Ben Bates graduated from college six years ago with a finance undergraduate degree. Although he is satisfied with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to achieve this goal. After examining schools, he has narrowed his choice to either Wilton University or Mount Perry College. Although internships are encouraged by both schools, to get class credit for the internship, no salary can be paid. Other than internships, neither school will allow its students to work while enrolled in its MBA program. Ben currently works at the money management firm of Dewey and Louis. His annual salary at the firm is $65,000 per year, and his salary is expected to increase at 3 percent per year until retirement. He is currently 28 years old and expects to work for 40 more years. His current job includes a fully paid health insurance plan, and his current average tax rate is 26 percent. Ben has a savings account with enough money to cover the entire cost of his MBA program. The Ritter College of Business at Wilton University is one of the top MBA programs in the country. The MBA degree requires two years of full-time enrollment at the university. The annual tuition is $70,000, payable at the beginning of each school year. Books and other supplies are estimated to cost $3,000 per year. Ben expects that after graduation from Wilton, he will receive a job offer for about $110,000 per year, with a $20,000 signing bonus. The salary at this job will increase at 4 percent per year. Because of the higher salary, his average income tax rate will increase to 31 percent. The Bradley School of Business at Mount Perry College began its MBA program 16 years ago. The Bradley School is smaller and less well known than the Ritter College. Bradley offers an accelerated, one-year program, with a tuition cost of $85,000 to be paid upon matriculation. Books and other supplies for the program are expected to cost $4,500. Ben thinks that he will receive an offer of $92,000 per year upon graduation, with an $18,000 signing bonus. The salary at this job will increase at 3.5 percent per year. His average tax rate at this level of income will be 29 percent. Both schools offer a health insurance plan that will cost $3,000 per year, payable at the beginning of the year. Ben also estimates that room and board expenses will cost $2,000 more per year at both schools than his current expenses, payable at the beginning of each year. The appropriate discount rate is 6.3 percent.

3. Assuming all salaries are paid at the end of each year, what is the best option for Ben— from a strictly financial standpoint?

4. Ben believes that the appropriate analysis is to calculate the future value of each option. How would you evaluate this statement?

5. What initial salary would Ben need to receive to make him indifferent between attending Wilton University and staying in his current position?

6. Suppose, instead of being able to pay cash for his MBA, Ben must borrow the money. The current borrowing rate is 5.4 percent. How would this affect his decision?

It has to be from 500 to 800 words

A woman named Elizabeth Holmes, and the company she founded, Theranos have been in the news. No one is arguing about whether or not Elizabeth Holmes is an exceptionally intelligent woman—she has an excellent resume on smarts. Nor is anyone arguing about her idea—everyone agrees the idea is fantastic. If—that is—the idea is real. Apparently it isn't, and it never was.

But her company, once worth billions, is now worthless. Countless investors lost millions of dollars. The company she founded is in receivership, and she is facing federal charges.

Your assignment:

As a preliminary issue, if you don’t know who she is, what company she founded, the product she sold, and what happened to that company (or allegedly happened, if you want to put it that way), then research these issues and familiarize yourself.

In your essay, explain what it was that she allegedly did wrong and why it was wrong. Then—and this is the part that requires some thought on your part—explain how this could happen. How could so many smart people be taken in? How could so many smart people go along with what she was doing, and having them do? How could so many smart people decide that what they did was the right thing to do? Lastly, create a plan by which you can make sure this does not happen in your company. You should take the issue from both sides, both from the position of the entrepreneur (who wishes to bring investors in and sell new and innovative products) and also from the position of an investor (who wants to make money by investing in new and innovative products).

In addition to the parameters for grading set out above, I will be giving credit to those students who are able recognize the real-life, real-business pressures that cause events like this to happen, and who make honest attempts at real-world solutions.   

The underlying issues in this assignment are twofold: first, that you begin to recognize the factors underlying professional, ethical decision-making in the business environment, including the many pressures and stakeholders in the decisions you will make; second, that you continue to develop your ability to articulate those factors in an intelligent, coherent, and persuasive manner.

Trans Atlantic Metals has two operating divisions. Its forging operation in Finland forges raw metal, cuts it, and then ships it to the United States where the company’s Gear Division uses the metal to produce finished gears. Operating expenses amount to $21.4 million in Finland and $61.4 million in the United States exclusive of the costs of any goods transferred from Finland. Revenues in the United States are $164 million.

If the metal were purchased from one of the company’s U.S. forging divisions, the costs would be $31.4 million. However, if it had been purchased from an independent Finnish supplier, the cost would be $41.4 million. The marginal income tax rate is 70 percent in Finland and 30 percent in the United States.

Required:

What is the company’s total tax liability to both jurisdictions for each of the two alternative transfer pricing scenarios ($31.4 million and $41.4 million)? (Enter your answers in dollars and not in millions of dollars.)

Total Tax Liability for 31.4:

Total Tax liability for 41.4:

Ben Bates graduated from college six years ago with a finance undergraduate degree.

Although he is satisfied with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to achieve his goal. After examining schools, he has narrowed his choice to either Wilton University or Mount Perry College. Although internships are encouraged by both schools, to get class credit for the internship, no salary can be paid. Other than internships, neither school will allow its student to work while enrolled in its MBA program.

Ben currently works at the money management firm of Dewey and Louis. His annual salary at the firm is $70,000 per year, and his salary is expected to increase at 3 percent per year until retirement. He is currently 28 years old and expects to work for 37 more years. His current job includes a fully paid health insurance plan, and his current average tax rate is 28 percent. Ben has a savings account with enough money to cover the entire cost of his MBA program.

