Discussion Questions: Tell Them We Are Rising

Why were different HBCUs founded?

Name some organizations involved in starting HBCUs?

Why was education so important to newly freed slaves?

Why are the HBCUs primarily found on the east coast with a high percentage in the south?

Suppose a recent random sample of employees nationwide that have a 401(k) retirement plan found that 22% of them had borrowed against it in the last year. A random sample of 130 employees from a local company who have a 401(k) retirement plan found that 16 had borrowed from their plan. Based on the sample results, is it possible to conclude, using αα = .05, that the local company had a lower proportion of borrowers from its 401(k) retirement plan than the 22% reported nationwide? Round all numeric results to 3 decimal places.

1. Write the hypotheses to test if the proportion of employees borrowing from their plan is less than the percentage reported nationwide.
H0: The proportion of employees who have borrowed from their plan is （less than /more than / the same as) the 22% reported nationwide. The difference (is/ is not ) due to chance.

HA: The proportion of employees who have borrowed from their plan  ( is less than / more than / the same as )the 22% reported nationwide. The difference ( is/ is not ) due to chance.

2. Calculate the proportion of employees in the sample who borrowed from their retirement plan.
p̂ =

3.Describe a setup for a simulation that would be appropriate in this situation and how the p-value can be calculated using the simulation results. To setup a simulation for this situation, we let each employee be represented with a card. We take 100 cards, ( ) black cards represent employees who have borrowed from their plan and ( ) red cards represent employees who have not. Shuffle the cards and draw with replacement ( ) cards representing the random sample of customers. Calculate the proportion of  ( red/ black )cards in the sample and call it p̂sim. Repeat 3,000 times and plot the resulting sample proportions. The p-value will be the proportion of simulations where p̂simp^sim is  (greater than/ less than/ further from 0.22 than) ( ) .

Inductive Reasoning Examples

For each of the following enumerative inductions, (1) identify the target group, sample, and relevant property; (2) indicate whether the argument is strong or weak; and (3) if it’s weak, say whether the problem is a sample that’s too small, not representative, or both. Assume that the information in the premises of each argument is true.

2. Most people are fed up with celebrities who get on their soapbox and air their political opinions. When people on the street have been asked by TV reporters how they feel about this issue, they almost always say that they wish celebrities would keep their opinions to themselves.

Target group:

Sample:

Relevant property:

This argument is              strong                  weak

If weak, it’s weak because:

3. Doctors used to think that anti-arrhythmic drugs were the cure for irregular heartbeats. They over-prescribed these drugs and fifty thousand patients died. Doctors used to believe that the cure for ulcers was a bland diet, but that turned out to be wrong too. Every new treatment we see these days sounds great, but history tells us that they will all turn out to be worthless.

Target group:

Sample:

Relevant property:

This argument is              strong                  weak

If weak, it’s weak because:

4. I’ve asked at least a dozen first-year students at this university whether the U.S. should go to war with “terrorist” countries, and they all have said no. So, most of the students at this university are against such a militant policy.

Target group:

Sample:

Relevant property:

This argument is              strong                  weak

If weak, it’s weak because:

5. A random, nationwide poll of several thousand-gun owners shows that 80% of them are opposed to gun-control laws. Thus, most adults oppose gun-control laws.

Target group:

Sample:

Relevant property:

This argument is              strong                  weak

If weak, it’s weak because:

6. In every winter for the past twenty years Buffalo has received several feet of snow. Therefore, Buffalo is likely to get several feet of snow in the next fifty winters.

Target group:

Sample:

Relevant property:

This argument is              strong                  weak

If weak, it’s weak because:

14. Emily, who lives in Indiana, volunteered to travel to Louisiana in March to work on a home-building project for
Habitat for Humanity (a qualified charitable organization). She was in Louisiana for three weeks. She normally
makes $500 per week as a carpenter’s assistant and plans to deduct $1,500 as a charitable contribution. In addition,
she incurred the following costs in connection with the trip: $600 for transportation, $1,200 for lodging, and $400 for
meals. What is Emily’s deduction associated with this charitable activity?

