1. In an imaginary economy, consumers buy only hot dogs and hamburgers. The fixed basket consists of 15 hot dogs and 8 hamburgers. A hot dog cost $2.25 in 2006 and $5.40 in 2007. A hamburger cost $5.75 in 2006 and $7.86 in 2007. Calculate the CPI for both years and then find the inflation rate.

2. In an imaginary economy, consumers buy only sandwiches and magazines. The fixed basket consists of 25 sandwiches and 40 magazines. In 2006, a sandwich cost $4.50 and a magazine cost $3.99. In 2007, a sandwich cost $5.75. If the inflation rate in 2007 was 21 percent, then how much did a magazine cost in 2007?

3. When Anders took out his first two-year membership with Maxima Gym in 2004, the fee was $525.00. He renewed his membership three times; in 2006 for $580.00, in 2008, for $600.00, and again in 2010, for $699.00. What is the OVERALL rate of inflation for Anders' gym membership?

4. In 1949, Sycamore, Illinois built a hospital for about $500,000. In 1987, the county restored the courthouse for about $2.4 million. A price index for nonresidential construction was 12 in 1949, 96 in 1987, and 117.5 in 2000. Calculate the value of the courthouse in 2000 dollars and the value of the hospital in 2000 dollars and compare your answers. Which one cost more?

5. Ruben earned a salary of $60,000 in 2001 and $80,000 in 2006. The consumer price index was 156 in 2001 and 227.25 in 2006. What is Ruben's 2006 salary in 2001 dollars? What does this mean about how his purchasing power increased or decreased?

Understanding how the American university culture affects students requires analyzing the cultural norms that students bring to college and how these norms interact with the norms institutionalized in university settings. Cultural models of self—implicit understandings of oneself in relation to others and the social context—are one important source of these individual and institutional norms (Cross & Madson, 1997; Markus & Kitayama, 2010). Research conducted in a variety of cultural contexts has identified two common models of self that provide culture-specific norms for how to think, feel, and act (Markus & Kitayama, 1991). The independent model of self assumes that the normatively appropriate person should influence the context, be separate or distinct from other people, and act freely based on personal motives, goals, and preferences (Markus & Kitayama, 2003). In contrast, the interdependent model of self assumes that the normatively appropriate person should adjust to the conditions of the context, be connected to others, and respond to the needs, preferences, and interests of others. The independent and interdependent models both constitute sets of social norms, each providing a different guide or blueprint for how people should relate to others and to the social world (Adams, Anderson, & Adonu, 2004).

1. The above passage indicates two different sets of social norms. What are they?

2. Compare and contrast each set of social norms with the axiology of economics.

3. Which set of social norms is less similar to that axiology?

4. What would that predict the success of first-generation college students who study economics?

In the Clean Air Act as amended, Congress allowed California, which has serious problems with air quality, to adopt its own standards for emissions from cars and trucks, subject to the approval of the Environmental Protection Agency (EPA) according to certain standards. The Act also allowed other states to adopt California’s standards after EPA approval. In 2004, California adopted emissions standards for all new passenger vehicles and lightduty trucks sold in California beginning in 2009. The standards imposed decreasing limits on emissions of carbon dioxide and other greenhouse gases (GHG) through 2016. While EPA approval was pending, other states adopted the California standards. A group of industry associations, automakers, and new car dealerships filed suit to block state adoption of the standards (including California). (a) Under the Environmental Policy and Conservation Act (EPCA), a designated federal agency sets fuel economy standards for new cars. The plaintiffs argued, among other things, that the EPCA, which explicitly prohibits states from adopting separate fuel economy standards, preempts states from adopting their own emission standards. Is the plaintiffs’ argument valid? Discuss. (b) Do the state emissions rules impose on the efforts of the federal government to address global warming internationally? Who should regulate GHGs, the states or the federal government? Both? Neither? Discuss. (c) The plaintiffs also argued that they would go bankrupt if they were forced to adhere to a different GHG standard for each state. Should they be granted relief on this basis? Does history support their claim? Discuss.

1. An instructor grades exams, 20%; term

paper, 30%; final exam, 50%. A student had grades of

83, 72, and 90, respectively, for exams, term paper, and

final exam. Find the student’s final average. Use the

weighted mean.

2. Stories in the Tallest Buildings The number of

stories in the 13 tallest buildings for two different

cities is listed below. Which set of data is more

variable?

Houston: 75, 71, 64, 56, 53, 55, 47, 55, 52, 50, 50, 50, 47

Pittsburgh: 64, 54, 40, 32, 46, 44, 42, 41, 40, 40, 34, 32, 30

3. Americans spend an average of

3 hours per day online. If the standard deviation is

32 minutes, find the range in which at least 88.89%

of the data will lie. Use Chebyshev’s theorem.

4. The average farm in the United States in

2004 contained 443 acres. The standard deviation is

42 acres. Use Chebyshev’s theorem to find the

minimum percentage of data values that will fall in

the range of 338–548 acres.

5. The average age of senators in

the 108th Congress was 59.5 years. If the standard

deviation was 11.5 years, find the z scores

corresponding to the oldest and youngest senators:

Robert C. Byrd (D, WV), 86, and John Sununu

(R, NH), 40.

