1) Suppose the domestic supply (QS U.S.) and demand (QDU.S) for bicycles in the United States is represented by the following set of equations:
QS U.S. = 2P
QDU.S. = 200 – 2P.
Demand (QD) and supply (QS) in the rest of the world is represented by the equations:
QS = P
QD =160 – P. Quantities are measured in thousands and price, in U.S. dollars. After the opening of free trade with the United States, if the world price of the bicycles settles at $60, answer the following questions:
a. What are the equilibrium price and quantity for US and ROW if there is no international trade? Draw the demand and supply curves on the graph, and label these points.
b. What are the quantities of the import and export if they can trade freely with the price of $60?
c. What is the effect of the shift from no trade to free trade on US consumer surplus? On producer surplus? What is the net national gain or loss for US?
d. Calculate the net benefit for US and ROW after trade to support your answers.
In: Economics
Which of the following is a consequence of a country running fiscal deficits? Lower balance of trade Higher trade deficits Higher national debt Less innovation
| Lower balance of trade |
| Higher trade deficits |
| Higher national debt |
|
Less innovation when we talk about the Rust Belt that stretches across parts of the Midwest and Northeast in the US, the description comes from the fact that cities and towns tend to have problems with:
|
In: Economics
ANALYZE/INTERPRET THE STUDY AS WELL AS YOUR CONCLUSIONS FROM YOUR CALCULATIONS
DVR’s allow us to skip commercials when watching TV. Some also allow advertisers to see which ads are actually watched. Advertising research indicates that an ad has to be viewed by more than 5% of households to be cost effective (at the very least break even) in the long run. A sample of 250 homes in Cincinnati were monitored to determine viewers’ reactions to a fast food commercial that featured a well-known band. The data revealed 20 of the homes actually viewed the ad
On the basis of this study, will the ad be cost effective for the company? Use the 0.01 significance level.
In: Statistics and Probability
Strategic Management ABB, headquartered in Zurich, Switzerland, is a major competitor in the power and automation technologies industries across the major markets globally. It has 140,000 employees operating in almost 100 countries. In fact, it has five major businesses—power products, power systems, discrete automation, low voltage products, and process automation. It operates in eight major regions: (1) Northern Europe, (2) Central Europe, (3) the Mediterranean, (4) North America, (5) South America, (6) India, the Middle East, and Africa, (7) North Asia, and (8) South Asia. Over time, ABB has been a successful company using its geographic diversification across the globe to its advantage. It also exemplifies the difficulty of managing an international strategy and operations. For example, its power systems business has experienced performance problems in recent years due to poor performance in some countries due primarily to the economy downturn. Notwithstanding the difficulty of managing in emerging economies, much of its growth is focused on improving country infrastructure such as power systems and grids. In 2014, the firm announced that the Asia, Middle East, and Africa (AMEA) region currently contributes about 37 percent of ABB’s total revenue, or about $15.3 billion, and “emerging markets were planned to contribute to two-thirds of the forecast growth between 2015 and 2020.” In recent years, most of ABB’s entries to new mar- kets and expansions in existing markets have come from acquisitions of existing businesses in those mar- kets. Recently, it acquired Siemens’ solar energy busi- ness, Power-One, and U.S.-based Los Gatos Research, a manufacturer of gas analyzers used in environmental monitoring and research. The purchase of Power-One represents a major risk as the solar power industry is in a downturn. Yet some analysts predict a brighter future for the industry over the long term. ABB also uses other modes of entry and expansion, exemplified by the 2013 joint venture with China’s Jiangsu Jinke Smart Electric Company to design, manufacture, and provide follow-up service on high voltage instrument transformers. It also recently procured major contracts for business in Brazil and South Africa. Partly due to the global economic recession that began in 2008, recent weak economic performance, and some poor expansion decisions, ABB’s performance has been weaker than expected. As a result, the CEO and chief technology officer announced their resignations in 2013. Despite these changes, ABB is a highly respected global brand, and, after its recent changes (e.g., closing some country operations), its revenues and earnings have started to rise. These positive changes have been largely attributed to the success of its North American businesses. Its acquisitions of Baldor (maker of indus- trial motors) in 2010 and Thomas & Betts in 2012 greatly enhanced its North American operations and revenues. It has also had success in manufacturing equipment and robots with its robotics business headquartered in the United States. It is even moving to help small com- panies, such as ones in the beer industry, to automate their production processes. Therefore, even in turbulent times, ABB’s future looks bright. Case study: An International Strategy Powers ABB’s Future 1. What are the dominant reason’s for ABB to enter into international markets? 2. Which corporate international strategy would you classify ABB as using? Explain your answer. 3. Why has ABB used acquisitions and joint ventures as dominant entry modes in international markets? 4. What are the main political and economic risks that ABB must deal with given that it has a strong focus on entering emerging economies? 5. What are the significant organizational complexities that ABB encounters as it tries to manage its international strategy?
