#1. Impact Evaluation

   In the move to online instruction due to COVID-19, Development University was concerned that its students may not have the technology they needed at home to keep up with their classes. In order to address this issue, at the start of the term, the University offered all students coupons for a 50% price discount on a new iPad. The hope was that the iPad would allow students to participate more fully in their online classes, and therefore allow them to learn more.

    Development University heard that you have learned how to do impact evaluation in your economics classes, so asked you to evaluate how well the iPads worked for their students. In particular, they wanted to know if the iPads caused student grades to improve. In looking at the data, you notice that although all students were offered the coupon, only half of them purchased an iPad through the program. Therefore, you decide to compare the average GPAs of students who purchased an iPad to those who didn't. You find that students who purchased an iPad had an average GPA of 3.4, and students who did not purchase an iPad had an average GPA of 3.1.

1) Explain in words one sentence that clearly describes the context of this study. (The answer should clearly define the treatment and the outcome variable in this study, not just the abstract language of what y0i means in general.)

2) Please explain and describe ?[?1?|??=0] in the context of this study. (The answer should demonstrate a clear understanding of both the treatment and the outcome variable in this study.

Measure the accounting for foreign currency and its translation.

Scenario

CM Corporation (CMC) was founded six years ago by Phil Connor and Eric Martin. The company designs, installs, and services security systems for high-tech companies. The founders, who describe themselves as "entrepreneurial geeks," met in a computer lab when they were teenagers and found they had common interests in working on security systems for critical industries. CMC hired you as a junior accountant this year.

Lately, Connor and Martin have been working with "radio frequency identification" (RFID) technology. They have developed a detailed system designed to track inventory items using RFID tags embedded invisibly in products. This technology has numerous inventory applications in multiple industries.

One of the most basic applications is tracking manufacturing components; if tagged components "go walking" (if employees attempt to take them), companies can easily track and find them. Connor and Martin have sold their system to several high-tech companies in the area. These companies have a number of government contracts that require extensive security systems to protect sensitive data from infiltration by terrorists and others. To date, CMC's cash flow from sales and services has adequately funded its operations.

CMC expects much growth potential for its products. As a result, they are considering going public and expanding internationally in the near future.

Instructions

Connor and Martin are contemplating international business in their industry and feel that global expansion is a great transition for the company. They feel they understand IFRS much better in addition to having a greater technical grasp of GAAP. They have decided to go public and also expand internationally within the next two to three years. With making such bold moves, they are also seriously considering a switch to IFRS as their accounting standards for financial statements. Connor and Martin have requested your assistance in creating a PowerPoint presentation that summarizes information on the impact of foreign currency should the firm expand internationally.

Presentation Mechanics should be as follows:

Prepare a 5-8 slide PowerPoint presentation, including slide notes.

Summarize the impact foreign currency will have on a firm expanding internationally.

Explain the advantages and disadvantages to foreign currency translation of financial statements.

Explain different reasons for the firm to continue with accounting under US GAAP or switching to IFRS standards.

A beverage company target market includes: local organizations, the island university as well as different universities in the Caribbean region, supermarkets, retail companies and different companies in the region through exportation. Jason is seeking to obtain data to introduce a new Malt beverage to the Market. This data will be obtained through the use of a survey distributed to the Local University students. However, he found these students to be non-cooperative at times and wondered whether the data supplied was fudged.

Question. State:

i) Potential Reasons for Non-corporations from students

ii) Potential Reasons why Jason was left to wonder whether the data supplied was fudged

A US company has ordered watches from Switzerland that will require a payment of Swiss francs (CHF) 500,000 in three months. The expected spot prices to prevail in three months range from $1.00 to $1.12. The following information is available:

Spot rate $1.06/CHF
3-month forward rate $1.07/CHF
Interest rate in US5.00%
Interest rate in Switzerland2.00%
Call option premium$0.040E=$1.06
Put Optionpremium$0.045E=$1.06

1. How can the firm hedge using forward rates? Show the payoffs for the expected spot rates.
2. How can the firm hedge using money market rates? Show the payoffs for the expected spot rates.
3. How can the firm hedge using options. Show the payoffs for the expected spot rates.

Which hedging would you recommend

Shanghai Company sells electronic equipment that it acquires from the US. During the year 2014, the inventory records reflected the following:

At the end of 2014, 45 units are still on hand at the end of year 2014. Shanghai sell its electronic equipment at a fixed price of $100 each. Required:

1. Determine the cost of goods sold and the cost of ending inventory assuming the company uses FIFO.

2. Determine the amount of gross profit that would be reported for the year.

3. Given the price trend shown above, which valuation method (FIFO, LIFO, or Weighted Average) will result in the lowest gross profit?

4. Given the price trend shown above, which valuation method (FIFO, LIFO, or Weighted Average) will result in a better matching of Revenues & Cost of goods sold? Explain.

