Section 1 – Presentation of financial statements

Prepare a statement of profit or loss and other comprehensive income for Timber Ltd for the year ended 30 June 2017 (classify expenses by functions). Cross reference all workings

2. On reading this paragraph, what can you conclude about the elasticity of demand for

museum admissions. Do you think that that museum admissions have a relatively elastic

demand? If yes, why and if no your answer should be backed by suitable evidence from the

passage and your own understanding of the concept. Draw the type of demand curve you

would expect for museum admissions and provide the range for the possible values of

elasticity.

The willingness of visitors to keep coming even with admission fees rising may be

attributable to what economists call the elasticity of demand — the degree to which price

affects the volume of demand. The large number of people who want to go to some of the

most expensive museums make those institutions less willing to lower or eliminate admission

fees. Certain products are more sensitive to the budget restraints of consumers, but museum

admissions might not fall into that category. Even at $20-plus per person, the price may seem

“low because museums are still very cheap entertainment, and they are special occasions,”

said Gerald Friedman, an economics professor at the University of Massachusetts. “You

won’t shun the Uffizi to save a few dollars after taking the trouble and expense to get to

Florence, Italy.” Or New York City or Boston or Chicago, the argument would go.

Out-of-state and international visitors to the Metropolitan annually account for 50 to 55

percent of the total attendance. Those people are spending a considerable amount of money

on transportation, hotels, and dining, making even the museum’s top suggested fee of $25

seem modest in comparison, according to Wells Fargo Bank chief economist John Silvia.

“Because of the wealth and foreign visitors in New York City, there is very little price

elasticity,” he said. “They can probably charge much more and not lose a customer.”

Chapter 3 - The Research Process (#1,5,6,7,8,10,13 in your text)

You have just been assigned to provide client services to the following entities. For each, identify three resources you could consult in order to better understand the company's business model and industry.

a. Pfizer

b. Southwest Airlines

c. Caesars Entertainment

You are once again in the first step of the research process (understanding the facts). Now, your company is looking to repurchase some of its outstanding stock. You are about to attend a meeting between representatives of your company's Treasury department and a bank at a fixed price on a certain date. Identify three resources you could consult or questions you might ask of others on your team or in the organization, to gather additional background/ precedent for this issue before you attend the meeting.

Identify at least one researchable question for each of the following issues.

A cable network has just entered into an agreement granting it the right to show reruns of a hit TV series. In exchange for this right, the network must pay the TV show's creators a fee each time the show airs.

An online restaurant booking site sells a $100 meal voucher, good for $100 towards a meal at Randall's Steakhouse, to a customer for $60. When the customer presents the voucher to Randall's Steakhouse, the restaurant booking site must remit $50 to Randall's, retaining $10.

A company's auditor is questioning the appropriateness of the company's discount rate assumption, which it uses to measure its defined benefit pension obligation.

Automotive, Inc. has announced the sale of it's Truck Division's three plants, along with planned layoffs of the Truck Division's employees. Automotive, Inc. is hoping to segregate the results of the Truck Division's operations in its financial statements. Identify at least two possible research questions.

Problem 15-44 (Algo) Analyze Transfer Pricing Data (LO 15-2)

Elsinore Electronics is a decentralized organization that evaluates divisional management based on measures of divisional contribution margin. Home Audio (Home) Division and Mobile Electronics (Mobile) Division both sell electronic equipment, primarily for video and audio entertainment. Home focuses on home and personal equipment; Mobile focuses on components for automobile and other, nonresidential equipment. Home produces an audio player that it can sell to the outside market for $72 per unit. The outside market can absorb up to 89,000 units per year. These units require 3 direct labor-hours each.

If Home modifies the units with an additional hour of labor time, it can sell them to Mobile for $81 per unit. Mobile will accept up to 77,000 of these units per year.

If Mobile does not obtain 77,000 units from Home, it purchases them for $84 each from the outside. Mobile incurs $36 of additional labor and other out-of-pocket costs to convert the player into one that fits in the dashboard and integrates with the automobile’s audio system. The units can be sold to the outside market for $204 each.

Home estimates that its total costs are $1,090,000 for fixed costs, $14.40 per direct labor-hour, and $7.20 per audio player for materials and other variable costs besides direct labor. Its capacity is limited to 375,000 direct labor-hours per year.

Required:

Determine the following:

a. Total contribution margin to Home if it sells 89,000 units outside.

b. Total contribution margin to Home if it sells 77,000 units to Mobile.

