Computation of deferred taxes under IFRS is slightly different from GAAP. For example, in the United Kingdom (which follows IFRS), companies use the crystallization approach. An equivalent concept in the United States is “realization.”

The concept underlying this “crystallization” approach is that companies recognize deferred income taxes only if the taxes are expected to crystallize. Therefore, if a liability is deferred indefinitely, then the present value of that liability is zero. No deferred tax liability is recognized if the accumulated deferred tax amount is expected to increase each year, thereby delaying indefinitely the ultimate liquidation of this obligation.

1. Compare and contrast the theory behind the “crystallization” approach with the inter-period allocation approach used in the U.S.
2. How might this same concept be applied to the recognition of liability for accounts payable? That is, if accounts payable are expected to increase each year, should the crystallization concept apply to this liability? Why or why not?
3. How reasonable does this approach seem? Explain.

Two of the main goals of International Consumer Law is to set a global minimum consumer protection standard and to remove obstacles to cross-border trade. The United Nations Guidelines on Consumer Protection (UNGCP) were promulgated to provide guidance as to the minimal standards of protection within the global market. The United Nations Conference for Trade and Development (UNCTAD) promotes those guidelines to member states. In addition to U.N. activity, the International Consumer Protection and Enforcement Network (ICPEN) was established in 1992 to promote international protection for consumers by creating a collaborative forum to address cross-border misconduct.

The UN Guidelines are designed with the intention of providing a inspirational model. Describe the fundamental principles upon which it is based. In addition, identify the long-term goals of the ICPEN in its effort to motivate cross-border traders to engage in acceptable conduct. Describe a couple of the mechanisms that the ICPEN use to encourage compliance.

CHERCRO Inc. is a startup. It is estimated that the company will not be paying any dividends for the coming 4 years. If the company distributes $3 per share 5 years from today, the growth rate of the dividends will be 2% per year going forward. If, instead the company distributes $2 per share at the 5th year, the growth rate of dividends will be 6% per year. As an investor of CHERCRO, which policy would you support if the market rate is 12%?
(Hint: the value of a share is the expected present value of the entire future dividend stream)

Voluntary export restraints provide for rich interplay between economics and politics. Let's look at two examples. In the first, the United States forced one key exporter, Japan, to limit its exports of automobiles. In the second, a small VER, again between the United States and Japan, grew to become a wide-ranging set of export limits that covered many textile and clothing products, involved many countries, and lasted for decades.

TEXTILES AND CLOTHING: A MONSTER

In 1955, a monster was born. In the face of rising imports from Japan, the U.S. government convinced the Japanese government to “voluntarily” limit Japan's exports of cotton fabric and clothing to the United States. In the late 1950s, Britain followed by compelling India and Pakistan to impose VERs on their clothing and textile exports to Britain. The VERs were initially justified as “temporary” restraints in response to protectionist pleas from import-competing firms that they needed time to adjust to rising foreign competition. But the monster kept growing.

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The 1961 Short-Term Arrangement led to the 1962 Long-Term Arrangement. In 1974, the Multifibre Arrangement extended the scheme to include most types of textiles and clothing. The trade policy monster became huge. A large and rising number of VERs, negotiated country by country and product by product, limited exports by developing countries to industrialized countries (and to a number of other developing countries).

The monster even had its own growth dynamic. A VER is, in effect, a cartel among the exporting firms. As they raise their prices, the profit opportunity attracts other, initially unconstrained suppliers. Production of textiles and clothing for export spread to countries such as Bangladesh, Cambodia, Fiji, and Turkmenistan. As these countries became successful exporters, the importing countries pressured them to enact VERs to limit their disruption to the managed trade.

The developing countries that were constrained by these VERs pushed hard during the Uruguay Round of trade negotiations to bring this trade back within the normal WTO rules (no quantitative limits, and any tariffs to apply equally to all countries—most favored nation treatment, rather than bilateral restrictions). The Agreement on Textiles and Clothing came into force in 1995 and provided for a 10-year period during which all quotas in this sector would be ended. On January 1, 2005, after almost a half century of life, the monster mostly died.

