1. Mr. Brown decided last year to raise chickens in his back yard. He built a chicken coop next to his property line with Mr. Adams. Mr. Adams finds the chickens annoying because of the smell, the noise they make, and because their feathers end up in his pool and can clog the filtering system.

It would be worth $500 to Mr. Adams to be free of the chicken noise and smell, and the need to frequently skim feathers from his pool. Mr. Brown could move his chicken coop to the other side of the yard for $350, which would cut the value of Mr. Adams utility loss from $500 to $250. Mr. Adams values the ability to keep his chickens at $400.

(3) a. Describe this situation using the economist’s concept of an externality

(3) b. Describe this situation in terms of conflicting property rights claims.

(4) c. What is the socially efficient outcome of this situation:

(i). No change is made

(ii). The chicken coop is moved

(iii). Adams gives up raising chickens

Explain your choice, using numbers.

(4) d. Assume that after discussing the situation and consulting lawyers, Adams and Brown learn that the law in their city is unclear regarding nuisance due to neighbor’s chickens. So, they go to court. The judge rules that Adams has every right to raise chickens and keep the coop where it is. Assuming that there are no transaction costs to bargaining between Smith and Adams, what will be the final outcome of the situation after this decision? Explain your answer.

(i). No change is made

(ii) The chicken coop is moved

(iii). Adams gives up raising chickens

(2) e.      T   F     In the legal case just described, Mr. Brown was the plaintiff.

(2) f.     T     F     According to the Coase theorem, even though this question assumes that

there are no transaction costs, different decision by the court would lead to different levels of relative welfare for Adams and Brown.

Maria has built a cafeteria called "Princess of Gourmai and More" since 1995. Amira runs her project that provides coffee from the most delicious coffee in the city. It serves around 800 cups of coffee a day, along with special soups, ready-made Italian sandwiches, and a large selection of delicious cheese cakes. Maria noticed that despite the store's popularity, she always maintains nearly the same revenue. Maria has contacted your staff, who is affiliated with a consulting firm, in her city to advise the way the cafeteria works.

Maria said: “Many community college students visit us next to the cafeteria, as well as many retired clients who live next door and a large group of employees who work in the companies deployed next to the cafeteria. Every day our customers have only 30 minutes to eat their meal and have coffee so we must be fast. When preparing their meals, as it is the worker at the cafeteria who receives the customer’s order and enters the order on the cash box device, as well as receives the money and deposits it in the box and provides the customer with his meal.

The Royal Director Maria added: "We have one cash box that all workers, including myself, are handling to respond to customer requests. This cash box is not of the new type developed but it can track the different categories of meals and coffee, however the worker who receives the order must press every time." He receives the order on the button that pertains to the specific category requested by the customer (coffee, soup, sandwich, cakes) There is an internal tape in the box device that records and maintains a record of all transactions. The customer receives a receipt only when requested to deliver. The number of cafe workers is four along with the manager Maria Two workers work N in the morning from seven o'clock to three o'clock in the evening and two others from three o'clock to eleven at night time. "

Maria also said: “I open the cash box twice a day at the end of the morning period at three o'clock in the evening and at the end of the evening period at eleven o'clock at night. When I open the fund I help workers before they leave to open the cash box and calculate the amount of money and compare it to the total recorded on the tape stored Inside the fund When there is a difference between the money withdrawn from the fund and the total recorded on the tape, I recalculate the money again. "

The owner Maria told your group that since the beginning of the opening of the store, she did not face cases of theft, but rather discovers that the differences that occurred previously between the cash available in the fund and the total amount of money recorded on the tape are usually recording for an employee a different amount than the amount inadvertently received. For example, he records $ 18 instead of the $ 1.8 received amount.

Maria sends the tape and receipts manually to the accountant to make adjustments and also sends him all purchase invoices from the materials she needs to make coffee, sandwiches, soups and cakes. Note that Maria uses the economic quantity method in demand to maintain the stock of materials, given that the daily sales recorded by the cafeteria are close.

Read the case and identify weaknesses, based on the information provided by Maria and the cafeteria manager.

write the necessary recommendations for each weakness

Second Life is a 3-D virtual world entirely built and owned by its residents. Since opening to the public in 2003, it has grown explosively and today is inhabited by millions of people from around the globe. This new virtual world could become the first point of contact between companies and customers and could transform the whole customer experience. Since it began hosting the likes of Adidas, Dell, Reuters and Toyota, Second Life has become technology's equivalent of India or China - everyone needs an office and a strategy involving it to keep their shareholders happy. But beyond opening a shiny new building in the virtual world, what can such companies do with their virtual real estate?

