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Volkswagen and Its Project to Cheat Emissions Tests
This case is based on a current and very timely series of events, relating to the decision by Volkswagen and other car manufacturers to willingly cheat diesel emissions tests by installing a software device that detects the difference between shop testing and actual driving on the roads. Volkswagen actually created a project team of engineers to design this cheat device, in spite of the second-thoughts and objections of several engineers who worked on the software device. Once the evidence for this deception began to be made public, Volkswagen executives engaged in systematic efforts to silence their own engineers, destroy documents, and cover up the fact that they had sanctioned this project in the first place. Since Volkswagen was charged with this deception, other automakers have also been accused and admitted to similar behaviors.
Question 1. How do you think Volkswagen executives could justify this behavior? How do you think the actions of the Japanese automakers influenced VW's decision-making? (250-500 words)
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
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Term Structure of Interest Rates
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Create a cost-benefit analysis to evaluate the project
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Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.
Simple Interest, Compound interest, discount rate, force of interest, AV, PV
CAPM and Venture Capital
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