We say “mostly” because for a few more years a small piece of the monster lived on. As part of its accession agreement to the World Trade Organization, China accepted that other countries could impose China-specific “safeguards” if its rising exports of textiles or clothing harmed import-competing producers. As the United States phased out VERs, the U.S. government imposed such safeguards on some imports from China. By late 2005 a comprehensive agreement limited imports of 22 types of products from China. Similarly, the European Union imposed safeguard limits on imports from China on 10 types of products. Then, the monster finally took its last breaths. The EU limits expired at the end of 2007 and the U.S. limits expired at the end of 2008. (Still, we do not have free trade in textiles and clothing because many countries continue to have relatively high import tariffs in this sector. But the web of VERs has ended.)

Consumers are the big winners from the liberalization. Prices generally fell by 10 to 40 percent when the VERs ended. Another set of winners is countries, including China, India, and Bangladesh, that have strong comparative advantage in textiles and clothing but whose production and exports had been severely constrained by the VERs. On the other side, with rising imports, textile and clothing firms and workers in the United States and other industrialized countries have been harmed. Another set of losers is those developing countries, apparently including Korea and Taiwan, that do not have comparative advantage in textile and clothing production but that had become producers and exporters of textiles and clothing because the VERs had severely restricted the truly competitive countries. (This shows another type of global production inefficiency that resulted from the VERs.) These uncompetitive countries lost the VER rents that they had been receiving, and their industries shrank as those in countries such as China expanded.

Create a convincing case to justify DC's such as the United States and Britain imposing VERS on imported textiles and apparel. On the other hand beyond merely repeating the points already made in the text, make the case as an international economist, that VERS in textiles and apparel have been bad for global welfare.

Each student (using his / her own language) explains and interprets these two pages on Customs taxes on US oil imports.

You are required to explain the idea from the presented paper to someone who does not know anything about economics, that is, you have to simplify the idea while explaining it

Supply and Demand Analysis: An
Oil Import Fee
The basic logic of supply and demand is a powerful tool of analysis. As an extended example of
the power of this logic, we will consider a recent proposal to impose a tax on imported oil. The
idea of taxing imported oil is hotly debated, and the tools we have learned thus far will show us
the effects of such a tax. .
Consider the facts. Between 1985 and 1989, the United States increased its dependence on oil
imports dramatically. In 1989, total U.S. demand for crude oil was 13.6 million barrels per day. Of
that amount, only 7.7 million barrels per day (57 percent) were supplied by U.S. producers, with
the remaining 5.9 million barrels per day (43 percent) imported. The price of oil on world mar-
kets that year averaged about $18. This heavy dependence on foreign oil left the United States vul-
nerable to the price shock that followed the Iraqi invasion of Kuwait in August 1990. In the
months following the invasion, the price of crude oil on world markets shot up to $40 per barrel.
Even before the invasion, many economists and some politicians had recommended a stiff
oil import foc (or tax) that would, it was argued, reduce the U.S. dependence on foreign oil by
(1) reducing overall consumption and (2) providing an incentive for increased domestic produc-
tion. An added bonus would be improved air quality from the reduction in driving.
Supply and demand analysis makes the arguments of the import fee proponents easier to
understand. Figure 4.5(a) shows the U.S. market for oil. The world price of oil is assumed to be
$18, and the United States is assumed to be able to buy all the oil that it wants at this price.This means that domestic producers cannot get away with charging any more than $18 per barrel. The
curve labeled Supplyus shows the amount that domestic suppliers will produce at each price level.
At a price of $18, domestic production is 7.7 million barrels. Stated somewhat differently, U.S.
producers will produce at point A on the supply curve. The total quantity of oil demanded in the
United States in 1989 was 13.6 million barrels per day. At a price of $18, the quantity demanded
in the United States is point B on the demand curve.
The difference between the total quantity demanded (13.6 million barrels per day) and
domestic production (7.7 million barrels per day) is total imports (5.9 million barrels per day).
Now suppose that the government levies a tax of 33 1/3 percent on imported oil. Because the
import price is $18, a tax of $6 (or .3333 X $18) per barrel means that importers of oil in the
United States will pay a total of $24 per barrel ($18+ $6). This new, higher price means that U.S.
producers can also charge up to $24 for a barrel of crude. Note, however, that the tax is paid only
on imported oil. Thus, the entire $24 paid for domestic crude goes to domestic producers.
Figure 4.5(b) shows the result of the tax. First, because of a higher price, the quantity
demanded drops to 12.2 million barrels per day. This is a movement along the demand curve
from point B to point D. At the same time, the quantity supplied by domestic producers increased
to 9.0 million barrels per day. This is a movement along the supply curve from point A to point C.
With an increase in domestic quantity supplied and a decrease in domestic quantity demanded,
imports decrease to 3.2 million barrels per day (12.2 - 9.0).'
The tax also generates revenues for the federal government. The total tax revenue collected is
equal to the tax per barrel ($6) times the number of imported barrels. When the quantity
imported is 3.2 million barrels per day, total revenue is $6 X 3.2 million, or $19.2 million per day
(about $7 billion per year).
What does all of this mean? In the final analysis, an oil import fee would (1) increase domes-
tic production and (2) reduce overall consumption. To the extent that one believes that
Americans are consuming too much oil and polluting the environment, the reduced consump-
tion may be a good thing.

