In this question we will consider the effect of collusion between bidders in a secondprice, sealed-bid auction. there is one seller who will sell one object using a secondprice sealed-bid auction. the bidders have independent, private values drawn from a distribution on [0, 1]. if a bidder with value v gets the object at price p, his payoff is v−p; if a bidder does not get the object his payoff is 0. we will consider the possibility of collusion between two bidders who know each others’ value for the object. suppose that the objective of these two colluding bidders is to choose their two bids as to maximize the sum of their payoffs. the bidders can submit any bids they like as long as the bids are in [0, 1].(a) let’s first consider the case in which there are only two bidders. what two bids should they submit? explain.(b) now suppose that there is a third bidder who is not part of the collusion. does the existence of this bidder change the optimal bids for the two bidders who are colluding? explain.

In the fall of 2008, aig, the largest insurance company in the world at the time, was at risk of defaulting due to the severity of the global financial crisis. as a result, the u.s. government stepped in to support aig with large capital injections and an ownership stake. how would this affect, if at all, the yield and risk premium on aig corporate debt?

The gilbert instrument corporation is considering replacing the wood steamer it currently uses to shape guitar sides. the steamer has 6 years of remaining life. if kept,the steamer will have depreciaiton expenses of $650 for five years and $325 for the sixthyear. its current book value is $3,575, and it can be sold on an internet auction site for$4,150 at this time. if the old steamer is not replaced, it can be sold for $800 at the endof its useful life. gilbert is considering purchasing the side steamer 3000, a higher-end steamer, whichcosts $12,000 and has an estimated useful life of 6 years with an estimated salvage value of$1,500. this steamer falls into the macrs 5-year class, so the applicable depreciationrates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. the new steamer is fasterand allows for an output expansion, so sales would rise by $2,000 per year; the newmachine's much greater efficiency would reduce operating expenses by $1,900 per year.to support the greater sales, the new machine would require that inventories increase by$2,900, but accounts payable would simultaneously increase by $700. gilbert's marginalfederal-plus-state tax rate is 40%, and its wacc is 15%.a. should it replace the old steamer? b. npv of replace = $2,083.51

Which of the following entries would be made to record the requisition of $12,000 of direct materials and $6,900 of indirect materials? (assume that indirect materials are included in raw materials inventory.) a. manufacturing overhead 18,900 raw materials inventory 18,900 b. wip inventory 12,000 manufacturing overhead 6,900 raw materials inventory 18,900 c. raw materials inventory 18,900 wip inventory 18,900 d. wip inventory 18,900 raw materials inventory 18,900