Ben Bates graduated from college six years ago with a finance undergraduate degree. Although he is satisfied with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to achieve this goal. After examining schools, he has narrowed his choice to either Wilton University or Mount Perry College. Although internships are encouraged by both schools, to get class credit for the internship, no salary can be paid. Other than internships, neither school will allow its students to work while enrolled in its MBA program. Ben currently works at the money management firm of Dewey and Louis. His annual salary at the firm is $65,000 per year, and his salary is expected to increase at 3 percent per year until retirement. He is currently 28 years old and expects to work for 40 more years. His current job includes a fully paid health insurance plan, and his current average tax rate is 26 percent. Ben has a savings account with enough money to cover the entire cost of his MBA program. The Ritter College of Business at Wilton University is one of the top MBA programs in the country. The MBA degree requires two years of full-time enrollment at the university. The annual tuition is $70,000, payable at the beginning of each school year. Books and other supplies are estimated to cost $3,000 per year. Ben expects that after graduation from Wilton, he will receive a job offer for about $110,000 per year, with a $20,000 signing bonus. The salary at this job will increase at 4 percent per year. Because of the higher salary, his average income tax rate will increase to 31 percent. The Bradley School of Business at Mount Perry College began its MBA program 16 years ago. The Bradley School is smaller and less well known than the Ritter College. Bradley offers an accelerated, one-year program, with a tuition cost of $85,000 to be paid upon matriculation. Books and other supplies for the program are expected to cost $4,500. Ben thinks that he will receive an offer of $92,000 per year upon graduation, with an $18,000 signing bonus. The salary at this job will increase at 3.5 percent per year. His average tax rate at this level of income will be 29 percent. Both schools offer a health insurance plan that will cost $3,000 per year, payable at the beginning of the year. Ben also estimates that room and board expenses will cost $2,000 more per year at both schools than his current expenses, payable at the beginning of each year. The appropriate discount rate is 6.3 percent.

3. Assuming all salaries are paid at the end of each year, what is the best option for Ben— from a strictly financial standpoint?

4. Ben believes that the appropriate analysis is to calculate the future value of each option. How would you evaluate this statement?

5. What initial salary would Ben need to receive to make him indifferent between attending Wilton University and staying in his current position?

6. Suppose, instead of being able to pay cash for his MBA, Ben must borrow the money. The current borrowing rate is 5.4 percent. How would this affect his decision?

One of the major criticisms of Administrative Agencies is that “the need for specialized expertise in a given area can usually only come from the industry being regulated.” We can see this by the number of former Wall Street executives working for and heading the SEC or the United States Treasury or former pharmaceutical executives working for a heading the FDA. What do you think about this practice? Provide examples to defend your viewpoint.

Riverbed Company reports pretax financial income of $63,900 for 2020. The following items cause taxable income to be different than pretax financial income.

Riverbed’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020.

Compute taxable income and income taxes payable for 2020.

Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020.

Compute the effective income tax rate for 2020.

During 2020, Susan Building Company constructed various assets at a total cost of $12,600,000. The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2020 were $8,138,000. The company had the following debt outstanding at December 31, 2020:

Compute the amounts of each of the following.

During 2020, Maria Building Company constructed various assets at a total cost of $12,600,000. The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2020 were $8,347,000. The company had the following debt outstanding at December 31, 2020:

Compute the amounts of each of the following.

A parent company acquired 100 percent of the stock of a subsidiary company on January 1, 2013, for $800,000. On this date, the balances of the subsidiary’s stockholders’ equity accounts were Common Stock, $50,000, Additional Paid-in Capital, $55,000, and Retained Earnings, $195,000. On the acquisition date, the excess was assigned to the following AAP assets:

The Goodwill asset has been tested annually for impairment, and has not been found to be impaired.

Assume that the parent company sells inventory to its wholly owned subsidiary. The subsidiary, ultimately, sells the inventory to customers outside of the consolidated group. You have compiled the following data for the years ending 2015 and 2016:

The inventory not remaining at the end of a given year is sold to unaffiliated entities outside of the consolidated group during the next year. The parent uses the cost method of pre-consolidation Equity Investment bookkeeping.

The financial statements of the parent and its subsidiary for the year ended December 31, 2016, follow:

a. BOY [ADJ] for consolidation at December 31, 2016

b. Consolidating entries

Wember Company acquired a subsidiary company on December 31, 2012, and recorded the cost of the intangible assets it acquired as follows:

The patent is being amortized by the straight-line method over an expected life of 10 years with no residual value. Amortization has been recorded for the current year. The trade name was considered to have an indefinite life.

Because of the success of the subsidiary in the past, Wember has not previously considered any of the intangible assets to be impaired. However, in 2016, because of a current recession and technological changes in the subsidiary’s industry, Wember decides to review all of its intangible assets for impairment and record any adjustments at December 31, 2016.

Wember estimates that the fair value of the patent is $42,000. The company estimates the fair value of the trade name to be $90,000 but decides that it now has a limited life of 5 years. The subsidiary company, which qualifies as a reporting unit, has a book value of $700,000, including the goodwill of $150,000. Wember estimates that the fair value of the subsidiary company is $400,000, of which it allocates 80% to the identifiable assets and liabilities.

Required:

Please I would like a brief summary of the article below and a critical Graphical or analytical analysis for the same article below. to do it use economic tools developped in microeconomics or concept used in microeconomics or economic. Please what information do you need? I gave you everything the article and the instructions ( summary and a critical analytical analysis for the article). you said you need more information but you do say what kind of information you need.