Ivanna, who has three children under age 13, worked full-time while her husband, Sergio, was attending college for nine months during the year. Ivanna earned $40,275 and incurred $8,175 of child care expenses. Click here to access the percentage chart to us for this problem. The amount of Ivanna and Sergio's credit for child and dependent care expenses is $

Computing the Child and Dependent Care Credit

3. Top, a US Company, has a 100% owned subsidiary in Japan. The functional currency for the subsidiary is the Japanese yen. The subsidiary purchases merchandise on credit from a German company, with payment due in US dollars. Between the date of sale and the due date of the payable, the yen strengthens against the US dollar. What will be the result to Top.

a.   there will be a foreign exchange gain

2. there will be a foreign exchange loss
3. there will be no foreign exchange gain or loss
4. there will be both a foreign exchange gain and loss
5. there will be a bad debt expense to the German company

4. Face Co. uses the US dollar as its functional currency in Country X. At December 31, 2015 Face’s subsidiary has a net asset position in Country X of euro 100,000. Which correctly describes the action that Face will take on December 31, 2015 to hedge its euro exposure ?

1. Face will enter into a spot contract to purchase euros and sell US dollars
2. Face will enter into a spot contract to purchase US dollars and sell euros
3. Face will enter into a forward contract to purchase euros and sell US dollars
4. Face will enter into a forward contract to purchase US dollars and sell euros
5. Face will purchase an FX option contract giving it the right but not the obligation to purchase euros and sell US dollars

5. At the close of business on December 31, 2015 Booker Corp pays a $30,000 premium to purchase a foreign currency option giving Booker the right but not the obligation to purchase 100,000 euros and sell $140,000 US dollars in six months as a hedge of a future euro rental obligation.

What is reported on the balance sheet at December 31, 2015 (in US dollars)

1. asset of $0
2. asset of $30,000
3. asset of $130,000
4. asset of $140,000
5. asset of $170,000

An insurance company offers four different deductible levels—none, low, medium, and high—for its homeowner's policyholders and three different levels—low, medium, and high—for its automobile policyholders. The accompanying table gives proportions for the various categories of policyholders who have both types of insurance. For example, the proportion of individuals with both low homeowner's deductible and low auto deductible is 0.08 (8% of all such individuals).

Homeowner's Auto

N L M H

L 0.04 0.08 0.05 0.02

M 0.07 0.09 0.20 0.10

H 0.02 0.03 0.15 0.15

Suppose an individual having both types of policies is randomly selected. (a) What is the probability that the individual has a medium auto deductible and a high homeowner's deductible?

(b) What is the probability that the individual has a low auto deductible? A low homeowner's deductible? auto deductible homeowner's deductible

(c) What is the probability that the individual is in the same category for both auto and homeowner's deductibles?

(d) Based on your answer in part (c), what is the probability that the two categories are different?

(e) What is the probability that the individual has at least one low deductible level?

(f) Using the answer in part (e), what is the probability that neither deductible level is low?

Exercise 9.2: Who is responsible for your career?

Who is responsible for developing a person’s career? According to a recent survey, there is disagreement about whether it should be the responsibility of an individual or an employer.

“The Real Story Behind Career Development: Who is Responsible?” is a joint research study conducted by EdAssist and the University of Phoenix to explore employees’ and managers’ perceptions of whose responsibility it is to drive career development. The results showed key disparities between the two groups’ perceptions:

• Most workers believe it is employers’ responsibility to teach career development: 74% say employers should provide professional-development training, 71% say they should identify job opportunities and career paths, and 68% say they should provide career- advancement mentoring.

• Most managers believe employees must take responsibility for their career development: 98% say workers should continually update and improve their skills, 85% say they should identify job opportunities and career paths, and 80% say they should be responsible for building their job-hunting and career-planning skills.

  The results of this study demonstrate why many workers and organizations fail at career management – each believes the other should be responsible. “Managers and employees often point the finger at each other when it comes to taking responsibility for poor career development planning,” says Jay Titus, Senior Director of Academic Services at EdAssist, a leading provider of tuition assistance management programs. “There needs to be morehonest conversation between the two sides about what the end goal should be, as well as what learning tools are available within the organization to get there.”

  (adapted from Quast, L. 2014. Who's in charge of career planning? You. Forbes.com accessed on 22-September 2019).

  Questions

• Do you believe such disagreement exits ?

• What is your experience with companies’ career management?

For 2016, Foreign company (FC) had $150 of effectively connected E&P (ECEP) and its US net equity decreased from $1600 at the beginning of the year to $1500 at the end. For 2017, FC had $225 of ECEP and its US net equity decreases by $300 from $1600 at the beginning of the year to $1300 at the end. What is FC's DEA amount for 2018 and its branch profits tax, if any, for 2018?