      7. Which score indicates the highest relative position?

a. A score of 3.2 on a test with mean 4.6 and

s 1.5

b. A score of 630 on a test with mean 800 and

s 200

c. A score of 43 on a test with _mean 50 and s 5

Sachs Brands’ defined benefit pension plan specifies annual retirement benefits equal to: 1.6% × service years × final year’s salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2004 and is expected to retire at the end of 2038 after 35 years’ service. Her retirement is expected to span 18 years. Davenport’s salary is $90,000 at the end of 2018 and the company’s actuary projects her salary to be $240,000 at retirement. The actuary’s discount rate is 7%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Required: 1. What is the company's projected benefit obligation at the beginning of 2018 (after 14 years' service) with respect to Davenport? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

2. Estimate by the projected benefits approach the portion of Davenport's annual retirement payments attributable to 2018 service.

3. What is the company's service cost for 2018 with respect to Davenport? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

4. What is the company's interest cost for 2018 with respect to Davenport? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

5. Combine your answers to requirements 1, 3, and 4 to determine the company's projected benefit obligation at the end of 2018 (after 15 years' service) with respect to Davenport.

Your client, Mary Barnhart, wants to open her own business. She is having difficulty understanding the purposes of financial statements and how they fit together across time. REQUIRED: Write a one-page letter to Ms. Barnhart explaining the purposes of the income statement, statement of owners' equity, and the balance sheet and how they are linked. Use the attached example for guidance.

Henry Whiteapples

123 Maple Street

Columbus, OH, 45888

December 21, 2004

Dear Mr. Whitebridge,

I understand you are concerned about the Statement of Cash Flows and what it means.

The Statement of Cash Flows is one of four important financial statements for every business. It provides details about the sources and uses of cash during a fiscal period (month, quarter, or year). There are three sections to the Statement of Cash Flows: Operating Activities, Investing Activities, and Financing Activities. The Operating Activities section provides details about cash receipts and payments for day-to-day operations. The Investing Activities section provides details about cash receipts and payments for long-term assets and the Financing Activities section provides details about cash receipts and payments for debt (long-term borrowing) and equity (stock) transactions. The total on this statement is equal to the cash account balance on the Balance Sheet for the same period.

I hope this explanation helps you better understand the Statement of Cash Flows. Please feel free to contact me if you have additional questions.

Sincerely,

Kelsey Sioen

Reconciliation from IFRS to GAAP

You are the CFO for Mills company (reporting using IFRS) and must reconcile your financial statements for the years ending 2008, 2009, and 2010 to U.S. GAAP (The Income Statement and Statement Stockholders’ Equity). Youhave identified the following 5 areas where there are differences between IFRS and U.S. GAAP at various dates.  Be sure to consider the cumulative effects of prior year transactions for each year.

Intangible Assets

As part of a business combination in January 2004, the company acquired a brand for $15,000,000.  The brand is classified as an intangible asset with a 15 year useful life.  At year-end 2008, the brand is determined to have a selling price of $8,000,000 with zero cost to sell.  Expected future cash flows from continued use of the brand are $13,000,000 (undiscounted) and the present value of future cash flows is 9,000,000

Research and Development Costs

The company incurred research and development costs of $2,000,000 in 2008.  Of this amount, 70% related to development activities subsequent to the point at which criteria had been met that an intangible asset existed.  The development costs were completed at the end of 2008 and will be amortized over 10 years beginning 2009.

Property Plant and Equipment

On January 1, 2009 a building that had an original cost of $20,000,000 and (Purchase date January 1 2001) and was being depreciated over 20 years was determined to have a fair value of $15,000,000.   The company uses the revaluation model for such assets.

Sale Leaseback

On January 1, 2006 the company realized a gain on a sales leaseback of $6,000,000.  The term of the lease (starting the date of the sale) is 15 years.

Dove’s Global ‘Real Beauty’ Campaign
The Dove Campaign for Real Beauty is a worldwide marketing campaign launched

by Unilever in 2004 that includes advertisements, video, workshops, sleepover events and the publication of a book and the production of a play. The aim of the campaign is to celebrate the natural physical variation embodied by all women and inspire them to have the confidence to be comfortable with themselves. Dove's partners in the effort include such marketing and communications agencies as Ogilvy & Mather, Edelman Public Relations, and Harbinger Communications (in Canada) along with other specialized consultants. Part of the overall project was the "Evolution" campaign. Please read the full description from WIKIPEDIA

This case explores how Unilever’s reconfigured its marketing mix for its Dove brand. Historically, Unilever had customized its products and marketing campaigns for each market, a strategy that not only resulted in duplication of effort, but also in organizational complexity. In 2003, Unilever shifted its strategy to develop a more globally standardized approach for Dove. The company now uses a basic message for the brand, and allows some customization at the local level. Discussion of the feature can begin with the following questions:

Discussion Questions

1. How would you describe Unilever’s approach to international markets prior to 2003? What were the advantages of this strategy? What were the drawbacks of this approach?

2. In 2003, Unilever adopted its Real Beauty strategy. Explain how this new strategy differed from its traditional approach to foreign markets? How should this new approach help Unilever’s international sales?