Quality Motors is a Japanese-owned company that produces automobiles; all of its automobiles are produced in American plants. In 2008, Quality Motors produced $25 million worth of automobiles and sold $12 million in the U.S. and $13 million in Mexico. In addition, it sold $2 million from the previous year’s inventory in the U.S. The transactions just described contribute how much to U.S. GDP for 2008?
A. $12 million
B. $14 million
C. $23 million
D. $25 million
E. $27 million

9. If a country reported a nominal GDP of $400 billion in 2012 and $398 billion in 2013 and reported a GDP deflator of 100 in 2012 and 98.2 in 2013, then from 2012 to 2013 real output _______ and prices _______.
A. rose; rose.
B. rose; fell.
C. rose ; was unchanged
D. fell; rose.
E. fell; fell.

10. Suppose a country reported a nominal GDP of $550 billion in 2011 and $572 billion in 2012. It reported a GDP deflator of 115.0 in 2011 and 121.9 in 2012. From 2011 to 2012, real output _________ and prices ________.
A. rose; rose.
B. rose; fell.
C. rose ; was unchanged
D. fell; rose.
E. fell; fell.

Assume that the transactions listed in the first column of the following table are anticipated by U.S. firms that have no other foreign transactions. Place an “X” in the table wherever you see possible ways to hedge each of the transactions.

            1.   Georgetown Co. plans to purchase Japanese goods denominated in yen.

            2   Harvard, Inc., sold goods to Japan, denominated in yen

3.   Yale Corp. has a subsidiary in Australia that will be remitting funds to the U.S. parent.

4 Brown, Inc., needs to pay off existing loans that are denominated in Canadian dollars.

Princeton Co. may purchase a company in Japan in the near future (but the deal may not go through).

                 Forward Contract                    Futures Contract                    Options Contract

               Forward         Forward                  Buy               Sell                  Purchase       Purchase

               Purchase           Sale                  Futures          Futures                  Calls              Puts  

      a.                                                                                                           

      b.                                                                                                                                

      c.                                                                                                                                 

      d.                                                                                                           

      e.

The proper analysis of foreign operations by financial statement users requires that financial statements of the foreign operations be expressed in a common currency. For a U.S. company with a French subsidiary, this means converting the subsidiary’s financial statements from Euros to U.S. dollars. One of the major issues in translating the financial statements of a foreign branch, division, or subsidiary is determining the functional currency of the foreign entity. The term “functional currency” has been defined by the Financial Accounting Standards Boards (FASB) as the currency of the primary economic environment in which the entity operates; normally, the currency of the environment in which the entity primarily generates and expends cash. Although the definition may seem relatively straightforward, the Financial Accounting Standards Board found it necessary to list various factors to guide management in determining the functional currency. Required: Identify the factors FASB identified that might be helpful in making the functional currency decision.

What is the Allegory of the Cave? What is Plato trying to describe about human existence using this allegory? Have you ever had a time when you have “left the cave” only to return with a new understanding of your former world? If you are unclear on any of the elements of Plato’s philosophy use the discussion board to ask questions to gain a better understanding of the philosophy from your peers. (answer should be at least 200 words)

You are the CEO of a corporation whose board has just decided to cut the dividend to the stockholders. This is a matter of absolute confidentiality, as it could have major effects on your stock prices if the information gets out before implementation of the cut.

At a reception, you are approached by an elderly gentleman, who retired from the company several years ago. Virtually all of his savings and much of his retirement income is in company stock. He asks, point blank, whether he should sell some of his stock, in order to obtain some needed funds for living expenses. You know that he knows a "yes" answer will indicate some dramatic decision, such as a decision to cut the dividend, is impending. If you tell him "no," he could lose considerable value on his stock.

Questions:                                                                             

Do you tell him? What???

What do you say?

If you tell him, could it affect your company?

Could this affect your own job?

Give your suggestion and advise in your own words.

Pay Packages Explained

Executive pay packages differ substantially from typical salaried or hourly employee compensation because unlike typical employee pay, the vast majority of an executive's pay is contingent compensation and structured only to reward the executive for actual, positive company performance and growth in shareholder value. To this end, executive compensation packages typically utilize six distinct compensation components:

Base Salary

Short-Term Incentive

Long-Term Incentive

Employee Benefits

Perquisites

Severance/Change-in-Control Payments

A company's Compensation Committee will structure their executive's pay packages utilizing a combination of the above components to help achieve the company's Pay for Performance and/or Retention objectives.

Using this article and the text, work through the following: You are on a BOD and head of the compensation committee. The company sales are flat, profitability in the lower quartile for the industry that is growing at 5% per year. Outside consultants have determined it will take three years to turn the company around. Develop a structure for a compensation program for the CEO and key officers. Define the elements, potential measures and targets for a comp program.