answer to two places after the decimal. %

Susan has a choice between two perpetuities payable at the beginning of every month. The first pays $100 today and increases by 1% every month. The second pays $100 today and increases by $X every month. These two annuities are equally valuable at i= 20%. Find X.