Question 1:

The following questions contains real numbers for COVID-19 daily report made on 2020-09-07

Use the CREATE TABLE command and Insert command to create the following table. For each field, pick the most appropriate data type for it.

Give the table name COVID_REPORT and make “Country_name” as Primary Key.

Question 1:

The following questions contains real numbers for COVID-19 daily report made on 2020-09-07

Use the CREATE TABLE command and Insert command to create the following table. For each field, pick the most appropriate data type for it.

Give the table name COVID_REPORT and make “Country_name” as Primary Key.

You work as an analyst for an institution located in Riyadh, Kingdom of Saudi Arabia (or KSA).

The Saudi Arabia’s Monetary Authority, KSA’s Central Bank, has recently released a report on the regulation of the quantity of money in the country for the upcoming Year 2021.

In answering the questions that follow: show all relevant formulas and calculations. Keep two decimal points.   

As part of the report, Saudi’s Central Bank created a reference value for money growth between 2020 and 2021, according to which they expect real growth to stay between -4.2% and -6.3%, inflation rate to be between 3.9% and 5.8%, and velocity growth to range between -1.8% and -3.1%.

Using the averages for the figures provided above, calculate KSA’s estimated money growth rate. (2 points)

Suppose that the Central Bank’s report also states that between 2019 and 2020, due to the anticipated inflation in the MENA region brought on by 2020, the Saudi Arabian Monetary Authority is planning to DECREASE the country’s ‘M2’ from SR 230 billion to SR 205 billion (SR = Saudi Riyal).

According to the report, between 2020 and 2021, the KSA’s measure of velocity is expected to stay constant at 3.25.  

Using the Quantity Theory of Money, calculate the percentage change in the KSA’s nominal GDP. (1.5 points)

*** Note: Question 4(b) is not related to Question 4(a).   

The report states that, due to the anticipated deflation in the MENA region brought on by EXPO 2020, between 2020 and 2021, the Saudi Consumer Price Index is expected to DECREASE from 185 to 155.

