1. Which of the following statements is (are) correct?
(x) Business cycles are fluctuations in real GDP and related economic variables such as investment and unemployment that occur over time.
(y) A short period of falling incomes and rising unemployment is called a recession and a short period of rising incomes and falling unemployment is called an expansion.
(z) During recessions firms may find that they are unable to sell all they produce and, as a consequence, workers are laid off.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (x) only

2. Which of the following statements about the United States is (are) correct?
(x) In the United States, investment is a small part of real GDP compared to consumption, yet it accounts for a large share of the fluctuation in real GDP.
(y) Spending on new factories and housing typically rises during economic expansions in the U.S.
(z) The rapid increase in asset prices, including stocks and capital equipment, was a probable cause of the Great Depression in the U.S.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (x) only

3. The overall price level in the U.S. is measured by the
A. rate of inflation.
B. rate of deflation.
C. CPI or the GDP deflator.
D. price of some particular commodity or service.
E. Either A or B

Multiple Choice

• $-2,931,556.43

• $11,459.60

• $11,917.98

• $11,001.22

• $391,852.70

Fabulous discussion so far, the examples that you guys provided about the decisions that you had to make are great and diverse, and surely demonstrate the dilemma of scarcity and unlimited wants (utilities), as well as the dilemma of weighing costs against current or future actual (or perceived) benefits when making choices.

The society as a whole in any given country faces similar challenges due to the fact that each society has limited resources but has unlimited wants. As strange as it might sound, when countries go to large scale wars, such as WWI and WWII for example, one of the main changes in their “production” is the increase in the production of children, as well as war materials- tanks, planes, bombs, etc. During peace time and economic progress, people produce less children and the opportunity cost of having a child typically rises (more jobs for women with high pay means higher cost of having a child and/or being a stay at home mom). In such, societies alter their production process (production possibility frontier) as the resources and the wants of their people change.

Pick either a country/region outside the United States or a state, a region, or a city within the United States and discuss what is the major good or service that country, region, state, or city produces and why.

Also, what are the challenges that county, region, state, or city faces given its current resources.

Sandrine Machinery is a Swiss multinational manufacturing company. Currently, Sandrine's financial planners are considering undertaking a 1-year project in the United States. The project's expected dollar-denominated cash flows consist of an initial investment of $2,000 and a cash inflow the following year of $2,400. Sandrine estimates that its risk-adjusted cost of capital is 9%. Currently, 1 U.S. dollar will buy 0.98 Swiss franc. In addition, 1-year risk-free securities in the United States are yielding 4.6%, while similar securities in Switzerland are yielding 2.3%.

1. If this project was instead undertaken by a similar U.S.-based company with the same risk-adjusted cost of capital, what would be the net present value and rate of return generated by this project? Round the net present value to the nearest cent and rate of return to two decimal places.

   NPV = $  

   Rate of return =   %

2. What is the expected forward exchange rate 1 year from now? Do not round intermediate calculations. Round your answer to two decimal places.

     Swiss franc (SF_r) per U.S. $

3. If Sandrine undertakes the project, what is the net present value and rate of return of the project for Sandrine? Do not round intermediate calculations. Round the net present value to the nearest cent and rate of return to two decimal places.

   NPV =   Swiss francs

   Rate of return =   %

Sandrine Machinery is a Swiss multinational manufacturing company. Currently, Sandrine's financial planners are considering undertaking a 1-year project in the United States. The project's expected dollar-denominated cash flows consist of an initial investment of $2,000 and a cash inflow the following year of $2,400. Sandrine estimates that its risk-adjusted cost of capital is 8%. Currently, 1 U.S. dollar will buy 0.85 Swiss franc. In addition, 1-year risk-free securities in the United States are yielding 2.6%, while similar securities in Switzerland are yielding 1.3%.

1. If this project was instead undertaken by a similar U.S.-based company with the same risk-adjusted cost of capital, what would be the net present value and rate of return generated by this project? Round the net present value to the nearest cent and rate of return to two decimal places.

   NPV = $----------------  

   Rate of return =---------------------- %

2. What is the expected forward exchange rate 1 year from now? Do not round intermediate calculations. Round your answer to two decimal places.

   ------------Swiss franc (SF_r) per U.S. $

3. If Sandrine undertakes the project, what is the net present value and rate of return of the project for Sandrine? Do not round intermediate calculations. Round the net present value to the nearest cent and rate of return to two decimal places.

   NPV = ---------- Swiss francs

   Rate of return =---------- %

16.  Problem 19.17 (Foreign Capital Budgeting)

Sandrine Machinery is a Swiss multinational manufacturing company. Currently, Sandrine's financial planners are considering undertaking a 1-year project in the United States. The project's expected dollar-denominated cash flows consist of an initial investment of $2,000 and a cash inflow the following year of $2,400. Sandrine estimates that its risk-adjusted cost of capital is 11%. Currently, 1 U.S. dollar will buy 0.85 Swiss franc. In addition, 1-year risk-free securities in the United States are yielding 2%, while similar securities in Switzerland are yielding 1%.