(c) & (d). The costs to be considered in determining the optimal company policy for sales by Home.

The annual contributions and costs for Home and Mobile under the optimal policy.

Bank of America's Consumer Spending Survey collected data on annual credit card charges in seven different categories of expenditures: transportation, groceries, dining out, household expenses, home furnishings, apparel, and entertainment (U.S. Airways Attache, December 2003). Using data from a sample of 42 credit card accounts, assume that each account was used to identify the annual credit card charges for groceries (population 1) and the annual credit card charges for dining out (population 2). Using the difference data, the sample mean difference was    = $872, and the sample standard deviation was sd = $1,119.

Formulate the null and alternative hypotheses to test for no difference between the population mean credit card charges for groceries and the population mean credit card charges for dining out.
H0:  d Selectgreater than or equal to 0greater than 0less than or equal to 0less than 0equal to 0not equal to 0Item 1  
Ha:  d Selectgreater than or equal to 0greater than 0less than or equal to 0less than 0equal to 0not equal to 0Item 2  

Use a .05 level of significance. What is the p-value?
The p-value is Selectless than .01between .01 and .02between .02 and .05between .05 and .10between .10 and .20between .20 and .40greater than .40Item 3  

Can you conclude that the population means differ?
SelectThere is a difference between the annual mean expendituresCannot conclude there is a difference between the annual mean expendituresItem 4  

Which category, groceries or dining out, has a higher population mean annual credit card charge?
SelectGroceriesDining outItem 5  

What is the point estimate of the difference between the population means?
$   

What is the 95% confidence interval estimate of the difference between the population means (to the nearest whole number)?
(  ,   )

Just after graduation, you have joined ABC Financial Advisors as a Paraplanner. Your first job is to prepare basic financial statements and analyse the financial situation of a client. The prepared Fact Sheet based on information provided by the client reveals the following information. The client, Ms Rae Adams, is employed as a Management Trainee at YZ Manufacturing. Her gross salary for the financial year is $72,000. In addition, the employer contributes 9.5% of her gross salary into a personal superannuation fund. Ms Adams’ total tax liability in 2016 is $14,947.00. In addition, she received non-taxable rental income of $200 and tax-free interest income of $190.

Ms Adams has contributed $5,200 to her personal superannuation account. She paid union fees of 1% of her gross salary and $1,080 in healthcare expenses. Ms Adams’ household and entertainment expenses were $12,250 and $8,500 in 2018, respectively. Also, Ms Adams paid $15,500 against the mortgage loan and another $6,500 for a credit card loan.

Ms Adams has her own home which is worth $650,000. A month ago, her contents were valued by her insurer for $150,000. Furthermore, she has a car worth $25,000 and a savings account balance of $8,000. Her accumulated superannuation balance is $155,000. The outstanding balances on the mortgage loan and credit card were $350,000 and $10,000 respectively.

a) Using the above financial data, prepare the following information for Ms Rae Adams:

i. personal balance sheet;

ii. personal cash flow statement;

iii. Net Worth Ratio;

iv. Quick Ratio;
v. Savings Ratio;
vi. Debt Service Ratio.

b) Comment on the financial situation of the client using the completed financial statements and the ratios.

Bank of America's Consumer Spending Survey collected data on annual credit card charges in seven different categories of expenditures: transportation, groceries, dining out, household expenses, home furnishings, apparel, and entertainment (U.S. Airways Attache, December 2003). Using data from a sample of 42 credit card accounts, assume that each account was used to identify the annual credit card charges for groceries (population 1) and the annual credit card charges for dining out (population 2). Using the difference data, the sample mean difference was    = $861, and the sample standard deviation was s_d= $1,114.

1. Formulate the null and alternative hypotheses to test for no difference between the population mean credit card charges for groceries and the population mean credit card charges for dining out.
   H₀:  _d Selectgreater than or equal to 0greater than 0less than or equal to 0less than 0equal to 0not equal to 0Item 1
   H_a:  _d Selectgreater than or equal to 0greater than 0less than or equal to 0less than 0equal to 0not equal to 0Item 2
   
2. Use a .05 level of significance. What is the p-value?
   The p-value is Selectless than .01between .01 and .02between .02 and .05between .05 and .10between .10 and .20between .20 and .40greater than .40Item 3
   
   Can you conclude that the population means differ?
   SelectThere is a difference between the annual mean expendituresCannot conclude there is a difference between the annual mean expendituresItem 4
   