This is the article:

Tax Revamp Drives Corporate CEOs’ Economic Outlook to 15-Year High

CEOs expect to increase spending and hiring, survey says, but tariffs are worrisome

By

Sarah Chaney

Sarah Chaney

The Wall Street Journal

Chief executives of America’s largest companies raised their outlook for spending, hiring and sales to the highest level in 15 years in the first quarter after the passage of the U.S. tax overhaul.

While the Business Roundtable CEO Economic Outlook Index reached its highest level in the survey’s history, the group’s leaders warned that recent U.S. trade policy could imperil the gains. The index is a composite of companies’ plans for capital spending and hiring, as well as projections for sales, over the next six months.

Small-business owners, in a separate report Tuesday, reported their highest optimism in 35 years in February.

The Business Roundtable survey is the first the group has conducted since the U.S. tax changes were adopted in December. The law included many provisions the Business Roundtable supported, such as a much lower corporate tax rate and lighter taxes on many U.S. companies’ foreign earnings.

James Dimon, chairman of the Business Roundtable and CEO of JPMorgan Chase & Co., said the survey results are likely to translate into more jobs for Americans.

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“The historic tax-reform law is already prompting more investment, jobs, high wages and more benefits for workers all here in the United States of America,” Mr. Dimon said.

Executives also boosted their projection for growth this year in gross domestic product, predicting a 2.8% rate, above their earlier estimate of 2.5%.

The survey of 137 chief executives at large U.S. businesses was conducted between Feb. 7 and 26.

Joshua Bolten, Business Roundtable president and CEO, said the survey was conducted before the Trump administration’s announcement of tariffs on imports of steel and aluminum, which conflict with the Business Roundtable’s position in favor of negotiations that would lower tariffs around the world. Mr. Bolten served as budget director and chief of staff in the administration of President George W. Bush.

“Missteps on important elements of U.S. trade policy will undermine great economic progress that’s been realized so far from tax reform and regulatory relief, perhaps even reverse it,” Mr. Bolten said.

In the first quarter, the share of firms planning to increase staff over the next six months rose to 61%, above the 43% of the fourth quarter, while the share of companies planning to ramp up capital investment increased to 68% from 49%. The share expecting sales to increase shot up to 93% this quarter from 76%.

Small-business owners also responded positively to the tax changes, showing the most optimism in more than three decades, according to another report.

The Small Business Optimism Index rose in February to 107.6, the National Federation of Independent Business said. It was the second-highest level in the measure’s 45 years, second only to a reading of 180 in 1983.

“Small-business owners are telling us loud and clear that they’re optimistic, ready to hire and prepared to raise wages,” NFIB chief economist Bill Dunkelberg said.

—Cara Lombardo contributed to this article.

Write to Sarah Chaney at [email protected]

Dennis Kozlowski: Living Large

Dennis Kozlowski came from modest circumstances. He began his career at Tyco International in 1975 as an auditor, and worked his way up the corporate ladder to become CEO in 1992. Kozlowski gained notoriety as CEO for the rapid growth and success of the company, as well as his extravagant lifestyle. He left the company in 2002 amid controversy surrounding his compensation and personal spending. In 2005, Kozlowski was convicted of crimes in relation to alleged unauthorized bonuses of $81 million, in addition to other large purchases and investments.

As CEO, Kozlowski was lauded for his risk-taking and the immense growth of the company. He launched a series of strategic mergers and acquisitions, rapidly building up the size of Tyco. During his first six years as CEO, he secured 88 deals worth over $15 billion. Strong growth was bolstered by a booming economy, and Tyco’s stock price soared as the company consistently beat Wall Street’s expectations. However, when the economy slowed, the company began to struggle.

Allegedly, Tyco paid for Kozlowski’s $30 million New York apartment, as well as personal gifts and parties, including $1 million of a $2 million birthday party for his wife. After Kozlowski paid a $20 million finding fee to a board member without proper approval, and paintings invoiced for Tyco offices ended up in Kozlowski’s apartment (among other irregularities), Kozlowski was criminally charged with looting more than $600 million of assets from Tyco and its shareholders.

While many questioned his lifestyle, others questioned the trial and conviction. Commenting on the case, civil rights lawyer Dan Ackman wrote, “It’s fair to say that Kozlowski…abused many corporate prerogatives… Still, the larceny charges at the heart of the case did not depend on whether the defendants took the money—they did—but whether they were authorized to take it.” Kozlowski asserted his innocence of the charges, stating, “There was no criminal intent here. Nothing was hidden. There were no shredded documents. All the information the prosecutors got was directly off the books and records of the company.”

Please read the article and provide the answers for following questions.

1. Do you think Dennis Kozlowski was an effective leader for Tyco International? Were his actions ethically permissible? Why or why not?

2. As CEO of a major company, how might entitlement bias have affected Kozlowski’s behavior?

3. What rationalizations do you think Kozlowski might have used to justify his behavior in his own mind?

4. If you were in Kozlowski’s position, how do you think your actions would affect the behavior of your employees? Why?

5. Can you think of any other examples of leaders who have abused the power of their position? What similarities and differences do you see between them and Kozlowski?

On January 1, 2020, the Accumulated Depreciation—Machinery account of Astros Company showed a balance of $370,000. At the end of 2020, after the adjusting entries were posted, it showed a balance of $395,000. During 2020, one of the machines which cost $125,000 was sold for $60,500 cash. This resulted in a loss of $4,000. Assuming that no other assets were disposed of during the year, how much was depreciation expense for 2020?