LO 2) Aston Corporation performs year-end planning in November of each year before its calendar year ends in December. The preliminary estimated net income is $3 million. The CFO, Rita Warren, meets with the company president, J. B. Aston, to review the projected numbers. She presents the following projected information.

Estimated fair value at December 31, 2017:

Other information at December 31, 2017:

The corporation has never used robotic equipment before, and Warren assumed an accelerated method because of the rapidly changing technology in robotic equipment. The company normally uses straight-line depreciation for production equipment.

Aston explains to Warren that it is important for the corporation to show a $7,000,000 income before taxes because Aston receives a $1,000,000 bonus if the income before taxes and bonus reaches $7,000,000. Aston also does not want the company to pay more than $3,000,000 in income taxes to the government.

Instructions

(a)  

What can Warren do within GAAP to accommodate the president's wishes to achieve $7,000,000 in income before taxes and bonus? Present the revised income statement based on your decision.

(b)  

Are the actions ethical? Who are the stakeholders in this decision, and what effect do Warren's actions have on their interests?

Consider the following time series data.

1. Graph this data series (use the X-Y scatter/chart tool in Excel for this plot). What type of pattern(s) exists in the data? Does the graph suggest that these data exhibit seasonality? What is the length of the season in this particular case?
2. Determine the seasonal factors for each quarter using METHOD 1 (multiplicative seasonal model).
3. Compute the quarterly forecasts for next year (Year 4)?

Consider the following time series data.

1. Graph this data series (use the X-Y scatter/chart tool in Excel for this plot). What type of pattern(s) exists in the data? Does the graph suggest that these data exhibit seasonality? What is the length of the season in this particular case?
2. Determine the seasonal factors for each quarter using METHOD 1 (multiplicative seasonal model).
3. Compute the quarterly forecasts for next year (Year 4)?

Suppose the sales in the first year, R, are $100 and they grow every year at a growth rate of g = 10%. Also, suppose that the net margin is 40%. This means that earnings in the first year are going to be 0.4*100 = $40. Assuming that the discount rate, d, is 25%. What is the present value of earnings assuming that the company survives for 10 years?

1. If you receive $100 in the 2nd year and $250 in the 4th year at an interest rate of 5.5%, what is the total PV of these lump sums? ANSWER: $291.65

2. What is the PV of an investment that yields $500 to be received in 5 years and $1000 to be received in 10 years at an interest rate of 4%? ANSWER: $1086.53

(Can someone please show me how you solve this, with the steps. Also how to calculate/input it onto excel. Thank you so much! ( :

Addison pays $15,000 for an annuity that will pay $1,000 a year, starting this year. If the annuity is for a term of 20 years, how much taxable income will Addison have from the annuity each year?

Group of answer choices

c. Addison will have $750 of taxable income from the annuity each year.

d. Addison will have $1,000 of taxable income from the annuity each year.

a. Addison will never have taxable income resulting from annuity distributions.

b. Addison will have $250 of taxable income from the annuity each year.

Ritania is calculating its balance of payments for the year. All transactions for the year are listed below (all amounts are expressed in US dollars).

1. Ritania received weapons worth $200 from the US under its military program; no payment is necessary.
2. A Ritanian firm exported $400 of cloth.
3. A Ritanian resident is paid $10 in interest on a loan to a foreigner.
4. Foreign tourists visited Ruritania and spent $100 in traveler’s checks.
5. Ritanian investors invested $200 overseas and received $50 in interest on the investment that same year.
6. A Japanese construction firm received a $150 installment payment for work done in Ruritania.
   1. Calculate Ritania’s current account (CA) and Financial Account (FA) balances. Briefly (in one, very short sentence) interpret the CA balance.
   2. What change in the official reserve (OR) account is implied such that the balance of payments balances? Interpret (in one, very short sentence) this change.

George Robinson plans to invest $28,100 a year at the end of each year for the next seven years in an investment that will pay him a rate of return of 9.8 percent. How much money will George have at the end of seven years? (Round factor values to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25.)

1. The CPI is 1.00 in year one and 1.25 in year two. If the nominal wage is $20 in year one and a contract calls for the wage to be indexed to the CPI, what will be the nominal wage in year two?

2. If in the economy, business saving equals $220 billion, household saving equals $35 billion and government saving equals –$150 billion, what is the value of private saving?

3. In country Alpha with 400 million people aged 16 years and older, 240 million are in the labor force, and 200 million are employed, what is the participation rate?

4. Suppose real GDP per person were $1,000 in 1900 and grew at a two percent annual rate, what would be the value of real GDP per person 150 years later?

Assume that the yield on a 5 year security is 2.75% , the one year yield is 1.20%, and your expectations for the next 4 year one year yields are 1.55%, 2.19%, 2.98%, and 3.10%. Determine whether you should invest in the 5 year security or 5 consecutive one year securities according to the un-bias expectations theory. Depending upon your answer what should happen to the long term and short yields in the market?