In 2013, Slim Drug Company began to notice problems with its obesity drug. The company stopped selling the drug near the end of 2013. In the last six months of 2014, the company was sued by 1,000 people who had an allergic reaction to the company’s obesity drug. At the end of 2014, the company’s lawyers believe there is a 60% chance the company will need to make payments in the range of $1,000 to $5,000 to settle each claim. At the end of 2015 while none of the cases have been resolved, the company’s lawyers now believe there is an 80% chance the company will need to make payments in the range of $2,000 to $7,000 to settle each claim. In 2016, 400 claims were settled at a total cost of $1.2 million. Based on this experience, the company believes 30% of the remaining cases will be settled for $3,000 each, 50% will be settled for $5,000 and 20% will be settled for $10,000 each.

Required: Using AASB Standards, show what journal entries would be required in 2013, 2014, 2015 and 2016.

Thunder Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost $147,150 and have an estimated useful life of 6 years. It can be sold for $68,000 at the end of that time. (Amusement parks need to rotate exhibits to keep people interested.) It is expected to increase net annual cash flows by $24,000. The company’s borrowing rate is 8%. Its cost of capital is 10%. Click here to view the factor table. Calculate the net present value of this project to the company and determine whether the project is acceptable. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round present value answer to 0 decimal places, e.g. 125.)

The project:

47.         (BONUS) Suppose that Disney wants to follow up on the success of Frozen, with a sequeal this fall. The movie will cost $165 million to produce (INVESTED TODAY), and the producers expect the movie to generate a cash flow of $160 million in the first year. After the first year, cash flows will decline to $15 million in year 2.

However, the movie will also create synergy within the company.

Disney will build a new Olaf ride at Epcot for $40 million (invested TODAY). Disney suspects that the ride will bring visitors to the park and increase merchandise sales. Disney estimates that sales will increase by $12 million per year in PERPETUITY. The after-tax operating margin on these sales is 50% for Disney. If the cost of capital is 10%, what is the combined NPV of this opportunity?

The distance between the eyepiece and the objective lens in a certain compound microscope is 21.4 cm. The focal length of the objective is 0.480 cm, and that of the eyepiece is 1.50 cm. Find the overall magnification of the microscope. (The near point of the eye is 25 cm. Assume that the object is placed at the focal point of the objective lens, and one places the eyepiece at the near point of the eye.)

a. Describe what happens to an uncharged conductor when a positive charge is brought near. Explain any forces that are exerted on the conductor. A sketch or drawing may be helpful.

b. Describe what happens to an uncharged insulator when a positive charge is brought near. Explain any (net) forces that are exerted on the insulator. A sketch or drawing may be helpful.

1. Type 1 subsequent events involve events that existed ___ the balance sheet date. (after, before, between, close to, near, on)

2. Type 1 subsequent events require ___ of the financial statements. (adjustment, consideration, disclosure, documentation, duplication)

3. Type 2 subsequent events come into existence ___ the balance sheet date. (after, before, between, close to, near, on)

4. Type 2 subsequent events occur after the balance sheet date but ___ the completion of fieldwork. (after, close to, near to, prior to, subsequent to)

5. Type 1 subsequent events come into existence due to new ___ becoming available. (auditors, clients, documentation, evidence, judgement)

Identify a company that has a HIGH DEGREE of market power. Specifically identify at least three barriers to entry that helped this company become a near monopoly, AND discuss HOW the company came to acquire these barriers to entry. Discuss the consequences of this near monopoly to potential consumer/business buyers for that company's products, and share your opinions on how you believe this firm could/should be regulated to reduce the dead-weight loss to society that is the consequence of all near monopoly industries. If you wish to discuss the benefits that accrue to consumers/businesses/society as a result of your company's product innovation, community service, etc., please feel free to do so.

As a developing countries make a transition to market-based economies, one of the first major capital investment is in "western-quality" hotels. Explain why brand-name hotel accommodations are a critical step in attracting foreign investment.

For a water park project, provide the following information.

Project Economies

 Policies

 Organizational Structure

 Marketing Strategy (Market Segmentation/4P’of Marketing)

 Funding Explanation

 Financial Plan

 Contingency Plans

 Survey/Evaluation and Analysis