In: Operations Management
On January 1, 2020, Winthrop Inc. entered into a lease agreement to lease equipment:
Required:
In: Accounting
On January 1, 2020, Winthrop Inc. entered into a lease agreement to lease equipment:
Required:
In: Accounting
On January 1, 2020, Winthrop Inc. entered into a lease agreement to lease equipment:
Required:
In: Accounting
On January 1, 2020, Winthrop Inc. entered into a lease agreement to lease equipment:
Required:
In: Accounting
If Susie earns $750,000 in taxable income, how much tax will she pay as a single taxpayer for year 2020? (Use tax rate schedule)
Marc, a single taxpayer, earns $60,000 in taxable income and $5,000 in interest from an investment in city of Birmingham Bonds. Using the U.S. tax rate schedule for year 2020, what is his average tax rate (rounded) & effective tax rate (rounded)
3. Jamie is single. In 2020 , she reported $100,000 of taxable income, including a long-term capital gain of $5,000. What is her gross tax liability, rounded to the nearest whole dollar amount? (Use the tax rate schedules,long term capital gains tax brackets)
In: Accounting
Ivanhoe Inc. operates a retail computer store. To improve its delivery services to customers, the company purchased four new trucks on April 1, 2020. The terms of acquisition for each truck were as follows:
| 1. | Truck #1 had a list price of $27,200 and was acquired for a cash payment of $25,500. | |
| 2. | Truck #2 had a list price of $28,800 and was acquired for a down payment of $2,100 cash and a non–interest-bearing note with a face amount of $26,700. The note is due April 1, 2021. Ivanhoe would normally have to pay interest at a rate of 10% for such a borrowing, and the dealership has an incremental borrowing rate of 8%. | |
| 3. | Truck #3 had a list price of $22,900. It was acquired in exchange for a computer system that Ivanhoe carries in inventory. The computer system cost $17,000 and is normally sold by Ivanhoe for $19,100. Ivanhoe uses a perpetual inventory system. | |
| 4. | Truck #4 had a list price of $23,400. It was acquired in exchange for 1,000 common shares of Ivanhoe Inc. The common shares trade in an active market valued at $22 per share in the most recent trade. |
Click here to view the factor table PRESENT VALUE OF 1.
Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF
1.
(a)
Prepare the appropriate journal entries for Ivanhoe Inc. for the
above transactions, assuming that Ivanhoe prepares financial
statements in accordance with IFRS. For Truck #2, calculate the
purchase price using any of the three methods (tables, financial
calculator, or Excel). (Credit account titles are
automatically indented when the amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the
account titles and enter 0 for the amounts. Round factor values to
5 decimal places, e.g. 1.25124 and final answers to 0 decimal
places, e.g. 5,275.)
|
No. |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
1. |
enter an account title to record purchase of Truck #1 | enter a debit amount | enter a credit amount |
| enter an account title to record purchase of Truck #1 | enter a debit amount | enter a credit amount | |
|
(To record purchase of Truck #1.) |
|||
|
2. |
enter an account title to record purchase of Truck #2 | enter a debit amount | enter a credit amount |
| enter an account title to record purchase of Truck #2 | enter a debit amount | enter a credit amount | |
| enter an account title to record purchase of Truck #2 | enter a debit amount | enter a credit amount | |
|
(To record purchase of Truck #2.) |
|||
|
3. |
enter an account title to record purchase of Truck #3 | enter a debit amount | enter a credit amount |
| enter an account title to record purchase of Truck #3 | enter a debit amount | enter a credit amount | |
|
(To record purchase of Truck #3.) |
|||
| enter an account title to record the cost of sold goods | enter a debit amount | enter a credit amount | |
| enter an account title to record the cost of sold goods | enter a debit amount | enter a credit amount | |
|
(To record the cost of sold goods.) |
|||
|
4. |
enter an account title to record purchase of Truck #4 | enter a debit amount | enter a credit amount |
| enter an account title to record purchase of Truck #4 | enter a debit amount | enter a credit amount | |
|
(To record purchase of Truck #4.) |
In: Accounting