1. Given the choice to either go to work or sleep in, you choose to sleep in. What is the opportunity cost of this choice? a. The cost of your bed, sheets, pillow and rent b. The wages you would have earned if you’d gone to work c. The homework you did yesterday d. Both going to work and sleeping in.
2. Who has the Absolute Advantage in producing chairs and tables? Who has the comparative advantage in producing? You may want to calculate the opportunity cost for Milo and Jenna to determine Comparative Advantage
|
Making a Table |
Making a Chair |
|
|
Jenna |
2 hours |
4 hours |
|
Milo |
4 hours |
6 hours |
In: Economics
The chartered financial analyst (CFA) is a designation earned after taking three annual exams (CFA I,II, and III). The exams are taken in early June. Candidates who pass an exam are eligible to take the exam for the next level in the following year. The pass rates for levels I, II, and III are 0.58, 0.75, and 0.81, respectively. Suppose that 3,000 candidates take the level I exam, 2,500 take the level II exam and 2,000 take the level III exam. A randomly selected candidate who took a CFA exam tells you that he has passed the exam. What is the probability that he took the CFA I exam? Probability =
In: Math
After years of slumping sales, Toys R Us filed Chapter 11 last September to relieve a $5 billion debt burden. It said it would use $3 billion in bankruptcy financing to revamp its stores. But on March 15, Toys R Us asked the bankruptcy court for permission to “begin an immediate and orderly liquidation” of its U.S. stores. Toys R Us’ principal creditors have determined that the best way to maximize their recoveries is to liquidate the existing inventory in all of the debtors’ 735 remaining U.S. stores and begin an orderly wind-down of the U.S. operation.
So, what factors do you think led to the demise of Toys R Us? Does filing for bankruptcy necessarily imply that a company will be liquidated? Why is the liquidation of Toys 'R' Us expected to have such a significant impact on Hasbro Inc. and Mattel Inc.? What will happen to the amounts owed by Toys R Us to Mattel, Hasbro, and others in liquidation?
In: Finance
In June 2014, Medtronic, a Minneapolis-based medical device manufacturer, announced that it would join the tax-inversion acquisition parade. A tax-inversion acquisition occurs when a corporation acquires a target firm based in a lower-tax country and, as part of the transaction, moves its legal headquarters to the target firm's nation. After making this move, the combined corporation's taxes are based on the lower rate of its new home country. This move is perfectly legal according to U.S. law as long as the target firm's shareholders own at least 20 percent of the combined firm. About 50 U.S. corporations have undertaken tax inversions over the last 10 years, but the rate of occurrence appears to be increasing.
Medtronic acquired Covidien, an Irish-based medical equipment manufacturer, in January 2015 for S49.9 billion, and moved its legal home to Ireland. Not much else changed. Medtronic kept its corporate headquarters in Minneapolis. But Medtronic benefits from the move in two primary ways. First, while the tax rate on profits of U.S_ corporations is 35 percent, the tax rate on Ireland-based corporate profits is only 12.5 percent. Additionally, the United States is one of only six developed economies that tax the global profits of corporations. If a multinational corporation makes profits in a foreign country, the firm pays taxes on those profits to the foreign government at the rate the foreign country charges. For corporations based in most countries, that is the end of their tax obligations. However, if a U.S. -based firm wants to bring those profits back to its home country either to invest in new facilities or to distribute dividends to its stockholders, it has to pay income tax on the profits earned in foreign markets. The rate the firm pays is the difference in the tax rate in the foreign country and the U S. rate. For example. if Medtronic earned income in Ireland and then repatriated the profits to the United States, it would face a 22.5 percent additional tax rate, the difference between the U.S. and Irish corporate tax rates. Since Medtronic has accumulated S13 billion in earned profits abroad, it could face S-3_5 billion to S4 billion in taxes if it brought those profits home. Thus, corporations, such as Medtronic, undertake tax inversions to save on taxes and, by extension, benefit their shareholders by being able to invest more in the firm to help it grow and/or return higher levels of dividends to shareholders.
Critics, however, point out that these firms are choosing not to pay taxes at the U.S. rates even though they have benefited and will continue to benefit from being American corporations. While inverters change their legal residence, they typically keep their corporate headquarters in the United States and stay listed on a U.S. stock exchange. As a result, they benefit from America's deep financial markets, military might, intellectual property rights and other legal protections, intellectual and physical infrastructure, substantial human capital base, and national research programs. For example, Medtronic won $484 million in contracts with the US. government in recent years and plans to complete these contracts even though it will no longer be an American company, it hires students from top-notch American universities; and it files patents for all of its new technologies in the United States. Critics see the decision to move to a lower-tax country as unethical and unpatriotic. Jack Lew, the former U.S. Treasury secretary, echoed this perspective when he stated, "We should prevent companies from effectively renouncing their citizenship to get out of paying taxes. What we need is a new sense of economic patriotism, where we all rise and fall together."
Discussion Questions
1. Was Medtronic justified in moving its legal home to Ireland?
2. How should firms balance the desire to limit taxes to maximize cash generation with the need to be a good corporate citizen?
3. How should the US. government respond to the increasing frequency of tax inversions?
In: Economics
Bodin Company manufactures finger splints for kids who get
tendonitis from playing video games. The firm had the following
inventories at the beginning and end of the month of
January.
| January 1 | January 31 | |||||
| Finished goods | $ | 124,000 | $ | 117,000 | ||
| Work in process | 235,000 | 251,000 | ||||
| Raw material | 133,000 | 124,000 | ||||
The following additional data pertain to January
operations.
| Raw material purchased | $ | 191,000 | |
| Direct labor | 350,000 | ||
| Actual manufacturing overhead | 175,000 | ||
| Actual selling and administrative expenses | 115,000 | ||
The company applies manufacturing overhead at the rate of 60 percent of direct-labor cost. Any overapplied or underapplied manufacturing overhead is accumulated until the end of the year.
