CEOs are hired to maximize the present value of the firm. To date, we have explored some of the challenges associated with this conflicting endeavor. The emphasis on short-term gains at the expense of long-term vitality is real. The President of the US stated that he wanted to open the country back up for business by Easter Sunday. What is more, Liberty University President just announed on 3/25/20 that he is opening the school back up to some 5,000 students. Your assignment is to evaluate our current economic model and capital market structure to determine if CEOs have the proper incentives to do the right thing for their shareholders. Are compensation models encouraging CEOs to take more risks than warranted?

1. An individual is holding an ancient coin and claims that he got money. Discuss whether his claim is true or false? State your justification.
2. What do you mean by money has “intrinsic value”?
3. An individual has Centurion® Card from American Express (credit cards). The credit card is most valuable credit card in the world. Can this individual claim that he/she is a wealthy individual?

Professional Fees Earned Budget for a Service Company

Roberts and Chou, CPAs, offer three types of services to clients: auditing, tax, and small business accounting. Based on experience and projected growth, the following billable hours have been estimated for the year ending December 31, 2016:

The average billing rate for staff is $150 per hour, and the average billing rate for partners is $270 per hour.

Prepare a professional fees earned budget for Roberts and Chou, CPAs, for the year ending December 31, 2016.

Valencia Manufacturing Company manufactures and sells musical gadgets. The business earned Operating Income of $220,000 in 2018, when selling price per unit was $200, and the president of Valencia is under pressure to increase operating income in 2019. Data for variable cost per unit and total fixed costs were as follows:

Required:

(a)          Using the equation method, calculate the number of units sold in 2018.    

(b)          Given the sales units calculated in Part (a), prepare a contribution margin income statement for the year ended December 31, 2018, detailing the composition of total fixed costs and clearly showing contribution and net income.                                                                          

(c)          Calculate Valencia’s break-even point in units and in sales dollars.             

(d)          Calculate the margin of safety in units and in sales dollars.                          

(e)          The management of Valencia Manufacturing Company is desirous of increasing operating income by 20% in 2019. They expect per unit data and total fixed costs to remain the same in 2018. Determine the number of units that must be sold to earn this target operating profit. Is this a realistic goal?                                                                                                               

(f)           Assume that as a result of reorganizing the production process, Valencia Manufacturing Company was able to reduce direct material cost per unit by $5 due to a change in the quality of raw material used in the production process but the expected sales of 6,000 units would decrease by 5% and total fixed costs are expected to increase by $94,000. What must the new selling price per unit be if the company wishes to meet the target operating profit for 2019?  

(g)          You have just begun your summer internship at Valencia Manufacturing. To expand sales, the business is considering paying a commission to its sales team. You have been asked to compute 1) the new break-even sales figure, and 2) the operating profit if sales increase by 10% under the new sales commission plan. She is confident that you can handle the task, because you learned CVP analysis in your accounting class.

You collected your data, performed your analysis and submitted a memo to your manager, who was very pleased with the work done. Your report indicated that the new sales commission plan would result in a significant increase in operating income but only a small increase in break-even sales.

A few days after, you realized that you made an error in the CVP analysis, as the sales personnel’s $88,000 monthly salaries were inadvertently left out and you therefore did not include this fixed marketing cost in your computations. You are not sure what to do, as you are afraid that Valencia might not offer you permanent employment after the internship.

How would your error affect breakeven sales and operating income under the proposed sales commission plan? After considering all factors, should you inform your manager or simply keep quiet?                                                                                                                        

1) Carol works for ABC Company and earned $64,500 for the entire year 2018. How much in FUTA tax is her employer required to withhold in her name? Assume that the employer receives the maximum credit for state unemployment taxes.

Choices:

A) $0

B) $435.00

C) $46.40

D) $42.00

2) Alice is single and self-employed in 2020. Her net business profit on her Schedule C for the year is $158,000.

What is her self-employment tax liability and additional Medicare tax liability for 2020? (Round your final answer to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.)

Self-Employment Tax Liability =

Additional Medicare Tax Liability =

3) Rasheed works for Company A, earning $360,000 in salary during 2020.

Assuming he is single and has no other sources of income, what amount of FICA tax will Rasheed pay for the year? (Round your intermediate and final answer to the nearest whole dollar amount.)

