Look at the financial press (any reputable news source) to see the impact of news on firm value. A company's decisions, remember, matter to many stakeholders, including shareholders. What are some companies that made decisions that lead to a positive or negative change in shareholder value? Why should the maximization of shareholder wealth be seen as the primary goal of the firm?
In: Economics
A machine shop owner is attempting to decide whether
to purchase a new drill press, a lathe, or a grinder. The
profit or loss from each purchase are shown in the following table
where one of two states of nature could occur (the company succeeds
in getting a military contract, or it does not get a
contract).
Contract status
Purchase
Get Contract
No contract
Drill press
40000
-8000
Lathe
25000
4000
Grinder
12000
10,000
a-for each purchase decision show the numbers you use
when using an optimistic method of choosing which one item to
purchase and indicate which item is purchased by this
method.
b-for each purchase decision show the numbers you use
when using a conservative method of choosing which one item to
purchase and indicate which item is purchased by this
method.
c-show the numbers you use in a new table using the
minimax regret method of choosing which one item to purchase and
indicate which item is purchased by this method.
d-What is the expected monetary value of each purchase
option when the probability of getting contract is .4 and which is
the best option under this probability?
e-Since .4 may be incorrect as the probability of
getting a military contract, over what range of values for the
probability of getting a contract would each purchase option be the
most favored? Show your work!
In: Statistics and Probability
Lee and Martin compete in an arcade game where the two have to
press a button as soon as an alarm sound is triggered. Who presses
the button first wins. Suppose the response times of Lee and Martin,
X1 and X2, are independent random variables where Xi is
exponentially distributed with rate λi.
a) What is the distribution of the time between the alarm sound and
the first response?
b) What is the probability that the time until the first response exceeds T?
c) Suppose the game is played for n rounds and the response times of Lee and Martin are independent and identically distributed across different games. What is the variance of the number of rounds in which the response time exceeds T?
In: Statistics and Probability
Suppose a company issues a press release announcing a new line of business that has a positive NPV of $30 per share of stock outstanding. In an efficient market, what will happen to the stock price at the time of the announcement? What will happen to the stock price in the days following the announcement assuming no new news becomes available about the company? Explain your responses.
In: Finance
An embossing press in which a single-acting cylinder is used for ejecting the processed parts, with the help of circuit diagrams, describe how the cylinder can be activated using 2/2 and 3/2 valves. Compare the two diagrams with regard to extension and retraction of the piston rod and draw your conclusions. Also, calculate the advancing pressure (p) for a piston rod whose diameter d = 60 mm and with a load weight F = 5 kN. Ignore the resistances for this calculation.
In: Mechanical Engineering
Find at least one example of each of these three promotional tools in the current press, Internet, TV, or other media source: advertising, public relations (PR), and personal selling. For each promotional tool example you found, describe how the companies are using the tools, and what the tools are meant to accomplish. Are promotional tools successful in delivering the company’s message?
In: Mechanical Engineering
8) Press Add tumor and try to selectively target the hydrogen nuclei at the location of the tumor. You can achieve this by changing the frequency of the radio wave or by changing the strength of the main magnetic field. Note: in an actual MRI neither is done and the gradient magnetic field is changed. Explain why changing the strength of the gradient field allows the selective stimulation of the hydrogen nuclei in one slice.
In: Biology
Read the following article, which is an abstract from a press release by the Hong Kong Government’s Information Service Department on 11th
October 2017, and then answer the questions that follow.
CE: Tax relief, new convention venues, innovation and technology to boost Hong Kong’s economy
In her maiden Policy Address today (October 11), the Chief Executive, Mrs Carrie Lam, outlined plans to diversify Hong Kong’s economy and create more opportunities for the city.
“While upholding the free market principle, the Government has to actively enhance its role in boosting our economic vibrancy through efforts in various areas, including land supply, talent, government-to-government business, policy directions, investment, business-friendly environment and taxation,” Mrs. Lam said.
Mrs. Lam unveiled new tax measures to reduce the burden on companies, including a two-tiered profits tax system that would lower the profits tax rate to 8.25 per cent – half the current standard rate – on the first $2 million of profit.
“To ensure that the tax benefits will target small and medium-sized enterprises (SMEs), we will introduce restrictions such that each group of enterprises may only nominate one enterprise to benefit from the lower tax rate,” she said. This, Mrs Lam said, would “provide further tax relief to small and medium-sized enterprises”. The standard profits tax rate of 16.5 per cent would remain unchanged for profit beyond $2 million.
In addition, the Chief Executive proposed that the first $2 million in eligible research and development (R&D) expenditure enjoy a 300 per cent tax deduction and 200 per cent for the remainder. A bill to implement the two initiatives will be submitted to the Legislative Council as soon as possible.
(Source: http://www.ird.gov.hk/eng/ppr/archives/17101101.htm)
Required
a State and briefly explain the objectives of a good tax system an d the characteristics it should possess.
b Briefly comment on the proposed measures in the article above by referring to your answer to (a). (You might need to refer to other materials to understand more about the background and to get some basic understanding of Hong Kong profits tax.)
In: Finance
Dungan Corporation is evaluating a proposal to purchase a new drill press to replace a less efficient machine presently in use. The cost of the new equipment at time 0, including delivery and installation, is $250,000. If it is purchased, Dungan will incur costs of $7,000 to remove the present equipment and revamp its facilities. This $7,000 is tax deductible at time 0.
Depreciation for tax purposes will be allowed as follows: year 1, $60,000; year 2, $90,000; and in each of years 3 through 5, $50,000 per year. The existing equipment has a book and tax value of $120,000 and a remaining useful life of 10 years. However, the existing equipment can be sold for only $60,000 and is being depreciated for book and tax purposes using the straight-line method over its actual life.
Management has
provided you with the following comparative manufacturing cost
data.
| Present Equipment | New Equipment | ||||
| Annual capacity (units) | 420,000 | 420,000 | |||
| Annual costs: | |||||
| Labor | $ | 55,000 | $ | 45,000 | |
| Depreciation | 30,000 | 34,000 | |||
| Other (all cash) | 68,000 | 40,000 | |||
| Total annual costs | $ | 108,000 | $ | 79,000 | |
The existing equipment is expected to have a salvage value equal to its removal costs at the end of 10 years. The new equipment is expected to have a salvage value of $80,000 at the end of 10 years, which will be taxable, and no removal costs. No changes in working capital are required with the purchase of the new equipment. The sales force does not expect any changes in the volume of sales over the next 10 years. The company’s cost of capital is 16 percent, and its tax rate is 25 percent. Use Exhibit A.8.
Required:
a. Calculate the removal costs of the existing equipment net of tax effects.
b. Compute the depreciation tax shield. (Round PV factors to 3 decimal places.)
c. Compute the forgone tax benefits of the old equipment.
d. Calculate the cash inflow, net of taxes, from the sale of the new equipment in year 10.
e. Calculate the tax benefit arising from the loss on the old equipment.
f. Compute the annual differential cash flows arising from the investment in years 1 through 10.
g. Compute the net present value of the project.
In: Accounting
In your own words! What are the current tax issues being reported in the press and are there any major changes that might be coming up in the future? Do you think that these changes are going to help our economy or set us back and why?
DO NOT COPY FROM A BOOK OR ARTICLE!
In: Accounting