Preparation, Incubation, Illumination, Evaluation, and Implementation are the five steps to the creative process. No thinking about the five steps in the creative process, identify how Amazon CEO Jeff Bezos exemplified some or all of these steps in the creative process as elements of personal, political, and positional power to effect change in organizational culture.

Given the current trends in pay disparity, do you think laws should be enacted that limit the amount of CEO compensation to align with the average pay of the organizations’ employees? For example, CEOs could only make up to 40x that of the average employee? Why or Why don’t you think this is a good idea?

Budgeting

Describe your company's annual budget process.

• What is your involvement in the process?
• What works well? What doesn't work?
• If you were CEO/CFO, what changes would you make and why?
• How would you communicate to employees the value that the process brings to the business?

Assume today is December 31, 2019. Barrington Industries expects that its 2020 after-tax operating income [EBIT(1 – T)] will be $400 million and its 2020 depreciation expense will be $65 million. Barrington's 2020 gross capital expenditures are expected to be $100 million and the change in its net operating working capital for 2020 will be $20 million. The firm's free cash flow is expected to grow at a constant rate of 5% annually. Assume that its free cash flow occurs at the end of each year. The firm's weighted average cost of capital is 8.6%; the market value of the company's debt is $2.4 billion; and the company has 190 million shares of common stock outstanding. The firm has no preferred stock on its balance sheet and has no plans to use it for future capital budgeting projects. Also, the firm has zero non-operating assets. Using the corporate valuation model, what should be the company's stock price today (December 31, 2019)? Do not round intermediate calculations. Round your answer to the nearest cent.

$ ____ per share.

Quantitative Problem 2: Hadley Inc. forecasts the year-end free cash flows (in millions) shown below. Year 1 2 3 4 5 FCF -$22.23 $38.6 $44 $51.1 $55.8 The weighted average cost of capital is 9%, and the FCFs are expected to continue growing at a 4% rate after Year 5. The firm has $26 million of market-value debt, but it has no preferred stock or any other outstanding claims. There are 21 million shares outstanding. Also, the firm has zero non-operating assets. What is the value of the stock price today (Year 0)? Round your answer to the nearest cent. Do not round intermediate calculations.

$ ____ per share.

Question 6

Production Inc. has a year end date of June 30 and produces small electronic music parts. The company records depreciation to the nearest whole month in the year a capital assets is purchased. On March 20, 2016, they purchased and put into use a new production machine by spending the following amounts:

Invoice price of the machinery (purchase terms 1/10, n30) - paid March 25 $190,000

Freight to have the machinery delivered to Production's facility 5：000

Duty upon shipment of the machinery to Production's facility 4,900

Damage as a result of an employee dropping his Starbuck's latte

into the motor of the new machinery 3,000

Cost of mounting the machinery on a permanent platform in the warehouse 2,000

The management of Production Inc. has made the following assumptions:

Years the machine is expected to be used in the business 5 years

Number of products the machinery is expected to produce 1,000,000

Expected salvage value at the end of 5 years $50,000

REQUIRED:

Compute depreciation under each of the following three methods for the first 5 year ends of Production Inc. following the purchase of the machine.

Assume for the units of output method that the number of products produced in each of the following business years are as follows:

2016 80,000 units 2017 250,000 units

2018 245,000 units 2019 205,000 units

2020 225,000 units

Sky High Parachute Company sells parachutes. As of January 1, Sky High had no beginning merchandise inventory. In the first quarter of 2020, Sky High sold 6,500 parachutes. The company’s sales forecast for the remainder of 2020 (in units) is:

Quarter 2: 7,000        Quarter 3: 7,500          Quarter 4: 9,000

Sky High’s selling price is $400 per parachute. All sales are credit sales. Sky High collects 85% of its sales in the quarter in which it made the sales and the remaining 15% in the following quarter.

As of March 31/April 1, Sky High had 1,300 parachutes in its merchandise inventory that it had purchased for $340 each. Sky High expects to pay its vendor $340 per parachute for the remainder of the year. Sky High plans to have the following number of parachutes in its merchandise inventory at the end of the remaining quarters in 2020.

