You are the current "up-and-coming" corporate controller for a publicly traded company called Spartan Cruises, Inc. and as such, report to the CFO Tom Harris who in turn reports to the CEO Michele Lowry.

Spartan Cruises, headquartered in Miami, offers upscale cruises primarily to US citizens out of three ports as follows:

1.      15 ships operating out of Miami with Caribbean itineraries that are very profitable.

2.      10 ships operating out of Barcelona Spain with Mediterranean itineraries that are modestly profitable.

3.      5 ships operating out of Sydney Australia with Australian coast and New Zealand itineraries that are effectively break even from a financial perspective.

All 30 ships cost approximately $150.00 million/ship and are depreciated on a straight line basis over 10 years (with no residual or salvage value) - the 15 operating out of Miami are relatively new, the 10 operating out of Barcelona are 5 years old, and the 5 ships operating out of Sydney are much older and fully depreciated.

In addition, Spartan Cruises had previously signed contracts to purchase 3 additional ships at $150.0 million/ship that were scheduled to be delivered to Miami in mid-2022 but as of today, construction has not commenced. As part of the contract signing process for each ship, Spartan Cruises made a good-faith non-refundable deposit of $20.0 million/ship and recorded a combined asset of $60 million on their balance sheet.

Late last week, CFO Tom and CEO Michele attended a high-level economic summit in New York City and during the conference, credible market experts predicted that the cruise industry is about to go through permanent economic contraction and as such, will no longer enjoy the demand and revenue levels it enjoyed in recent years. Specifically, the experts predict that cruise industry revenues will be 70% lower than what the industry was otherwise anticipating over the next five years due primarily to the pandemic vulnerability passengers are exposed to as evidenced by the recent well-publicized coronavirus (something Spartan Cruises was fortunate to totally avoid).

On the private plane ride back from New York, Tom and Michele discussed how Spartan Cruises was going to adapt to this new reality given that the Barcelona & Sydney operations will probably become very unprofitable as incoming cash flow from cruise sales is expected to effectively evaporate.

Tom and Michele are considering discontinuing the Barcelona and Sydney operations, and cancelling the orders for the 3 new ships, and have asked you to quantify on a macro perspective what the financial impact would be if the Spartan Cruises Board of Directors decided to move in that direction and announce these discontinued operations before the end of the March 31 first quarter.

Q1.

what the effect might be for reflecting these "impairment issues" into the March 31, 2020 first quarter income statement

Q2.

other financial considerations that management might take into account when deciding on this potential action.

Conch Republic Electronics is a mid sized electronics manufacturer located in Key West, Florida. The company president is Shelley Couts, who inherited the company. When it was founded over 70 years ago, the company originally repaired radios and other household appliances. Over the years, the company expanded into manufacturing and is now a reputable manufacturer of various electronic items. Jay McCanless, a recent MBA graduate, has been hired by the company's finance department. One of the major revenue-producing items manufactured by Conch Republic is a personal digital assistant (PDA). Conch Republic currently has one PDA model on the market, and sales have been excellent. The PDA is a unique item in that it comes in a variety of tropical colors and is preprogrammed to play Jimmy Buffett music. However, as with any electronic item, technology changes rapidly, and the current PDA has limited features in comparison with newer models. Conch Republic developed a prototype for a new PDA that has all the features of the existing PDA but adds new features such as cell phone capability. The company has performed a marketing study to determine the expected sales figures for the new PDA. Conch Republic can manufacture the new PDA for $200 each in variable costs. Fixed costs for the operation are estimated to run $4.5 million per year. The estimated sales volume is 70,000, 80,000, 100,000, 85,000, and 75,000 per each year for the next five years, respectively. The unit price of the new PDA will be $340. The necessary equipment can be purchased for $16.5 million and will be depreciated on a 5 year straight-line schedule. Net working capital investment for the PDAs will be $6,000,000 the first year of operations. Of course NWC will be recovered at the projects end. Conch Republic has a 35 percent corporate tax rate and a 12 percent required return. Shelly has asked Jay to prepare a report that answers the following questions: 1. What is the IRR of the project? 2. What is the NPV of the project, based on the required rate of return of 12%?

