Evergreen Corporation is preparing the master budget for the third quarter ending March 31, 2009.  It sells a single product for $20 a unit.  Sales are 25% cash and 75% credit.  The credit sales are collected 30% in the month of the sale and the remaining 70% is collected in the next month.  No credit sales occurred in December 2008. The December 31 inventory of finished goods is 15,000 units and projected sales are 20,000, 55000, 65,000, 75,000, and 85,000 units for the first  months of the year.  The desired ending inventory for each month is 35% of the next month's sales. The inventory of Finished Goods expected to be on hand on April 30 is 10,500 units.  Each Finished Unit requires 2 kilograms of materials at a cost of $1.00 per kilo and it takes 15 minutes to complete one unit.  Evergreen anticipates having 20,000 kilos of materials on hand at December 31, 2008.  The company requires 15% of the next month production materials needs to be available before the start of the month.  Labour is paid at the rate of $9.00 per hour and is paid when incurred.  Production overhead is incurred based on units of production and costs $1.50 per unit. Sixty percent of the purchases are paid in the month of purchase and 40% are paid in the following month.  Purchases in December 2008 were $232,500.

Operating expenses are paid in the month incurred and consist of sales commissions (8% of sales), shipping cost (4% of sales), office salaries of $15,000 a month, advertising of $2,800 per month,  and amortization of $3,200 per month, and other miscellaneous expenses of $4,500 per month.  The cash balance must not be negative. The beginning cash balance is $48,000.  Loans are obtained at the end of the month in which a cash shortage occurs and are made in even multiples of $1,000.  Interest is 1% per month based on the beginning-of-month loan balance and must be paid at the end of each month when the loan is repaid.   Evergreen paid $4,000 in cash dividends in January and purchased land for $150,000 in March paying cash.

Define these business finance terms in your own words and then give a real world example of each: Liquidity, Matching Principle, Net Capital Spending, and Operating Cycle.

When looking at changes in the level of spending, this can directly influence an economy. What are some of the challenges that firms will be facing when consumers start to spend more money?

1. Explain the concept of the price level, how it is measured, and how it relates to aggregate demand
2. Considering aggregate demand, what is the relationship between total spending and the price level?

Are class diffrences are clearly defined in america, if Yes does this have an impact on consumer behave and how does aspirational consumer spending affcet our overall economy?

Discuss any recent Economic Activity (taxes or spending) made by the United States government and the effect this has had on the Industry of Public Transportation. Please explain in detail.

6. When a government engages in an expansionary fiscal policy, it cuts government spending and raises taxes in order to reduce its budget deficit.

a. True

b. False

7. What is the result of the spending multiplier if investment comes from savings?

8. Approximately how long is the period of the average real-estate-related business cycle?