1. If this project was instead undertaken by a similar U.S.-based company with the same risk-adjusted cost of capital, what would be the net present value and rate of return generated by this project? Round the net present value to the nearest cent and rate of return to two decimal places.

   NPV = $  

   Rate of return =   %

2. What is the expected forward exchange rate 1 year from now? Do not round intermediate calculations. Round your answer to two decimal places.

     Swiss franc (SF_r) per U.S. $

3. If Sandrine undertakes the project, what is the net present value and rate of return of the project for Sandrine? Do not round intermediate calculations. Round the net present value to the nearest cent and rate of return to two decimal places.

   NPV =   Swiss francs

   Rate of return =   %

Sandrine Machinery is a Swiss multinational manufacturing company. Currently, Sandrine's financial planners are considering undertaking a 1-year project in the United States. The project's expected dollar-denominated cash flows consist of an initial investment of $2,000 and a cash inflow the following year of $2,400. Sandrine estimates that its risk-adjusted cost of capital is 8%. Currently, 1 U.S. dollar will buy 0.85 Swiss franc. In addition, 1-year risk-free securities in the United States are yielding 2.6%, while similar securities in Switzerland are yielding 1.3%.

1. If this project was instead undertaken by a similar U.S.-based company with the same risk-adjusted cost of capital, what would be the net present value and rate of return generated by this project? Round the net present value to the nearest cent and rate of return to two decimal places.

   NPV = ----------$  

   Rate of return = ------------ %

2. What is the expected forward exchange rate 1 year from now? Do not round intermediate calculations. Round your answer to two decimal places.

   ---------- Swiss franc (SF_r) per U.S. $

3. If Sandrine undertakes the project, what is the net present value and rate of return of the project for Sandrine? Do not round intermediate calculations. Round the net present value to the nearest cent and rate of return to two decimal places.

   NPV = ------------Swiss francs

   Rate of return = ------------ %

1.  XYZ Company, a manufacturer of computer peripheries, assembles a particular product line at a wholly owned facility in Singapore. The product is designed at XYZ’s headquarters in the United States, but the different components used in the assembly process are manufactured throughout Asia and shipped to Singapore for final assembly. Some of the components are manufactured in multiple locations, so the customer can actually designate where XYZ should source the components. The final product is assembled in Singapore and then shipped via Emery Freight to customers throughout Asia. XYZ Singapore does not buy any components from the United States, but it invoices all of the components purchased from Asian suppliers in U.S. dollars. In addition, it sells the product to Asian customers in U.S. dollars. However, all of its expenses in Singapore are paid in Singapore dollars. Most of the key marketing decisions are made by the U.S. marketing staff, although the Singapore staff acts as a liaison with Emery Freight personnel and deals with the local workers, most of whom come from Sri Lanka on short-term work visas.

     XYZ prefers to translate the results of their Singapore subsidiary into dollars using the current rate method. What is the advantage to XYZ of using the current rate method? As their auditor, what do you think of their decision? If their decision is wrong and they should be using the temporal method, is it possible for them to change?

Julianna Lilian is a realtor. She buys and sells properties on her own and also earns a commission as an agent for buyers and sellers. She organized a business in early 2020 where she contributed $60,000 in cash in return for common shares. Consider the following facts as of March 31, 2020:

• Office supplies of $500 were purchased and used during in the period.
• Julianna spent $20,000 for the right to use the Royal Lepage franchise, which allows her to represent herself as an agent. The franchise right is considered an asset.
• The business owes $150,000 as a loan payable for a plot of land that is currently undeveloped. The land cost Julianna $170,000 and she paid the remaining amount using cash. The loan has an interest rate of 8% / year.
• Julianna sold 5 houses and earned a commission of $42,000. As of March 31, all commission has been collected in cash and deposited into Julianna’s business bank account.
• Julianna owes $300,000 on a personal mortgage for her private residence. She acquired the home in 2018 for $450,000. The mortgage has an interest rate of 3% / year.
• In January 2020, Julianna acquired furniture for her office totalling $18,000. The furniture has a useful life of 9 years.
• Julianna paid $22,000 in upfront expenses (insurance and rent). Both expenses will cover the 2020 calendar year (January – December)
• Julianna paid $5,000 is other expenses relating to the business during the period.
• Julianna has $4,000 in her personal bank account and $19,500 in a business bank account.

Questions

1. Identify and explain why some of the data included above are not relevant to preparing the Company’s financial statements

2. Explain 2 relevant users for the financial statements. Explain the decisions that each user may make using the financial statements information

3. Prepare the journal entries and period end adjusting entries for the above transactions

Use the following format:

Dr. Account Name (Asset) $ XXX

Cr. Account Name (Liability) $ XXX

4. List the company’s total assets, total liabilities and total shareholders, as they would appear on the balance sheet as of March 31, 2020

Use the following format:

Cash $X,XXX

Asset 2 $X,XXX

Asset 3 $X,XXX

Asset 4 $X,XXX

Etc.

Total Assets: $X,XXX

Liability 1 $X,XXX

Liability 2 $ X,XXX

Total Liabilities: $X,XXX

Shareholders Equity: $X,XXX

that is all the information

what information do you prime think is missing? that is all that is given