Like many other big brands, PA Consulting has its own offices in Second Life and has learned that simply having an office to answer customer queries is not enough. Real people, albeit behind avatars, must be staffing the offices - in the same way having a Web site is not enough if there is not a call centre to back it up when a would-be customer wants to speak to a human being. In future, the consultants believe call centers could one day ask customers to follow up a phone call with them by moving the query into a virtual world.
Unlike many corporate areas in the virtual world, the NBA Headquarters incorporates capabilities designed to keep fans coming back, including real-time 3-D diagrams of games as they are being played.

PROJECT FOCUS:

You want to create a presence on Second Life for the cafe. Create a CRM strategy for doing business in the virtual world. Here are a few questions to get you started:

• How can your virtual world help business in the real world?
• How will customer relationships be different in a virtual world?
• What is your strategy for managing customer relationships in this new virtual environment?
• How will supporting Second Life customers differ from supporting traditional customers?
• How will supporting Second Life customers differ from supporting Web site customers?
• What customer security issues might you encounter in Second Life?
• What customer ethical issues might you encounter in Second Life?

Some cultures have built-in mechanism that allow people to take more control over their own health care and outcomes in an accepted way. How do you feel about the Hmong rejecting hospital care and refusing medication instructions? When do you have ultimate control over your health outcomes and under what circumstances are your choices limited?  Is the decision to end one's own life a choice that everyone in America should have? How does assisted suicide different from the choice to elect Hospice care?

Note: The built-in character analysis functions (isdigit(), islower(),
etc.) may not be used.

Exercise 6.1 Write to an output file
Open an output file (stream) and write your identifying information to the
associated output file using a function. Put your standard output informa-
tion in a function named ShowHeader(). The file stream must be passed by
reference to the function. To do this, an & (ampersand) is used between the
data type (ofstream) and the name of the argument (I like to use fOut for
output file stream objects and fIn for input file stream object names).

Exercise 6.2 Read from an input file
Read/Process an input file a character at a time. Open an input file (stream)
and read a single character on each pass through a loop (a while() loop is
probably easiest) until the end of file is reached. After reading the character,
write it to the output file created earlier. The output should contain the
same characters as the input file.

Exercise 6.3 Character Analysis
Suggestion: Develop the remainder of this program in piecewise manner–
specifically, add one character analysis operation at a time, before adding
the next.
Analyze the characters in a file using functions to display their charac-
teristics, e.g., lower case, digit etc. The logic for analysis will be inside the
loop above.
Specifically, test if the character:
• is a letter.
• test if it is lower case or upper case.
• if the character is a letter, test if it is a vowel or consonant.
• is a digit.
• if the character is a digit, test if the value is odd or even.
• is a punctuation character.
• is a logical operator symbol.
Write a short function for most operations in the list above. If a character
is a letter, then it is either upper or lower case, so we only need to write one
function to test the case of the character. Do not use the built-in functions.

Note: there are no I/O (input/output) operations in the functions, only a
single character is examined.

Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost.

Last year, the company sold 48,000 of these balls, with the following results:

Required:

1. Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year’s sales level.

2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls?

3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $161,000, as last year?

4. Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs?

5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls?

6. Refer to the data in (5) above.

a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $161,000, as last year?

b. Assume the new plant is built and that next year the company manufactures and sells 48,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage.

Complete this question by entering your answers in the tabs below.

Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls? (Round "CM Ratio" to 2 decimal places and "Unit sales to break even" to the nearest whole unit.)

Refer to the data in Required (2). If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $161,000, as last year? (Round your answer to the nearest whole unit.)

Refer again to the data in Required (2). The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs? (Round your answer to 2 decimal places.)

Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls? (Round "CM Ratio" to 2 decimal places and "Unit sales to break even" to the nearest whole unit.)

Show less

If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $161,000, as last year? (Round your answer to the nearest whole unit.)

Assume the new plant is built and that next year the company manufactures and sells 48,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage. (Round "Degree of operating leverage" to 2 decimal places.)

2.

Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost.

Last year, the company sold 62,000 of these balls, with the following results:

Required:

1. Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year’s sales level.

2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls?

3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $194,000, as last year?

4. Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs?

5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls?

6. Refer to the data in (5) above.

a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $194,000, as last year?

b. Assume the new plant is built and that next year the company manufactures and sells 62,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage

Req1

Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year’s sales level. (Round "Unit sales to break even" to the nearest whole unit and other answers to 2 decimal places.)

CM Ratio

Unit Sales to Break Even

Degree of Operating Leverage

Req2

Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls? (Round "CM Ratio" to 2 decimal places and "Unit sales to break even" to the nearest whole unit.)

CM Ratio

Unit Sales to Break Even

Req3

Refer to the data in Required (2). If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $194,000, as last year? (Round your answer to the nearest whole unit.)