Easy on the Wallet or Easy on the Earth: A Case About Ethics in Sourcing

Meghan Skarzynski

Fashionforward! is an online auction site where those who have more style than money can bid on designer apparel. The site registers members for $30, who are then allowed to bid on exceptional deals. In an effort to stand out from the crowded field of online bargain sites, Fashionforward! reached out to the local community in search of help marketing their company to college students.

Part of this effort included hiring a student intern, Carly LeBlanc. At that point, Fashionforward! had no formal marketing strategy for targeting consumers. As someone who grew up in the digital age, LeBlanc knew she had to kick start the company on the Internet. Her marketing knowledge centered on the benefits of viral technologies, especially Facebook and Twitter.

LeBlanc immediately revamped the Fashionforward! Facebook page to make it more user-friendly--adding quizzes, polls, discussion boards, and photo albums--as well as setting Twitter blasts to go off repeatedly throughout the day. During her three-month internship, LeBlanc quadrupled the Fashionforward! Facebook fan base. Her project helped catapult the company into prominence. In the three months of her internship, Fashionforward! increased the number of items offered on the site threefold.

The CEO noticed LeBlanc's success in social networking and asked her to launch a guerrilla marketing campaign on her own campus to create buzz for Fashionforward! among her peers. The CEO challenged her to register 100 new clients within the week.

A member of a sorority since her freshman year, LeBlanc decided to use her Greek connections. She appeared at four campus sororities that week. Promising a free Fashionforward! T-shirt with the sorority's name for every membership purchased, LeBlanc registered 300 new members in one night.

Reporting to work the next day, LeBlanc was excited to share with the team the quick acceptance Fashionforward! had received on campus. She believed she had developed an easy and effective marketing strategy that could be replicated at schools all over the country. LeBlanc planned to order different T-shirt designs for different sororities, highlighting the Fashionforward! logo in bold lettering.

That's when she faced a difficult ethical decision: She could order the shirts from a low-cost company in China or she could order them from a fair-trade company in San Francisco, which provided safe conditions and higher wages for the workers who made the clothing. The fair trade shirts were $28.65,making the grand total for her project $8,595. In contrast, the Chinese T-shirts were $5.50 each, and the company's Web site promised fast and free delivery for a grand total of $1,100.

LeBlanc remembered from her Venture Capital Finance class that startup companies need to focus on making the most money during the first two years. She also knew that the T-shirts from China would be cheaper so that she could create a more elaborate design with more graphics and color. She realized her school was a "testing campus" for Fashionforward! and that if her marketing module worked, her internship work would spread to other college campuses. She thought of how easy it would be for a factory in China to produce large quantities of shirts to give away for free as a promotion that she could promote on the Facebook page she had worked so hard on. She also wondered if the higher cost of the T-shirts would affect the grade the CEO gave her for the internship.

On the other hand, her International Management class had exposed her to the harsh reality of working conditions in China: low wages, rigorous work schedule, poor safety regulations, and the complete lack of worker's compensation and benefits. When LeBlanc had sailed on the Human Rights and Social Justice Voyage with University of Virginia's Semester at Sea, she saw first-hand a Bulgarian clothing factory's destitute environment. She wasn't sure how the public would react if they knew Passionita had taken advantage of outsourcing cheaper t-shirts rather than supporting a U.S. company during the global recession.

Then LeBlanc weighed her other option of ordering t-shirts from a San Francisco T-shirt company she had already used once when she worked with a community service student organization. While the shirts were more expensive, they were fair-trade, organic, and eco-friendly, all attributes she thought would appeal to students. LeBlanc reasoned students would be more likely to wear a shirt that was fashionable and better quality than one that was made cheaply.

LeBlanc didn't want to disappoint her boss. She knew she was working on a deadline and didn't have time to research the prices of T-shirts at other companies. Even though she could have created a bidding war with local T-shirt companies for the business, she preferred to buy from a company that she could trust. At the same time, the $7,495 she would save if she bought from the Chinese manufacturer was too good not to consider. She knew if she made her boss happy, she'd be promoted and enjoy more independence with her future projects.