Amount of FICA Tax =

Question 1

(a) An income statement details how much cash a company earned during a specific period. TRUE OR FALSE?

(b) Depreciation reduces the cash on a firms balance sheet.TRUE OR FALSE ?

(c) We can create a cash flow statement by reversing out non-cash flow items on the income statement. TRUE OR FALSE ?

(d) Is a firms net income usually the best way to measure a managers performance ? If so, why? And if not what might be a better method?

(f) IF a firm has $2 million in total assets, $1.5 million in total liabilities, 0 preferred stock outstanding, and retained earnings of $100,000, what is the common stock on balance sheet.

1) In the month of August, John earned $2750 in commission. His company has provided him with a drawing account of up to $800 per month. If Paul drew $500 on August 15^th what is the amount of Paul’s commission check on August 31?

2) Fred earns an annual salary of $46,000 and she is paid semi-monthly. What is her pay per period?

3) Ben purchases fresh blueberries from local pickers to sell at the market over a 12 week period. For the first 4 weeks, he pays the pickers $8.00 basket and buys 62 baskets; during the next 4 week period he pays the pickers $6.00 basket and buys 95 baskets; during the last 4 weeks he pays the pickers $9.50 per basket and buys 56 baskets. What is the average cost per basket to Seth over the whole period?

Case Study: Personal Beliefs in the Workplace Don Shakow was a prominent professional who worked in Seattle and Massachusetts in U.S. This case study discusses the nature of Don Shakow’s professional and personal lives. When you read the case study, notice that Don had controversial personal opinions and choices. The heading of Don Shakow’s obituary reads, "Don Shakow’s moral beliefs put to test in the workplace." Although as an economist (rather than an engineer), Shakow’s commitments and expertise certainly overlapped those of engineers. Among other things, he served as an expert witness on the economics of rapid-transit and public energy proposals. In the mid-70s, he joined Mathematical Sciences Northwest to evaluate proposed power projects for Seattle City Light Company, the city’s electricity utility. His finding that regional energy needs were seriously over-estimated resulted in Seattle City Light withdrawing its support for two Washington public power supply system nuclear plants. Shakow’s former colleague, Frank Miller, commented that their eventual construction "resulted in the largest utility-bond default in U.S. history." Shakow supported many liberal political causes, such as organic farming, home grown food, and food cooperatives. He protested against the Vietnam War. He co-founded the Little Bread Co., which carried messages on its reader board, such as "We Can’t Support One Gov’t ‒ Let Alone Thieu" (A reference to the then premier of South Vietnam). No doubt a somewhat controversial figure throughout his activist life, he was characterized by the reporter, Carole Beers, as "that rare individual: he fully integrated his moral beliefs into his work life." Page 2 of 3 Discuss the difficulties of fully integrating one’s moral beliefs into one’s work life.

1. According to this case, what was the key thing Don Shakow was doing in his life? ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________

2. Is it desirable to try to mix ones moral beliefs with work life? Support your answer with an example. ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________

3. Can one’s personal obligations conflict with the obligations that one has as a professional engineer or employee?

Support your answer with an example. _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________

4. If so, how should such a conflict be resolved?

1. Description of Health Care System
   1. Does it include universal coverage or not?
   2. Different health care services offered
   3. How is the system set up?
   4. What roles do nurses and advanced practice nurses play in the system?
   5. Is the system based on a preventative care model?
   6. Provide a detailed description of the health care system.
2. Costs of Health Care System
   1. How is the health care system paid for?
   2. What is the responsibility of the individual, state, local, and government?
   3. How do patients without insurance or ability to pay access health care?
   4. Are there differences in coverage based on an income?
   5. Is there a private system, public system, or combination of both?
3. Outcomes/Satisfaction of the health care system (minimum three references)
   1. Describe the positive and negative aspects of this health care system as documented in the literature.
   2. What are the strengths and weaknesses of this system?
   3. Are the residents  of this country satisfied with this system?
4. Differences with US Health care System
   1. Describe how this health care system is different than the US health care
   2. Compare and contrast the health care system you have chosen with the US health care system.
   3. Identify the pros and cons of each system as well as similarities and differences