For the publicly traded U.S. company Apple (AAPL), analyze the overall effect of macroeconomic principles, theories, policies, and tools that have influenced the company's economic decisions and strategy development.

Bobcat Company, U.S.-based manufacturer of industrial equipment, just purchased a Korean company that produces plastic nuts and bolts for heavy equipment. The purchase price was Won 8 500 million. Won1,000 million has already been paid, and the remaining Won7,500 million is due in six months. The current spot rate is Won1,107/$, and the 6-month forward rate is Won1,178/$. The 6-month Korean won interest rate is 16?% per annum, the 6-month U.S. dollar rate is 4.5% per annum. Bobcat can invest at these interest rates, or borrow at 2% per annum above those rates. A 6-month call option on won with a Won1,200/$ strike rate has a 3.8% premium, while the 6-month put option at the same strike rate has a 3.2?% premium. Bobcat can invest at the rates given above, or borrow at 2% per annum above those rates. Bobcat's weighted average cost of capital is 11.5?%. Compare alternate ways below that Bobcat might deal with its foreign exchange exposure.

a. How much in U.S. dollars will Bobcat pay in 6 months without a hedge if the expected spot rate in 6 months is assumed to be Won1,107/$? Won1,178/$?

b. How much in U.S. dollars will Bobcat pay in 6 months with a forward market hedge?

c. How much in U.S. dollars will Bobcat pay in 6 months with a money market hedge?

d. How much in U.S. dollars will Bobcat pay in 6 months with an option hedge if the expected spot rate in 6 months is assumed to be less than Won1,200?/$? to be Won1,300?/$?

e. What do you recommend?

An open economy interacts with the rest of the world through its involvement in world markets for goods and services and world financial markets. Although it can often result in an imbalance in these markets, the following identity must remain true:

In other words, if a transaction directly affects the left side of this equation, then it must also affect the right side. The following problem will help you understand why this identity must hold.

Suppose you own a toy store in the United States, where there is high demand for the PlayNation Perfect, a video game console. Because of this, you spend $10,000 to increase your inventory of the gaming system, which is manufactured by Zony, a Japanese company, in Japan.

Determine the effects of this transaction on exports, imports, and net exports in the U.S. economy, and enter your results in the following table. If the direction of change is "No change," enter "0" in the Magnitude of Change column.

Hint: The magnitude of change should always be positive, regardless of the direction of change.

Because of the identity equation that relates to net exports, the____ in U.S. net exports is matched by_____ in U.S. net capital outflow. Which of the following is an example of how the United States might be affected in this scenario? Check all that apply.

Zony purchases $10,000 worth of stock in a U.S. company.

Zony purchases $10,000 worth of U.S. bonds.

Zony exchanges the $10,000 for yen at the local bank, which then uses the dollars to purchase U.S. bonds.

Case:

How Bad Performance Management Killed Microsoft’s Edge What went wrong? Microsoft has been crippled by a management system known as “stack ranking.” Like the hated bell curve of your high school memory, this program forced each business area to rank a certain percentage of employees as top, good, average, or poor performers. That means that even if your department was full of stars, a certain quota would be getting bad reviews—no matter how hard they worked. Pretty demoralizing. Here is a quote from the preview of the article that’s now available online: “Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees,” Eichenwald writes. “If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get mediocre reviews, and 1 was going to get a terrible review,” says a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.” This sort of cannibalistic performance management practice—with its rigid, stratified winner’s circle—completely disengaged many workers at the company, and led to a culture that did not encourage cooperation or teamwork. Innovation and excellence fell victim to the need to compete with co-workers for not only recognition but survival. Said one former employee: “It was always much less about how I could become a better engineer and much more about my need to improve my visibility among other managers.” Microsoft, once the uncontested king of the tech industry, has faltered while companies like Facebook, Apple and Google have excelled. Where Microsoft had a head start on technologies like smart phones, social networking and e-reader tablets, in every case the company’s culture, which penalized risk-taking, caused them to fail. Good talent management is not divisive; it is inclusive. It takes into account the viewpoints of peers; it doesn’t pit you against peers. It is flexible and immediate and responsive to the needs of management and the needs of workers. It works in tandem with the culture you want to encourage; it does not set up a new, toxic culture. The surest way to kill your company is to ignore these principles. Answer the following questions:

Q1. Identify the performance measurement system adopted in the Microsoft company and analyze its negative impact on employee morale, creativity and work-outcomes.

