A finance journal published a study of whether the decision to invest in the stock market is dependent on IQ. Information on a sample of 156905 adults living in Finland formed the database for the study. An IQ score​ (from a low score of 1 to a high score of​ 9) was determined for each Finnish citizen as well as whether or not the citizen invested in the stock market. The following table gives the number of Finnish citizens in each IQ​ score/investment category. Suppose one of the 156905 citizens is selected at random. Complete parts a through f.

a. What is the probability that the Finnish citizen invests in the stock​ market?

The probability is ________.. ​(Round to the nearest thousandth as​ needed.)

b. What is the probability that the Finnish citizen has an IQ score of 6 or​ higher?

The probability is ________. ​(Round to the nearest thousandth as​ needed.)

c. What is the probability that the Finnish citizen invests in the stock market and has an IQ score of 6 or​ higher?

The probability is ________.. ​(Round to the nearest thousandth as​ needed.)

d. What is the probability that the Finnish citizen invests in the stock market or has an IQ score of 6 or​ higher?

The probability is ________.. ​(Round to the nearest thousandth as​ needed.)

e. What is the probability that the Finnish citizen does not invest in the stock​ market?

The probability is ________.. ​(Round to the nearest thousandth as​ needed.)

f. Are the events​ {Invest in the stock​ market} and​ {IQ score of​ 1} mutually​ exclusive? Choose A,B,C or D

A. ​Yes, they are mutually exclusive because there are no Finnish citizens who invest in the stock market and have an IQ score of 1.

B. ​Yes, they are mutually exclusive because there are Finnish citizens who invest in the stock market and have an IQ score of 1.

C. ​No, they are not mutually exclusive because the probability that a Finnish citizen invests in the stock market and has an IQ score of 1 is very small.

D. ​No, they are not mutually exclusive because there are Finnish citizens who invest in the stock market and have an IQ score of 1.

In the context of this course, you will be asked to address the issues/questions below for Marriott International, Inc. (MAR), www.marriott.com. When addressing the issues/questions, be sure to do so in the context of this course and Marriott. You have been appointed as the special assistant to the Chief Executive Officer (CEO), Arne Sorenson, who has asked you to address the following five situations:

(a) A fellow MBA alum from Lynn University, who now works in Admission at Lynn University would like to give each MBA student a benefit, which is programmed into the Lynn University ID card. This benefit would allow the student one night each month, depending on availability, for a room at the Marriott Courtyard for $40. Normally the room rate is $100 and the full cost of a night’s stay is $50. Discuss whether or not this would be feasible, i.e. Marriott is able to do this transaction without it being a donation.

(b) Marriott currently buys its ice machines from a manufacturer in China. A representative from a company in Vietnam is offering to sell them for 20% less than cost from the manufacturer in China. Discuss the issues that you would consider in deciding whether or not to accept this offer.

(c) The CEO wishes to develop an incentive plan for the hotel managers.

Before this is put into place, the CEO wishes you to make sure that budgeting

in the hotels is done correctly. He has asked you to submit a document discussing

the key points that you have learned in MBA 640. Be as thorough as possible.

(d) Marriott has only used absorption costing. The CEO has asked you

to explain the merits of using variable costing under certain circumstances.

(e) The CEO has asked you to explain how target costing/pricing would be used in

Marriott’s pricing policies.

Review the three scenarios below. Look for which, if any, of these scenarios presents an example of post-investment holdup.

1. Your firm conducted a search for a new chief financial officer and hired a highly qualified candidate with a yearly salary of $250,000. After six months, the person left to join another firm.
2. Your firm has an exclusive contract to assemble automobile seats for a number of luxury models. Almost 100% of the materials are imported and, of those, over 50% include parts manufactured in China. All of the prices on the parts from China increased by 25% when the U.S. imposed tariffs on China. Your company has informed all of its customers that increased cost must be passed on for your firm to continue supplying the seats. All of your customers reluctantly agreed to pay the additional cost.
3. Your company took note of your progress toward your MBA, and when the director for customer services left the company, you were asked to take over as interim director. You were encouraged to apply for the full-time position once you got your MBA. You served for 13 months, at which time your company was acquired by another company and your position was abolished.

In your discussion post, address the following:

• Which of the above, if any, are an example of post-investment holdup?
• Define the following and explain each within the context of a chosen scenario:
  • What is the sunk, or stranded, cost?
  • What is the contract?
  • Was the contract breached?
  • What are the damages?

1. Trident Corporation acquires Uvell Company’s assets and liabilities for $40,000,000 in cash. At the date of acquisition, Uvell’s balance sheet reported assets of $90,000,000 and liabilities of $82,000,000. Investigation reveals that Uvell’s buildings are overvalued by $6,000,000 and it has unreported liabilities valued at $5,000,000.  

What journal entry will Trident Corp record as a result of this acquisition?