LeBlanc wants Fashionforward! to increase its popularity and become a topnotch company among college trendsetters. What should she do and why?

1. Should she quit her internship and drop the class?

2. Should she ask for an extension on her assignment?

3. Should she order the T-shirts from a fair trade company?

4. Should she assume the Chinese company doesn't treat its workers fairly?

Answer the four Discussion Questions below here, to present detailed answers.

The following transactions are from Sharper Vision Corporation.

1. Purchased inventory on December 10, 2020, with a list price of $6,000, a trade discount of 20%, and with terms 2/10, n/30.
2. Returned $800 of inventory to the supplier on December 15, 2020.
3. Paid $3,200 cash on account on December 19, 2020.
4. Paid the remaining balance on January 5, 2021.

• Perpetual inventory systems
• Periodic inventory systems

a. Prepare journal entries for the transactions 1 through 4, assuming that the company uses the perpetual inventory system and the net method to record purchases. Include any adjusting entry required on December 31, 2020.
Note: Round answers to the nearest dollar.

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1. Endotoxin is a major cause of septic shock. Describe
   1. (2 pts) where endotoxin comes from,

2. (4 pts) the specific steps the innate and acquired immune system takes to respond to endotoxin in the blood stream. Explain the steps from the recognition of endotoxin by the innate immune system to the response by the acquired immune system.

3. (2 pts) how the immune system response leads to septic shock.

How did Lamarck’s theory of evolution DIFFER from that of Darwin’s?

Lamarck believed that Earth was old enough to provide a sufficient time scale for the process of evolution.

Lamarck believed that the environment played a significant role.

Lamarck believed that characteristics acquired during an organism’s lifetime could be passed on to the next generation.

Lamarck believed that acquired character during an organism’s lifetime could not be passed on to the next generation.

1. Trevonne had a $750,000 line of credit with Treyenne State bank. They had an outstanding balance of $150,000 at the beginning of 2020, paid $72,000 on the balance on January 28, 2020, borrowed an additional $165,000 on March 16, 2020. If the interest rate is seven percent compounded monthly, what is the balance on the line of credit as of March 31, 2020.

Target ROE problem You are given the following information regarding KTC for 2019: RETURN ON ASSETS = 7.5% NET PROFIT MARGIN = 6.0% DEBT EQUITY RATIO = 1.5x SALES = $550,000.00 GROSS PROFIT RATE = 50.0% TAX RATE = 34.0% 1) What must KTC project as its 2020's sales in order to generate an additional 5% Return on Equity above last year’s levels (2019’s ROE + 5%, not 2019’s ROE x 105%) 2) Prepare a projected 2020 Profit and Loss Statement and Balance Sheet (general categories are fine). 3) Calculate: 2020’s projected RETURN ON EQUITY (use the DuPont model) 2020’s projected RETURN ON ASSETS 2020’s projected NET PROFIT MARGIN 2020’s projected EQUITY MULTIPLIER 2020’s projected TOTAL ASSET TURNOVER 4) In addition to the above, determine the increase in sales necessary to also provide for dividends to be paid at the rate of 30% of 2020’s after-tax profits.

Target ROE problem

You are given the following information regarding KTC for 2019:

RETURN ON ASSETS = 7.5% NET PROFIT MARGIN = 6.0% DEBT EQUITY RATIO = 1.5x SALES = $550,000.00 GROSS PROFIT RATE = 50.0% TAX RATE = 34.0%

1) What must KTC project as its 2020's sales in order to generate an additional 5% Return on Equity above last year’s levels (2019’s ROE + 5%, not 2019’s ROE x 105%)

2) Prepare a projected 2020 Profit and Loss Statement and Balance Sheet (general categories are fine).

3) Calculate: 2020’s

projected RETURN ON EQUITY (use the DuPont model)

2020’s projected RETURN ON ASSETS

2020’s projected NET PROFIT MARGIN

2020’s projected EQUITY MULTIPLIER

2020’s projected TOTAL ASSET TURNOVER

4) In addition to the above, determine the increase in sales necessary to also provide for dividends to be paid at the rate of 30% of 2020’s after-tax profits.