Using Fisher’s Equation, determine the impact of this change on the level of the nation’s real GDP. (1.5 points)

*** Note: Question 4(c) is a continuation from Question 4(b) and is not related to Question 4(a).

BECN 250 – Money and Banking – Formulas

CPI = Cost of Basket in Current YearCost of Basket in Base Year × 100%

GDP deflator= Nominal GDPReal GDP

Inflation rate 1= New CPI - Old CPIOld CPI ×100% = New Cost of Basket - Old Cost of BasketOld Cost of Basket × 100%

Percentage change = New - OldOld ×100%

% Δ M + % Δ V = % Δ P + % Δ Y = % Δ Nominal GDP   

Money growth + Velocity growth = Inflation + Real growth

Assume today is March 16, 2016. Natasha Kingery is 30 years old and has a Bachelor of Science degree in computer science. She is currently employed as a Tier 2 field service representative for a telephony corporation located in Seattle, Washington, and earns $38,000 a year that she anticipates will grow at 3% per year. Natasha hopes to retire at age 65 and has just begun to think about the future.

Natasha has $75,000 that she recently inherited from her aunt. She invested this money in 30-year Treasury Bonds. She is considering whether she should further her education and would use her inheritance to pay for it.*

She has investigated a couple of options and is asking for your help as a financial planning intern to determine the financial consequences associated with each option. Natasha has already been accepted to both of these programs, and could start either one soon.

One alternative that Natasha is considering is attaining a certification in network design. This certification would automatically promote her to a Tier 3 field service representative in her company. The base salary for a Tier 3 representative is $10,000 more than what she currently earns and she anticipates that this salary differential will grow at a rate of 3% a year as long as she keeps working. The certification program requires the completion of 20 Web-based courses and a score of 80% or better on an exam at the end of the course work. She has learned that the average amount of time necessary to finish the program is one year. The total cost of the program is $5000, due when she enrolls in the program. Because she will do all the work for the certification on her own time, Natasha does not expect to lose any income during the certification.

Another option is going back to school for an MBA degree. With an MBA degree, Natasha expects to be promoted to a managerial position in her current firm. The managerial position pays $20,000 a year more than her current position. She expects that this salary differential will also grow at a rate of 3% per year for as long as she keeps working. The evening program, which will take three years to complete, costs $25,000 per year, due at the beginning of each of her three years in school. Because she will attend classes in the evening, Natasha doesn’t expect to lose any income while she is earning her MBA if she chooses to undertake the MBA.

1. Determine the interest rate she is currently earning on her inheritance by going to the U.S. Treasury Department Web site (treasury.gov) and selecting “Data” on the main menu. Then select “Daily Treasury Yiled Curve Rates” under the Interest Rate heading and enter the appropriate year, 2016, and then search down the list for March 16 to obtain the closing yield or interest rate that she is earning. Use this interest rate as the discount rate for the remainder of this problem. --> the identified rate for March 16th on a 30 year bond is 2.73
2. Create a timeline in Excel for her current situation, as well as the certification program and MBA degree options, using the following assumptions:
   • Salaries for the year are paid only once, at the end of the year.
   • The salary increase becomes effective immediately upon graduating from the MBA program or being certified. That is, because the increases become effective immediately but salaries are paid at the end of the year, the first salary increase will be paid exactly one year after graduation or certification.
3. Calculate the present value of the salary differential for completing the certification program. Subtract the cost of the program to get the NPV of undertaking the certification program.
4. Calculate the present value of the salary differential for completing the MBA degree. Calculate the present value of the cost of the MBA program. Based on your calculations, determine the NPV of undertaking the MBA.
5. Based on your answers to Questions 3 and 4, what advice would you give to Natasha? What if the two programs are mutually exclusive? That is, if Natasha undertakes one of the programs there is no further benefit to undertaking the other program. Would your advice be different?

* If Natasha lacked the cash to pay for her tuition upfront, she could borrow the money. More intriguingly, she could sell a fraction of her future earnings, an idea that has received attention from researchers and entrepreneurs; see M. Palacios, Investing in Human Capital: A Capital Markets Approach to Student Funding, Cambridge University Press, 2004.