Number of Balls

Req4

Refer again to the data in Required (2). The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs? (Round your answer to 2 decimal places.)

Selling Price

Req5

Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls? (Round "CM Ratio" to 2 decimal places and "Unit sales to break even" to the nearest whole unit.)

CM Ratio

Unit Sales to Break even

Req6a

If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $194,000, as last year? (Round your answer to the nearest whole unit.)

Number of Balls

Req6b

Assume the new plant is built and that next year the company manufactures and sells 62,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage. (Round "Degree of operating leverage" to 2 decimal places.)

Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost.

Last year, the company sold 42,000 of these balls, with the following results:

Required:

1. Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year’s sales level.

2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls?

3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $154,000, as last year?

4. Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs?

5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls?

6. Refer to the data in (5) above.

a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $154,000, as last year?

b. Assume the new plant is built and that next year the company manufactures and sells 42,000 balls (the same number as sold last year). Prepare a contribution format income statement and Compute the degree of operating leverage.

Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year’s sales level. (Round "Unit sales to break even" to the nearest whole unit and other answers to 2 decimal places.)

1.

2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls? (Round "CM Ratio" to 2 decimal places and "Unit sales to break even" to the nearest whole unit.)

3. Refer to the data in Required (2). If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $154,000, as last year? (Round your answer to the nearest whole unit.)

4. Refer again to the data in Required (2). The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs? (Round your answer to 2 decimal places.)

5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls? (Round "CM Ratio" to 2 decimal places and "Unit sales to break even" to the nearest whole unit.)

6A. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $154,000, as last year? (Round your answer to the nearest whole unit.)

6B. Assume the new plant is built and that next year the company manufactures and sells 42,000 balls (the same number as sold last year). Prepare a contribution format income statement and Compute the degree of operating leverage. (Round "Degree of operating leverage" to 2 decimal places.)

The Town of Brown has the following financial transactions:

1. The town council adopts an annual budget for the general fund estimating general revenues of $2.0 million, approved expenditures of $1.6 million, approved transfers pf $150,000.

2. The town levies property taxes of $1.5 million. It expects to collect all but 4% of these taxes during the year. Of the levied amount, $50,000 will be collected next year but after more than 60 days.

3. The town orders three new police cars at an approximate cost of $120,000.

4. A transfer of $60,000 is made from the general fund to the debt service fund.

5. The town makes a payment on a bond payable of $50,000 along with $15,000 of interest using the money previously set aside.

6. The Town of Brown issues a $3 million bond at face value in hopes of acquiring a building to convert into a high school.

7. The two police cars are received with an invoice price of $115,000. The voucher has been approved and will not be paid for three weeks.

8. The town purchases the building for the high school for $2.5 million in cash and immediately begins renovating it.

9. Depreciation on the new police cars is computed at $35,000 for the period.

10. The town borrows $120,000 on a 30-day-tax anticipation note.

11. The Town of Brown begins a special assessment curbing project. The government issues $900,000 in notes at face value to finance this project. The town has guaranteed the debt if the assessments collected do not cover the entire balance.

12. A contractor completes the curbing project and is paid $900,000 as agreed.

13. The town assesses citizens $900,000 for the completed curbing project.

14. The town collects the special assessments of $900,000 in full and repays the debt plus $40,000 in interest.

15. The town receives a $20,000 cash grant from a regional charity to beautify a local park. The grant must be used to cover the specific costs that the town incurs.

16. The town spends the first $5,000 to beautify the park.

Question 1. – Please prepare journal entries for the town based on the production of fund financial statements.

Question 2 – Please prepare journal entries in anticipation of preparing government-wide financial statements.

McCormick & Company is considering a project that requires an initial investment of $24 million to build a new plant and purchase equipment. The investment will be depreciated as a modified accelerated cost recovery system (MACRS) seven-year class asset. The new plant will be built on some of the company's land, which has a current, after-tax market value of $4.3 million. The company will produce bulk units at a cost of $130 each and will sell them for $420 each. There are annual fixed costs of $500 thousand. Unit sales are expected to be $150,000 each year for the next six years, at which time the project will be abandoned. At that time, the plant and equipment is expected to be worth $8 million (before tax) and the land is expected to be worth $5.4 million (after tax). To supplement the production process, the company will need to purchase $1 million worth of inventory. That inventory will be depleted during the final year of the project. The company has $100 million of debt outstanding with a yield to maturity of 8 percent, and has $150 million of equity outstanding with a beta of 0.9. The expected market return is 13 percent, and the risk-free rate is 5 percent. The company's marginal tax rate is 40 percent.

9. Find the IRR