3. Which category, groceries or dining out, has a higher population mean annual credit card charge?
   SelectGroceriesDining outItem 5
   
   What is the point estimate of the difference between the population means?
   $  
   
   What is the 95% confidence interval estimate of the difference between the population means (to the nearest whole number)?
   (  ,  )

Select one of the following companies, and use yahoo finance (or an alternate similar source) to locate and review the balance sheet, income statement and statement of cash flows from the past fiscal reporting year. This assignment should be prepared professionally and formatted well, and include proper citations for sources used. FOUR CHOICES ONLY I tried to select some good ones: • Adidas (manufacturing – sports mgmt) • Urban Outfitters (merchandising) • Sony Music Entertainment (for our music industry group) • Apple (for our computer science) 1. Using the financial statement information, calculate the following ratios for each of the prior two fiscal years. You must show the formula and the input data. Then, explain what the ratios may indicate for the company in 2-3 sentences for each one (be as specific as possible, and include chapter concepts such as liquidity, etc.). (7) also note that you DO NOT NEED TO AVERAGE ANY FORMULAS so if the formula reads: average inventory just take one inventory number from the financial s tatements. *Current Ratio *Inventory Turnover *Days in Receivables *Total Debt to Total Equity Ratio *Net Profit Margin *ROE *EPS (you do not have to calculate this one – you can research it online in the financials) 2. Select any two of above ratios, and then research the industry average for the ratio and compare it to your company’s. Show these comparisons in a chart or graph each. Explain what additional observations can be made based on this comparative information for your company in 3-4 sentences per ratio selected. (2) 3. Explain what other information you would want to have in order to make a better decision on the overall health of your company. You should include at least one additional ratio, and then 2 other quantitative or qualitative aspects for the business. (1)

Given the following information, create a personal cash flow projection:

A. You earn $26.00 per hour in an hourly position.

B. You can expect to work

a. 28 hours per week from January through June

b. 20 hours per week from July through October

c. 16 hours per week November and December

d. The company is closed for holidays for the last week of December and first week of January; 0 hours per week for those 2 weeks

C. Your net pay is 85% of your gross pay

D. Your rent is $1,000 per month and includes utilities

E. Groceries are $400 per month

F. Transportation (car/bus/gas) is $90 per month

G. Clothing (purchase/cleaning) is $1,000 per year

H. Miscellaneous purchases are $500 per month
Provide the following: 1. Prepare a monthly cash flow showing income and expenses 2. Can you save enough during the year to cover one month of expenses? 3. How much can you reasonably spend on entertainment (eating out, movies, concerts, theme parks, etc.) 4. Is there a positive cash flow in each month? Or do you need to save in some months to cover others? If so, which months are surplus, and which are short? 5. What are 3 things you can do to increase your income? 6. What are 3 things you can do to reduce your expenses? 7. Can you live a reasonably comfortable life within the financial boundaries set forth in the assignment? 8. How does your situation change is you add in $300 of student loan payments per month?

Assumptions embodied in the questions These questions address the short run effects of financial shocks and policy responses on the overall economic performance of a small open economy that initially runs a current account deficit. They refer to a length of run over which the productive capital stock is fixed, determined by previous investment. New investment creates expenditure on current GDP but does not yet affect current production capacity. External factor income flows net out at zero. Most questions require diagrams that represent the domestic financial capital market and the market for foreign exchange, interlinked by the balance of payments (BoP = CA + KA = 0), and the money market, interlinked in turn with the financial capital market by the interest rate. Unless otherwise stated, assume there is no expected inflation (πe = 0, so the nominal and real yields on long assets are equal, i = r), and assume at the outset that all markets clear, including the labour market, and hence the nominal wage, W, is flexible. Revise these assumptions only if and when instructed.

In a near zero-short-yield financial environment, and confronted with a pandemic, the government shuts down its entertainment services sector and enforces the shutdown by law.

a) Explain whether this shock arises from the supply or demand side of the economy.

b) Discuss the possible effects on financial markets. For example, would you expect yields and asset prices to rise or fall, and why?

c) Discuss whether generic expansionary fiscal and monetary policy could be effective in avoiding a subsequent recession.

d) Considering the zero short-yield environment, explain what types of policies would best address the economic effects of the shutdown.

e) If the government implements the policies you recommend, irrespective of the mix of instruments they embody, explain whether some monetary expansion might always be helpful during the shutdown and recovery period.