The Ritter College of Business at Wilton University is one of the top MBA programs in the country. The MBA degree requires two years of full-time enrollment at the university. The annual tuition is $65,000, payable at the beginning of each school year. Books and other supplies are estimated to cost $2,000 per year. Ben expected that after graduation from Wilton, he will receive a job offer for about $100,000 per year, with a $10,000 signing bonus. The salary at this job will increase at 4% per year. Because of the higher salary, his average income tax rate will increase to 32 percent.

The Bradley School of Business at Mount Perry College began its MBA 16 years ago. The Bradley School is smaller and less well known than the Ritter College. Bradley offers an accelerated, one-year program, with a tuition cost of $75,000 to be paid upon matriculation. Books and other supplies for the program are expected to cost $3,000. Ben thinks that he will receive an offer of $85,000 per year upon graduation, with a $10,000 signing bonus. The salary at this job will increase at 3.5 percent. His average tax rate at this level of income will be 30 percent.

Both schools offer a health insurance plan that will cost $2,500 per year, payable at the beginning of the year. Ben also estimates that room and board expenses will cost $15,000 per year at either school. The appropriate discount rate is 6 percent.

Assuming all salaries are paid at the end of each year, what is the best option for Ben

– from a strictly financial standpoint?

For most of the Cold War, Finland conducted a policy of “self-restraint” regarding the Soviet Union, meaning it did not adopt any foreign policies that it thought the Soviet Union would not like. Say Finland’s ideal point for Soviet control over its autonomy was zero (i.e. no Soviet control) and the Soviet Union’s ideal point for its control over Finland was one (i.e. complete control). Finland’s utility is U_F = 1-x and the Soviet Union’s utility is U_S = x. If there is a war, the winner sets the policy at its ideal point.

b) What is Finland’s expected utility of war? What is the Soviet Union’s expected utility of war? What is the bargaining range?   How does this example help you understand Finland’s “self-restraint?”

(Chapter 4) You are an individual investor who is bullish on the finance sector of the US equity market. Rather than purchase shares of stock of several individual firms in the sector, you decide to reduce trading costs by purchasing XLF, a US finance sector equity ETF. How can you be confident that the price of the XLF will closely track the net asset value (NAV) of the underlying shares of stock in the benchmark index?

Mahesh graduated from college six years ago with a finance undergraduate degree. Although he is
satisfied with his current job, his goal is to become a banker. He feels that MBA degree would allow
him to achieve this goal. After examining business schools, he has narrowed his choice to Kathmandu
University, school of management, one of the renowned University in Nepal. Although internships are
encouraged by the school, to get class credit for the internship, no salary can be paid. Other than
internship, neither school will allow its students to work while enrolled in its MBA program. Assume
it is now January 1, 2020 and he is planning to accumulate Rs 710,000 including college fees and other
stationery expenses for an MBA in January 2025. Today he is thinking for a deposit in a bank that pays
11 per cent nominal interest rate. The source of income that he received quarterly from his current job
is Rs 65,000. Out of his quarterly income he spends 65 per cent amount for his living. His mother has
also deposited Rs 200,000 in his account to facilitate his MBA degree. In order to attain his goal, you
are required to answer the following: [1+2+2+2+1+2=10]
a. How much must he deposit in lump sum on January 1, 2020 to accumulate a university fees along
with stationery expenses of Rs 710,000 on January 1, 2025?
b. If Mahesh wants to make equal installments on each January 1 from 2021 through 2025, how large
must each payment be?
c. If he wants to invest his quarterly salary net saving in the bank, the first payment being made at the
end of first quarter from now, how much he could accumulate in January 1, 2025? Assuming that
interest is compounded on quarterly basis.
d. What is the effective annual rate if interest is compounded monthly? Explain the difference
between annual percentage rate and effective annual rate.
e. If his bank balance of Rs 200,000 today pays 9 per cent annual interest compounded monthly, to
which value it will grow on January 1, 2025?
f. A dollar in hand today is worth more than a dollar to receive next year. Give your arguments.

Expectations play a huge role in our careers as well as the people around us. Having an MBA will grant you access to positions that you might not have been able to obtain before. Write on Paragraph about what your expectation is for your career once you obtain an MBA and another about how co-workers have played a role in your success.

HYPOTHESIS TESTING SUMMARY ACTIVITY

Part 1: Overview of the Hypothesis Test for the Population Proportion Answer the following questions:

1) The general form of the test statistic for the hypothesis test for a population proportion is shown below. Label the different components of the test statistic.

2) For the following situations, state the null and alternative hypothesis. Then determine whether the alternative hypothesis is one-sided or two-sided.

a) A toy manufacturer claims that 23% of the 14-year-old residents of a certain city own a skateboard. A sample of fifty 14-year-olds shows that nine own a skateboard. Is there enough evidence to show that the percentage has changed?

b) At a large university, a study found that 25% of the students who commute travel more than 14 miles to campus. Recently, the university built more housing closer to campus so they believe that the proportion has decreased.

c) For students who first enrolled in two-year public institutions in fall 2007, the proportion who earned a bachelor’s degree within 6 years was 0.399. The president of Joliet Junior College believes that the proportion of students who enroll in her institution have a higher completion rate.

3) Use the information in question 2a (toy manufacturer) to answer the following questions.

a) Calculate the test statistic and draw a diagram with a normal curve to represent the sampling distribution of ??� in the context of this situation.

b) If the sample size of the survey was increased, would the test statistic increase or decrease? Would it give us more or less evidence against H0 ?