Quarter 2: 1,500        Quarter 3: 2,000          Quarter 4: 1,000

Sky High buys the parachutes on credit. It pays for half of its purchases in the same quarter as it purchases them and pays the remaining half in the following quarter. Sky High pays for all its other expenses in the same quarter as it incurs them.

Sky High’s budget for variable selling expenses is $10 per each parachute sold. Sky High’s budget for fixed selling, general and administrative expenses is $25,000 each quarter. The $25,000 budget includes $5,000 in depreciation expense each quarter.

Please prepare the following budgets for Sky High for the second quarter of 2020 (Each question is worth 4 points):

1. Sales in dollars
2. Purchases of parachutes in units and dollars
3. Selling and Administrative Expenses in dollars
4. Cash collections (receipts) budget in dollars
5. Cash payments (disbursements) budget in dollars

Walmart purchased a piece of equipment on January 1, 2015 for $34,000,000. Management estimates that the equipment will have a useful life of eight years and a $4,000,000 salvage value. The depreciation expense recorded for tax purposes is computed using the double-declining balance method of depreciation. The company uses the straight-line method of depreciation for reporting purposes. The company’s fiscal year from January 1 toDecember 31.

Calculate the amount of depreciation expense for reporting purposes for the year ending December 31, 2020 (i.e., the 6th full year of depreciation). Then calculate the amount of depreciation expense for tax purposes for the year ending December 31, 2020 (i.e., the 6th full year of depreciation). Use this information to determine the correct answers to the following two (2) questions:

1. Will a deferred tax asset or a deferred tax liability be created for the year ending December 31, 2020 as a result of the depreciation recorded for tax and financial reporting purposes?

   1. Deferred tax asset

   2. Deferred tax liability

2. According to the Double Declining Balance depreciation schedule that Walmart used compute depreciation expense for tax purposes, what was the ending book value of this piece of equipment on December 31, 2017? Round your answer to 0 decimal places.

3. According to the Straight-Line method of depreciation that Walmart used compute depreciation expense for reporting purposes, what was the ending book value of this piece of equipment on December 31, 2019? Round your answer to 0 decimal places.

4. Assuming that the company’s tax rate is 21%, what dollar amount (as an absolute value) will be added (if your answer to the prior question was “a”) or subtracted (if your answer to the prior question was “b”) to the deferred tax account on the December 31, 2020 balance sheet as a result of the depreciation timing difference? Round your answer to 0 decimal places.

Sheridan Ltd. purchased a new machine on April 4, 2017, at a cost of $164,000. The company estimated that the machine would have a residual value of $16,000. The machine is expected to be used for 14,800 working hours during its four-year life. Actual machine usage was 1,400 hours in 2017; 2,100 hours in 2018; 2,400 hours in 2019; 2,300 hours in 2020; and 2,000 hours in 2021. Sheridan has a December 31 year end.

Calculate depreciation for the machine under each of the following methods: (Round expense per unit to 2 decimal places, e.g. 2.75 and final answers to 0 decimal places, e.g. 5,275.)

(1) Straight-line for 2017 through to 2021.

(2) Diminishing-balance using double the straight-line rate for 2017 through to 2021.

(3) Units-of-production for 2017 through to 2021.

3. Which method results in the highest depreciation expense over the life of the asset? Highest net income? Highest cash flow?

4. Which method results in the highest net income?

5. Which method results in the highest cash flow?

1. The manager of a company dinner club would like to have an information system that assists him to plan the meals and to keep track of who attends the dinners, and so on.

Because the manager is not an IS expert, the following table is used to store the information. As a member can attend many dinners and a member will not attend more than 1 dinner on the same date, the primary key of the following table is Member ID and Dinner ID. Dinners can have many courses, from one-course dinner to as many courses as the chef desired.

1. Transform the table above into first normal form 1NF. (To do this, check if there are multivalued attributes and transform the table to get rid of them)
   1. Identify the dependencies and which type they are (full dependencies, partial dependencies, transitive dependencies
2. Transform the table above into second normal form 2NF. (To do this separate partial dependencies into separate tables).
3. Transform the table above into third normal form 3NF. (To do this, remove the transitive dependencies by creating separate tables and relate them with the common attribute)