Consider a firm that exists in a world with two periods (time 0 and time 1) and two equally likely states of the world at time 1. At time 0 the firm’s securities are traded. At time 1 the state is revealed. In the up-state the firm’s assets are worth $120 and in the down-state they are worth $40. The firm has debt outstanding with a face value of $60. Assume that the required rate of return is zero and investors are risk neutral. a) Compute the market value of debt, equity and the total market value of the company at time 0. b) Suppose that the company issues some additional debt with a face value of $40. This debt is pari passu (equal priority) with respect to the existing debt and the proceeds are invested in a zero NPV riskless project (i.e., the money is put in a safe box). How much money is the company able to raise with this debt issue?

On January 1, 2021, the general ledger of Big Blast Fireworks includes the following account balances:

The $42,000 beginning balance of inventory consists of 420 units, each costing $100. During January 2021, Big Blast Fireworks had the following inventory transactions:

The following information is available on January 31, 2021.

1. At the end of January, the company estimates that the remaining units of inventory are expected to sell in February for only $100 each.
2. The company estimates future uncollectible accounts. The company determines $5,200 of accounts receivable on January 31 are past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
3. Accrued interest expense on notes payable for January. Interest is expected to be paid each December 31.
4. Accrued income taxes at the end of January are $13,500.

Prepare a classified balance sheet as of January 31, 2021. (Amounts to be deducted should be indicated with a minus sign.)
  

Assignment: A complete analysis should include a summary of the case, a SWOT analysis, a financial analysis, identification of strategic issues and challenges, and a strategic plan. You must support your case analysis with at least 3 sources in addition to the textbook.

The case describes the business model of one of the world’s largest e-tailers, Amazon.com, Inc. (Amazon). Amazon had been at the forefront of innovation, adding and refining technology and changing the way customers shopped. It had a sustainable and innovative business model that intensely focused on its long-term growth opportunities as opposed to short-term profit margins. The case discusses the business model innovation at Amazon and how it evolved from just an online bookstore into one of the largest e-commerce platforms in the world where customers could find and discover anything they wanted to buy online in a more convenient way. The case outlines the four pillars of Amazon’s business model — low prices, wide selection, convenience, and customer service. Amazon attracted customers through low prices, prompt delivery, an ever-expanding array of services and products, and exemplary customer service.In 2015, Seattle-based e-commerce giant Amazon.com, Inc.(Amazon) surprised investors by posting an unanticipated second quarterly profit in a row after struggling with profitability the previous year. In the third quarter ended September 30, 2015, Amazon’s revenues increased by 20% to US$23.2 billion, while net income was US $79 million, compared with a net loss of US$437 million in the corresponding quarter of the previous year. The revenue growth was attributed to the company’s rapidly growing cloud-computing business, higher sales in North America, and initiatives to attract more customers. On the back of these unexpected quarterly results, Amazon shares surged, making it the most valuable retailer in the world surpassing Wal-Mart Stores Inc as of July 2015. BUILDING AND EVOLVING THE BUSINESS MODEL Over the years, Amazon had disrupted the online retail industry and transformed itself from an e-commerce player to a powerful digital media platform focused on growth and innovation. It constantly reinvented its business model and found new ways to create value for its customers. According to analysts, Amazon’s business model was innovative because it combined the company’s online retail expertise with its ability to understand the needs of its customers. Amazon moved beyond books to foray into completely new product categories such as e-readers and enterprise cloud computing services. AMAZON’S GROWTH WHEEL In 2001, Bezos and his employees outlined a virtuous cycle called the “Amazon Flywheel”, which they believed powered their business. Bezos once invited well-known author and business consultant Jim Collins (Collins) to participate in Amazon’s executive retreat in 2001 to discuss the company’s future. As part of the discussions, Collins told Bezos and his executives that they had to decide what they were best at. Drawing on Collins’s concept of a flywheel, Bezos and his executives drew their own virtuous circle placing customer experience at the core of Amazon’s flywheel. Internally, it was referred to as Bezos’ napkin diagram as he drew it on a napkin... GROWTH NOW, PROFITS LATER Amazon generated revenues by selling millions of products to customers through its retail website and by charging third party sellers who sold products on Amazon’s website. It also served as a platform for independent publishers to publish books on Kindle with a 35% or 70% royalty option. In addition, Amazon generated revenue from its cloud business by providing web technology infrastructure to developers and enterprises. It followed a high fixed costs and low marginal costs business model. According to Eugene Wei, a former Amazon employee... RESOURCES AND PROCESSES THAT SUPPORT THE STRATEGY Amazon was one of the most innovative companies in the US. From the beginning, it had been at the forefront of innovation, adding and refining technology and changing the way customers shopped. On invention being a second nature at Amazon, Bezos said... CHALLENGES According to industry observers, Amazon over the years had disrupted other online retailers and brick-and-mortar stores and leveraged its e-commerce operations to become a retail Goliath. However, some critics felt that Amazon was too ambitious as it had been growing alarmingly and investing heavily. They felt that the strategy could backfire and that Amazon needed to be selective about the opportunities it pursued as it could not take customers and the competition for granted... THE ROAD AHEAD Going forward, the company planned to launch new digital products and service categories, build more fulfillment centers, power AWS, and expand the Kindle Fire Ecosystem. The company also planned to hire 100,000 people in North America for the holiday season.

There are 3 industrial firms in Happy Valley:

The government wants to reduce pollution to 150 units and gives each firm 50 pollution permits.

1. What is the total cost of pollution abatement if the permits are not tradable?

2. What is the total cost of pollution abatement if the permits are traded at a

   price of $20 each?

There are 3 industrial firms in Happy Valley:

The government wants to reduce pollution to 150 units and gives each firm 50 pollution permits.

1. What is the total cost of pollution abatement if the permits are not tradable?

2. What is the total cost of pollution abatement if the permits are traded at a

   price of $20 each?

There are 3 industrial firms in Happy Valley:

The government wants to reduce pollution to 150 units and gives each firm 50 pollution permits.

1. What is the total cost of pollution abatement if the permits are not tradable?

2. What is the total cost of pollution abatement if the permits are traded at a

   price of $20 each?

Journalize the attached adjusting entries

Prepare the necessary adjusting entries at December 31 for Staples, Inc. based on the information from problem 1 and the following information:

1. On November 1, 2013 the company borrowed 65,000 from a bank. The note requires principal and interest at 10% to be paid on April 30, 2014.

2. On December 1, 2013 the company received $3,000 in cash from another company that is renting office space in Staples’ building. The payment, representing rent for December and January was credited to Sales Revenue.

3. On September 1, 2013 the company paid an insurance company $4,500 for a nine month insurance policy. The entire $4,500 was debited to Prepaid Insurance.

What three kinds of illicit drugs are used most commonly by persons aged 12 and older, according to 2006 data? Can you suggest any methods for prevention of illegal substance use among young people?

What is the USA PATRIOT Act, and what are the four traditional tools of surveillance expanded with the Act?

How has the Reauthorized USA PATRIOT ACT of 2006 changed the legal definitions of terrorism and responded to critiques against the original law?