Ed's utility from vacations (V) and meals (M) is given by the function U(V,M) = V²M. Last year, the price of vacations was $200 and the price of meals was $50. This year, the price of meals rose to $75, the price of vacations remained the same. Both years, Ed had an income of $1,500. Include a budget line and indifference curve diagram in your response to this question.

1. What is Ed’s optimal consumption of vacations and meals before and after the price change?
2. Calculate the substitution and income effects arising from the change in meal price. Are meals a normal good, and inferior good, or neither? Explain.

Let G(V, E,w) be a weighted undirected graph, where V is the set of vertices, E is the set of edges, and w : E → R + is the weight of the edges (R + is the set of real positive numbers). Suppose T(G) is the set of all minimum spanning trees of G and is non-empty. If we know that the weight function w is a injection, i.e., no two edges in G have the same weight, then:

a) How many elements would T(G) has? Please support your answer to the above question with a proof.

XYZ Corp began construction on a building on January 1, 2016. On that date, it made its first $500,000 payment. An additional $600,000 were paid on 4/1/2016 and $300,000 was paid on 7/1/2016. A final payment of $100,000 was made on 12/31/2016, which is also the date when the construction project was finished and the building was ready to use.

To finance the project, XYZ Corp issued a $800,000 10% note. Furthermore, XYZ Corp had a $2,000,000 5% note outstanding that was not specifically related to the construction project. Both Notes were outstanding for the entire construction project.

What are the weighted average accumulated expenditures on the construction project?

How much interest should be capitalized during 2016?

What is the value of the Building on the 12/31/2016 Balance Sheet of XYZ Corp?

What is the interest expense that XYZ Corp records during 2016?

a.) Define GDP.

b.) What are three reasons why GDP in the United States has increased over time?

c.) Consider a country with a simple economy that produces two goods: apples and bananas. Data is collected in two years: 2016 and 2017.

2016:

Price of Apples: $2 Quantity of Apples: 10

Price of Bananas: $3 Quantity of Bananas: $20

2017:

Price of Apples: $4 Quantity of Apples: $30

Price of Bananas: $6 Quantity of Apples: $60

Complete nominal GDP in this country in 2016 and 2017.

d.) Using the data from c.), compute real GDP in 2016 and 2017 using 2016 as the base year.

e.) Using your answers from c.) and d.), compute the GDP price deflator for 2016 and 2017.

f.) Compute the growth rate of real GDP between 2016 and 2017.

The inventories of Berry Company for the years 2016 and 2017 are as follows:

Berry uses a perpetual inventory system.

Assume Berry uses the direct method.

Assume Berry uses the allowance method.

The inventory records of Frost Company for the years 2016 and 2017 reveal the cost and market of the January 1, 2016, inventory to be $125,000. On December 31, 2016, the cost of inventory was $130,000, while the market value was only $128,000. The December 31, 2017, market value of inventory was $140,000, and the cost was only $135,000. Frost uses a perpetual inventory system.

4.

Johnson Corporation sponsors a defined benefit pension plan for its employees. On January 1, 2016, the    

following balances relate to this plan.

Plan assets                                                         $500,000

Defined benefit obligation 800,000

Pension asset/liability 300,000

As a result of the operation of the plan during 2016, the following additional data are provided by the actuary.

Service cost for 2016                                                                                       $150,000

Discount (interest) rate 8%

Actual return on plan assets in 2016 60,000

Unexpected loss from change in defined benefit obligation,

due to change in actuarial predictions 85,000

Contributions in 2016 120,000

Benefits paid to retirees in 2016 90,000

Instructions

(a)    Use the data above to prepare a pension worksheet. On the pension worksheet, compute pension expense, pension asset/liability, defined benefit obligation, plan assets, and other comprehensive income.

(b)    Prepare the journal entry for pension expense for 2016.

Pin Corporation paid $4,500,000 for a 90 percent interest in San Corporation on January 1, 2016; San’s total book value was $4,500,000. The excess was allocated as follows: $150,000 to undervalued equipment with a three-year remaining useful life and $350,000 to goodwill. The income statements of Pin and San for 2016 are summarized as follows (in thousands):

                                                                                    Pin                               San

                        Sales                                                    $9,000                         $5,200

                        Income from San                                      450                         

                        Cost of sales                                         (5,000)                         (3,600)

                        Depreciation expense                         (1,000)                            (520)

                        Other expenses                                   (1,450)                            (580)

                        Net income                                         $2,000                             500

Required:

1. Calculate the goodwill that should appear in the consolidated balance sheet of Pin and Subsidiary at December 31, 2016.
2. Calculate the following 3 items for 2016:

• Consolidated net income for 2016
• Controlling share of consolidated net income for 2016
• Noncontrolling share of consolidated net income for 2016

Calculate the 5-day and 50-day simple MA for the stock price from 28 Oct 2016 to 14 June 2017. Plot the MA5 and MA50. How many golden crosses (if any) are there?