Required:
1. Compute the company’s prime cost for January.
2. Compute the total manufacturing cost for January.
3. Compute the cost of goods manufactured for January.
4. Compute the cost of goods sold for January.
5. Compute the balance in the manufacturing overhead account on January 31. Debit or credit?
In: Accounting
KOMSIS TRADING CO is a Turkish Company who imports MUSIC-SETS from China. KOMSIS is going decide on options of this import. For realization of import KOMSIS will have different options on financing.
Now, you are preparing a presentation to the Board of the company. They will listen to your presentation and decide on which is the best option.
You are the Finance Manager and you will present the expected costs and possible revenues from this deal. Please explain, make comparison of all financing options in detail and propose the board, the most profitable option.
GENERAL TERMS
IMPORT DETAILS
FINANCING
CHOOSING BEST FINANCING OPTIONS
China Company is working with Bank of China. They are charging following costs
QUESTION : WHICH OPTION IS BETTER ?
SALE PRICE CALCULATION WHEN GOODS ARE SOLD
QUESTION : WHAT IS THE SALE PRICE OF IMPORTED GOODS ?
DISCOUNTING CHEQUE
QUESTION : A. What is the discounted value of the cheque ?
B. How much will factoring company pay to Komsis ?
|
FORIGN CURRENCY EXCHAGE |
|||||
|
FX RATES |
BANK NOTE RATES |
||||
|
USD / TL |
DATE |
BUY RATE |
SELL RATE |
BUY RATE |
SELL RATE |
|
01.03.2018 |
3,8082 |
3,8150 |
3,8055 |
3,8208 |
|
In: Accounting
KOMSIS TRADING CO is a Turkish Company who imports MUSIC-SETS from China. KOMSIS is going decide on options of this import. For realization of import KOMSIS will have different options on financing.
Now, you are preparing a presentation to the Board of the company. They will listen to your presentation and decide on which is the best option.
You are the Finance Manager and you will present the expected costs and possible revenues from this deal. Please explain, make comparison of all financing options in detail and propose the board, the most profitable option.
GENERAL TERMS
IMPORT DETAILS
FINANCING
CHOOSING BEST FINANCING OPTIONS
China Company is working with Bank of China. They are charging following costs
QUESTION : WHICH OPTION IS BETTER ?
SALE PRICE CALCULATION WHEN GOODS ARE SOLD
QUESTION : WHAT IS THE SALE PRICE OF IMPORTED GOODS ?
DISCOUNTING CHEQUE
QUESTION : A. What is the discounted value of the cheque ?
B. How much will factoring company pay to Komsis ?
|
FORIGN CURRENCY EXCHAGE |
|||||
|
FX RATES |
BANK NOTE RATES |
||||
|
USD / TL |
DATE |
BUY RATE |
SELL RATE |
BUY RATE |
SELL RATE |
|
01.03.2018 |
3,8082 |
3,8150 |
3,8055 |
3,8208 |
|
In: Accounting
Bodin Company manufactures finger splints for kids who get tendonitis from playing video games. The firm had the following inventories at the beginning and end of the month of January. January 1 January 31 Finished goods $ 125,000 $ 117,000 Work in process 237,000 251,000 Raw material 134,000 124,000
The following additional data pertain to January operations. Raw material purchased $ 190,000 Direct labor 350,000 Actual manufacturing overhead 170,000 Actual selling and administrative expenses 115,000 The company applies manufacturing overhead at the rate of 60 percent of direct-labor cost. Any overapplied or underapplied manufacturing overhead is accumulated until the end of the year.
Compute the company's prime cost for January
Computer total Manufacturing Costin January
Compute Cost of Good Manufactured in January.
Compute Cost of Goods Sold for January
Compute the balance in the manufacturing overhead account on January 31. Debit or credit?
In: Accounting
I am writing a paper on Financial Restructuring. I am required to pick a company that is in [potential] trouble of defaulting/bankruptcy. I have chosen Toys R Us.
I am required to:
1) Analyze the company's (Toys R Us) financial history and current financial situation.
2) Propose a financial restructuring proposal.
It is my understanding that I need to look at all possible financial statements, income statements, cash flows, and use financial tools to "financially restructure" and propose a "fix" to save Toys R Us.
What are the ways in which a company can turn itself around through the use of these financial restructuring methods?
I am not sure what to look into exactly, and how to approach this.
I am struggling with the thought of having to write 3pages on this....
In: Finance
I appreciate your explanation. I found different answers on these questions and it can be confusing.
7. For a beneficiary to receive a qualified distribution from a
Roth IRA, who must meet the five-year requirement?
A. The beneficiary, after taking distributions.
B. Both the owner and the beneficiary.
C. Either the owner or the beneficiary, before taking
distributions.
8. Which statement about the American Opportunity Tax Credit and
the lifetime learning credit is FALSE?
A. A portion of the American Opportunity Tax Credit is a refundable
credit.
B. An eligible individual for the lifetime learning credit may be
enrolled part-time.
C. Only four-year universities are eligible institutions for the
American Opportunity Tax Credit and the lifetime learning
credit.
In: Accounting