The NSW Government is building a new airport in Western Sydney. The airport will take 6 years to build and require $1.5 billion in outlays at the end of each of those 6 years. The airport is expected to produce revenue of $2 billion in years 7 and 8 and then $3.5 billion per annum in perpetuity from year 9 onwards. What is the value of this investment now to the NSW Government if the cost of capital is 11% p.a. compounded annually?

Tacks Limited Corp. has pretax income for the current year of $1,500,000. The company recorded straight-line depreciation expense of $150,000. The tax allowance is $300,000. Tax-exempt revenue is $225,000 included in net income.The company also had an impaired asset write-down of $50,000 which is not deductible for tax purposes. Based on this information and a 34% statutory tax rate, the firm's taxable income and net deferred tax implications are

Which of the following statement is TRUE?

a) A perfectly competitive firm is a price SETTER, while a monopoly is a price TAKER

b) A perfectly competitive firm faces market demand, while a monopoly faces a perfectly elastic demand

c) Both monopoly and perfectly competitive firm faces market demand

d) Both monopoly and perfectly competitive firm should produce at output level where marginal revenue = marginal cost

The market for hotels in Sacramento is described by the following equations: Qd=80−P and Qs=2P−100

(a) What is the equilibrium price and quantity?

(b) Suppose the city places a $2 tax on hotel rooms. How much do consumers now pay? How much do producers receive? How much tax revenue is raised by the tax?

(c) Based on your answer to part (b) is supply or demand more elastic?

3. Suppose firm F has the following marginal cost: MC = 2 + 6Q

a. Suppose it is a Competitive Market and the equilibrium price p* = 26. How many units would F produce?

b. Now suppose it is a Monopolist market and the marginal revenue is given by MR = 102 - 4Q?

c. Theoretically, would you suppose the monopolist case would yield a higher price or lower than the competitive market?

Imagine a profit-maximizing monopoly operating under the following conditions. The price which maximizes profit is $12. The marginal revenue (MR) curve and marginal cost (MC) curve intersect where the quantity of output is 10 units and marginal cost is $6. The socially efficient quantity of production is 14 units. The demand curve and MC curves are linear. What is the size of the deadweight loss created by this monopolist?

$4

$6

$12

$16

Edgar needs to close out $670 in the dividends account at the end of the year. What closing entry will he use? a. Income summary (debit) 670; dividends (credit) 670 b. Retained earnings (debit) 670; dividends (credit) 670 c. Dividends (debit) 670; income summary (credit) 670 d. Revenue (debit) 670; dividends (credit) 670 e. Cash (debit) 670 ;dividends (credit) 670

Consider the following transactions for Huskies Insurance Company:

a. Equipment costing $40,800 is purchased at the beginning of the year for cash. Depreciation on the equipment is $6,800 per year.

b. On June 30, the company lends its chief financial officer $48,000; principal and interest at 5% are due in one year.

c. On October 1, the company receives $15,200 from a customer for a one-year property insurance policy. Deferred Revenue is credited.

7. On January 1, 2017, Spartan Company signed a $240 million contract with the City of Amherst to construct a new city hall. Spartan expects to construct the building within two years and incur total expenses of $180 million. Spartan incurred $72 million in construction costs during 2017 and the remaining $108 million in 2018. Using the percentage-of-completion method, how much revenue should Spartan recognize in 2017?