2. An acquiring company pays $45 million in cash, and issues new no-par stock with a fair value of $75 million, to the acquired company’s former owners, for the assets and liabilities of the acquired company. Registration fees associated with the new stock issuance are $300,000, paid in cash. Consulting fees for the acquisition are $1 million, paid in cash. The fair value of the acquired company’s identifiable net assets is $65 million.

What entry does the acquiring company make to record the acquisition?

3. A company invests $300,000 in equity securities on November 30, 2019, and classifies them as investments with no significant influence. At December 31, 2019, the company’s year-end, the securities have a fair value of $310,000. On February 1, 2020, the company sells the securities for $295,000.

What is reported on the Balance Sheet and Income Statement regarding the securities for 2019 and 2020?

4. Precision Company acquires all of Springfield Company’s voting stock for $5,000,000 in cash. Information on Springfield's assets and liabilities at the date of acquisition is as follows:

Book Values

Current assets $ 500,000

Land, buildings and equipment (net) $2,000,000

Liabilities ($600,000)

Capital stock ($500,000)

Retained earnings ($1,400,000)

Fair Values

Current assets $700,000

Land, buildings and equipment (net) $3,500,000

Liabilities ($550,000)

Capital stock

Retained earnings

In addition, Springfield Company has unrecorded identifiable intangible assets, in the form of brand names and lease agreements, with a total estimated fair value of $400,000.

Prepare the eliminating entries

Do you feel that it is ethical or unethical for professionals such as, psychoanalyst Clotaire Rapaille (a French marketing consultant and the CEO and Founder of Archetype Discoveries Worldwide), to use their knowledge to help corporate clients market and sell their products?

1. Who does the posted Powerpoint presentation categorize as a "Traditional Conservative"

a. Joseph Stalin (former leader of the USSR=Soviet Union)

b. Bernie Sanders Senator from Vermont

c. Adolph Hitler(former Dictator)

d. Margret Thatcher( former Prime Minister of the UK)

2.Just before World War I started:

a. The U.S. Stock Market Crashed

b. The U.S. personal income tax was found unconstitutional and ended.

c. The U.S. went off the gold standard

d. The Federal Reserve System (Fed) was created

Translation and Remeasurement of Account Balances

U.S. Industries has a subsidiary in Switzerland. The subsidiary’s financial statements are maintained in Swiss francs (CHF). Exchange rates ($/CHF) for selected dates are as follows:

The following items appear in the subsidiary’s trial balance at December 31, 2020:

1. Cash in bank, CHF4,000,000.

2. Inventory, CHF3,000,000. The inventory was acquired on November 30, 2020.

3. Machinery and equipment, CHF11,000,000. A review of the records indicates that the company bought equipment costing CHF5,000,000 in January 2018 (20 percent of this was sold in January 2020) and additional equipment costing CHF7,000,000 in January 2019. Ignore accumulated depreciation.

4. Depreciation expense on machinery and equipment, CHF1,100,000 (depreciated over ten years, straight-line basis).

Required

Calculate the dollar amount for each of the above items, assuming the functional currency of the Swiss subsidiary is

(a) the U.S. dollar and

(b) the Swiss franc.

Enter answers using all zeros (do not abbreviate to millions or thousands).

Read the Chapter 12 Mini-Case: A Change at the Top at Procter & Gamble: An Indication of How Much the CEO Matters?

Respond to question 2: How Is it a good practice to rehire a former CEO who has retired? Please explain the potential advantages and disadvantages of doing so.

1. Under GAAP, the consideration transferred in a business combination would include all of the following, except:
   1. Shares issued and given to the former owners of the acquired company
   2. Contingent consideration to be given to the former owners depending on the future earnings of that company
   3. Liabilities assumed by the purchaser
   4. Legal and accounting fees paid by the acquirer
2. When Large bought Tiny, Large issued some new shares of Large stock and gave them to the former owners of Tiny. In connection with issuing the stock, Large had to pay $25,000 of stock issuance fees. Large had to credit cash $25,000. What should it debit?
   1. Additional paid-in capital
   2. Stock issuance fees expense
   3. Investment in Tiny
   4. Goodwill
3. True/False: Under GAAP, consolidated financial statements should have the same balance sheet and income statement data as a company would have shown if it dissolved its subsidiaries into the parent company, instead of keeping them in separate legal existence.

Identifiable Intangibles and Goodwill, U.S. GAAP

International Foods, a U.S. company, acquired two companies in 2019. As a result, its consolidated financial statements include the following acquired intangibles:

Goodwill was assigned to the following reporting units:

It is now December 31, 2020, the end of International Foods’ accounting year. No impairment losses were reported on any intangibles in 2019. Assume that International Foods bypasses the qualitative option for impairment testing of goodwill and indefinite-life intangibles. Additional information at December 31, 2020 is as follows:

Required

Compute 2020 amortization expense and impairment losses on the above intangibles, following U.S. GAAP.

Enter answers in millions, using decimal places when applicable.