In 2018, Joanne invested $90,000 for a 20% interest in a limited liability company (LLC) in which she is a material
participant. The LLC reported losses of $340,000 in 2018 and $180,000 in 2019. Joanne’s share of the LLC’s losses
was $68,000 in 2018 and $36,000 in 2019. How much of these losses can Joanne deduct?

Rex and Dena are married and have two children, Michelle (age 7) and Nancy (age 5). During 2018, Rex earned a
salary of $24,500, received interest income of $300, and filed a joint income tax return with Dena. Dena had $0 gross
income. Their earned income credit for the year is:

Costco is an American wholesale corporation which has expanded its business internationally. a) Costco currently needs to buy Australian dollars to be used to open another store in Melbourne. The quote advertised by a local foreign exchange dealer in New York is AUD 1= USD 0.6690-0.6700 1) What is the commodity currency in the advertised quote? Is it a direct quotation or an indirect quotation? [1 mark] ii) What is the rate at which Costco can exchange US dollars into Australian dollars? Explain why? [2 marks] iii) If Costco has USD $10,000,000, how much AUD can it be exchanged for given your answer to part a) 11)? [1 mark] b) At the end of each financial year Costco needs to convert its profit earned in Australia into USD. i) What are the up-side and down-side foreign exchange risks Costco may have to face? [2 marks]
ii) If the Australian dollar depreciates by 20 pips in both the bid and offer rate at the end of this financial year, what is the rate at which Costco exchanges Australian dollars into US dollars? Explain why (In your discussion you need to identify the new quote after the depreciation of AUD against USD) [3 marks] iii) If Costco has AUD $500,000, how much US dollars can it be exchanged for given your answer to part b) ii)? [1 mark

1. Which of the following statements regarding GAAR is true?

Multiple Choice

• The purpose of GAAR is to catch tax evaders.

• When an avoidance transaction takes place, the anti-avoidance rule is automatically applied in all circumstances.

• Canada Revenue Agency states that "A transaction will not be an avoidance transaction if the taxpayer establishes that it is undertaken primarily for bona fide business, investment or family purposes."

• Individuals who organize their affairs in order to pay as little tax as possible will automatically be subject to GAAR.

2. The CEO at Big Company Corporation has decided to sell a piece of capital equipment after the company's year-end in order to avoid paying capital gains tax this year. Which tax planning method will the CEO be using?

Multiple Choice

• Transferring income to another entity.

• Converting the nature of income from one type to another.

• Shifting income from one time period to another.

• This is a form of tax evasion and is not allowed.

3. Income tax is calculated for which of the following jurisdictional groups?

Multiple Choice

• Municipal, provincial, and federal

• Municipal, federal, and foreign

• Provincial, federal, and foreign

• Municipal, provincial, and foreign

4. Which of the following is not considered to be a separate entity for tax purposes in Canada?

Multiple Choice

• An individual

• A proprietorship

• A corporation

• A trust

Note- introduction to taxation

During Jimmy Carter's presidency, increases in the Consumer Price Index (CPI) reached double digits. In order to combat this problem, the Carter administration launched a Wage-Price Guidelines program in which businesses could not increase prices or wages above a certain percentage or the company would be prohibited from doing business with the federal government. A company also could find itself on the prohibited list if it earned profits higher than six percent. The Carter administrated argued that higher profits are responsible for higher prices so that if a company made lower profits, its prices would be lower, too. Given what we have covered this term, did the Carter administration use accurate economic analysis and would its prohibition on "high" profits result in lower prices? Why or why not?

Case 1.2: Time Value of Money and Firm Valuation Smokestack Technologies, Inc. (STI), is a company in a declining industry. The company is currently earning profits of $10 per share of common stock, but the company's profitability is expected to decline by 10% annually forever. The company intends to fully distribute whatever profits are earned to stockholders annually in the form of dividends, beginning with an immediate payment of $10 per share now and continuing payouts on this date each year from now. The relevant interest rate is 10% annually. A popular investors’ newsletter issues a recommendation to sell STI stock at its current price of $47 per share, based on the argument that the stock's value can only go down in the future as its profits decline. Do you agree with the recommendation to sell? Explain.