Proterra was founded by Dale Hill in 2004 with a vision to design and manufacture world-leading, advanced technology heavy-duty vehicles powered solely by clean domestic fuels. After launching a first successful fleet of alternative fuel buses in the 1990s, Proterra focused on developing the 'bus of tomorrow.' Proterra Inc. also designs and manufactures heavy-duty vehicles including EcoRide, a battery electric and zero-emissions bus, and Proterra Catalyst, an electric transit vehicle. The company manufactures a TerraFlex Energy System that enables customers to select amount and type of energy storage to meet specific route requirements, plus TerraVolt fast-charge batteries, TerraVolt extended range batteries, an on-route charge station and in-depot charging services. It offers financing solutions, route simulation analysis, battery lifecycle management, and standard warranty services (Proterra, 2015). It serves customers throughout the United States. The company is privately owned, but is in the process of becoming a public corporation. With this expectation, the firm's chief executive officer (CEO) has asked for determination of which of two companies appears to be a better peer to compare itself against, New Flyer Industries, Inc. (a Toronto-based firm), or Tesla. Tesla Motor Vehicles designs, develops, manufactures, and sells high-performance fully electric vehicles and stationary energy storage units similar to certain Proterra products. Tesla Motors has subsidiaries in North America, Europe and Asia, with the primary purpose of these subsidiaries being to market, manufacture, sell and/or service their vehicles (Tesla Motors, 2016). New Flyer was founded in 1930, and is now the largest transit bus and motorcoach manufacturer and parts distributor in North America with fabrication, manufacturing, distribution and service centers in Canada and the United States. It is North America's heavy-duty transit bus leader and offers clean diesel, natural gas, diesel-electric hybrid, electric-trolley and battery-electric. Information regarding Tesla and New Flyer is given here, for your use in comparing these firms.

Tesla Versus New Flyer

Significance

Measure

TSLA

NFI

Total Market Value of all outstanding shares.

Market capitalization

33.63B

1.831B

Number of outstanding shares currently held by all shareholders.

Outstanding shares of stock

147.28M

59.742M

A Beta coefficient indicates the systemic risk that an asset has relative to an average asset. A risk-free asset has a Beta of zero.

Beta

1.28

0.16

The return the firm must earn on its existing assets to maintain the value of its stock, and the required return on any investments by the firm that have essentially the same risks as existing operations.

WACC

9.03%

8.34

PE ratio divided by expected future earnings growth (after multiplying the growth rate by 100).

PEG Ratio

18.47

0.5

A measure of profit per dollar of assets.

ROA

-7.04%

6.26%

A measure of how the stockholders fared during the year.

ROE

-113.20%

13.21%

A measure of how much investors are willing to pay per dollar of current earnings. Higher PEs are often taken to mean the firm has significant prospects for future growth.

P/E Ratio

-29.17

25.3

Ratio of Net income to sales.

Profit Margin

-23.91%

-3.83%

References

Bloomberg. United States rates and bonds.

Federal Reserve. (2016). Federal Reserve economic data.

Korosec, K. (2015). This startup is gearing up to be the Tesla of electric buses. Fortune Magazine.

Proterra. (2015). About Proterra.

Securities and Exchange Commission. (n.d.) SEC.gov home.

Tesla Motors. (2016). Tesla Motors, Inc. 2016 annual report.

Yahoo. (n.d.) Yahoo finance.

Assume that you are the finance manager for Proterra and you have been asked to provide an analysis of the following issues, as the firm develops benchmarks for its cost of capital (WACC) estimates. The firm's CEO has instructed you to use the pure play approach to estimate its WACC cost of capital, and has chosen Tesla Motors (ticker symbol TSLA) and New Flyer (ticker symbol NYI.TO) as possible representative peers (Korosec, 2015).

QUESTION: Analyze the relative applicability or inapplicability of utilizing these firms as peers to evaluate Proterra's likely cost of capital, with the given above data about Proterra, Tesla and New Flyer, and the lessons of Capital Market History.