Q2. Identify and explain the key stages of the performance management cycle in which Microsoft company made errors in designing an effective performance management system. Give examples  

Q3. In your opinion, is the performance management system at Microsoft ethical? Can it create legal issues for the company?  

Q4. Plan and propose a new performance management system for Microsoft company capable of motivating the employees, taking into consideration all the stages of PMS development.  

Consolidated amounts when affiliate's debt is acquired from non-affiliate
Assume that a Parent company owns 100 percent of its Subsidiary. On December 31, 2013, the Parent company had a $400,000 (face) bond payable outstanding with a carrying value of $420,000. The bond was originally issued to an unaffiliated company. On that same date, the Subsidiary acquired the bond for $399,000.

During 2013, the Parent company reported $180,000 of (pre-consolidation) income from its own operations (i.e., prior to any equity method adjustments by the Parent company) and after recording interest expense. The Subsidiary reported $100,000 of (pre-consolidation) income from its own operations. Related to the bond during 2013, the parent reported interest expense of $60,000. The unaffiliated company that held the bond prior to December 31, 2013 recorded interest income of $60,000. Determine the following amounts that will appear in the 2013 consolidated income statement:

Note: Use a negative sign with your answer to indicate a loss on constructive retirement of bond payable, if applicable.

In this simulation, you are assigned the role of Senior Vice President for Marketing at Enhanced Analytics, Inc., a provider of marketing and consulting services, with headquarters in Austin, Texas. In this role, you report directly to the CEO of the company and are responsible for decision-making and marketing strategy. You oversee a department with 25 employees at the company. The CEO of the company has informed you at the weekly executive meeting that Premier Drinks of Sofia, Bulgaria - a key client of Enhanced Analytics, Inc. - has reported a drop in sales, despite an expensive and carefully managed marketing campaign produced by your department. The management of Premier Drinks reports increased competition in the soft drink market in Bulgaria. Two companies - one from Poland and one from Germany - have recently established operations in the country. You were already aware of the trends in the local competitive environment from the periodic reports received from your campaign manager in Bulgaria. You have also studied the marketing efforts of some of your client's competitors and continue to believe that your campaign, particularly the promotional and pricing strategy adopted, is superior. The managers of Premier Drinks suspect that their local competitors have made payments to some of the local officials in exchange for an opportunity to sell their products in local government buildings and at sporting events, many of which have been off-limits to Premier Drinks. This lack of access has put a dent in the sales figures of Premier Drinks, and the company is now seeking guidance from Enhanced Analytics as to how to proceed. The executive team of Enhanced Analytics, led by the CEO, will be meeting to review options, next week. In your own words, prepare a report for the company's executives, containing the following sections (do not worry about being right or wrong; simply offer your perspective on the company’s situation and your recommendation):

3. Decision Options - an outline of 4 specific courses of action / decisions that your client can make to solve the problem. The purpose of this section is to get a clear overview of the options available to management. Because the company has limited resources, management will have to pick the best option

4. Decision - a clear recommendation, outlining which one of the 4 options is the best

5. Justification - a clear, concise justification of your decision from #4

1. Consider a US company that imports German goods. What effect will a sudden depreciation of the dollar relative to the euro have on the P/E ratio of the U.S. company? Discuss the effect both the possibilities—the company being able to completely pass through the dollar depreciation to its customers and the company being unable to completely pass through the dollar depreciation to its customers. (5 points)

Pepper Company acquired 80 percent of Salt Company's stock at underlying book value on January 1, 2018. Pepper Company acquired 80 percent of Salt Company's stock at underlying book value on January 1, 2018. At that date, Salt reported common stock outstanding of $1,050,000 and retained earnings of $840,000; the fair value of the noncontrolling interest was equal to 20 percent of the book value of Salt Company. Salt Co. sold equipment to Pepper Co. for a $720,000 on December 31, 2018. Salt Co. had originally purchased the equipment for $800,000 on January 1, 2015, with a useful life of 10 years and no salvage value. At the time of the purchase, Pepper Co. estimated that the equipment still had the same remaining useful life. Both companies use straight-line depreciation. Pepper sold land costing $132,000 to Salt Company on June 28, 2019, for $178,000.

Textbook: Custom edition of Advanced Financial Accounting,12th Edition, Christensen, Cottrell and Budd; Mc-Graw Hill.

Required:

a.) Prepare Pepper's journal entries related to intercompany sale of land and equipment for 2019.