Assume sales for Peach Street Industries are expected to increase by 8.00% from 2015 to 2016. Peach Street is operating at full capacity currently and expected assets-to-sales and spontaneous liabilities-to-sales to remain the same. Additionally, the firm is looking to maintain their 2015 net profit margin and dividend payout ratios for 2016. The firm’s tax rate is 37.00% and selected income statement and balance sheet information for 2015 is provided below:

The firm is projecting sales growth of 10% from 2015 to 2016. If the firm did not have access to or did not want to use external capital sources to grow sales, what is the maximum rate of sales growth (self-sustaining growth rate) could the firm could achieve under these conditions?

On December 31, 2016, Monty Corp. provided you with the following pre-adjustment information regarding its portfolio of investments held for short-term profit-taking.

December 31, 2016

Investments Carrying Amount Fair Value

Moonstar Corp. shares $20,000 $18,600

Bilby Corp. shares $10,000 $8,800

Radius Ltd. Shares $19,600 $20,200

Total portfolio: $49,600 $47,600

During 2017, the Bilby Corp. shares were sold for $9,500 and Springs Ltd. shares were purchased for $9,000 plus 1% commission. The fair values on December 31,2017 were as follows: Moonstar Corp. shares $19,700, Radius Ltd. shares $21,000 and Springs Ltd. shares $8,600. Dividends and other investment income and losses are all reported in one investment income account.

Required:

a) Prepare the adjusting journal entry needed at December 31, 2016

b) Prepare the journal entries to record the sale of the Bilby Corp. shares and purchase of Springs Ltd. shares during 2017.

c) Prepare the adjusting journal entries needed on December 31, 2017

6. Income statements and balance sheets follow for The New York Times Company. Refer to these financial statements to answer the requirements. THE NEW YORK TIMES COMPANY Consolidated Statements of Income Fiscal year ended (in thousands) Dec. 29, 2016 Dec. 30, 2015 Revenues Circulation $ 880,543 $ 851,790 Advertising 580,732 638,709 Other 94,067 88,716 Total revenues 1,555,342 1,579,215 Production costs Wages and benefits 363,051 354,516 Raw materials 72,325 77,176 Other 192,728 186,120 Total production costs 628,104 617,812 Selling, general and administrative costs 721,083 713,837 Depreciation and amortization 61,723 61,597 Total operating costs 1,410,910 1,393,246 Restructuring charge 14,804 0 Multiemployer pension plan withdrawal expense 6,730 9,055 Pension settlement charges 21,294 40,329 Early termination charge 0 0 Operating profit 101,604 136,585 Loss from joint ventures (36,273) (783) Interest expense, net 34,805 39,050 Income from continuing operations before income taxes 30,526 96,752 Income tax expense/(benefit) 4,421 33,910 Income from continuing operations 26,105 62,842 Loss from discontinued operations, net of income taxes (2,273) 0 Net income 23,832 62,842 Net loss attributable to the noncontrolling interest 5,236 404 Net income attributable to The New York Times Company common stockholders $29,068 $63,246 Continued next page   Cash and cash equivalents $ 100,692 $ 105,776 Short-term investments 449,535 507,639 Accounts receivable, net 197,355 207,180 Prepaid assets 15,948 19,430 Other current assets 32,648 22,507 Total current assets 796,178 862,532 Long-term marketable securities 187,299 291,136 Investments in joint ventures 15,614 22,815 Property plant and equipment, net 596,743 632,439 Goodwill 134,517 109,085 Deferred income taxes 301,342 309,142 Miscellaneous assets 153,702 190,541 Total assets $2,185,395 $2,417,690 Accounts payable $ 104,463 $ 96,082 Accrued payroll and other related liabilities 96,463 98,256 Unexpired subscriptions 66,686 60,184 Current portion of long-term debt 0 188,377 Accrued expenses and other 131,125 120,686 Total current liabilities 398,737 563,585 Long-term debt and capital lease obligations 246,978 242,851 Pension benefits obligation 558,790 627,697 Postretirement benefits obligation 57,999 62,879 Other 78,647 92,223 Total other liabilities 942,414 1,025,650 Stockholders’ equity Common stock of $0.10 par value Class A common stock 16,921 16,826 Class B convertible stock 82 82 Additional paid-in capital 149,928 146,348 Retained earnings 1,331,911 1,328,744 Common stock held in treasury, at cost (171,211) (156,155) Accumulated other comprehensive loss, net of tax (479,816) (509,094) Total New York Times Company stockholders’ equity 847,815 826,751 Noncontrolling interest (3,571) 1,704 Total stockholders’ equity 844,244 828,455 Total liabilities and stockholders’ equity $2,185,395 $2,417,690 Required: a. Compute net operating profit after tax (NOPAT) for 2016 and 2015. Assume that combined federal and state statutory tax rates are 37% for both years. 2015 NOPAT= 101604 x (1-37%) NOPAT= 64 010$ 2016 NOPAT= 136585 x (1-37%) NOPAT= 86 049$ b. Compute net operating assets (NOA) for 2016 and 2015. Net Operating assets= Operating assets – Operating liabilities Operating assets= Total assets – (Cash+investments+marketable securities) Operating liabilities= Total liabilities – (Long term debt – Current portion of LTD) 2015 Operating assets= 2 417 690 – (105776+507639+291136) Operating assets= 1 513 139 Operating liabilities= 1 589 235 – (188377+242851) Operating liabilities= 1 158 007 Net Operating assets= 1 513 139 – 1 158 007 Net operating assets for 2015 is $355 132 2016 Operating assets= 2 185 395 – (100 692+ 449 535+ 187299) Operating assets= 1 447 869 Operating liabilities= 1 341 151 – (246978+0) Operating liabilities= 1 094 173 Net Operating assets= 1 447 869 – 1 094 173 Net operating assets for 2016 is $353 696 c. Compute return on net operating assets (RNOA) for 2016 and 2015. Net operating assets are $397,299 thousand in 2014. 2015 Average of NOA= (355 132 + 397 299) / 2 Average of NOA= 376 215 RNOA= 64010/376215 RNOA for 2015= 17.01% 2016 Average of NOA= (355 132 + 353 696) / 2 Average of NOA= 354 414 RNOA= 86049/354 414 RNOA for 2016= 24.27% d. Compute return on common shareholders equity (ROE) for 2016 and 2015. Stockholders’ equity attributable to New York Times Company in 2014 is $726,328 thousand. ROE= Net income / average shareholders’ equity 2015 Average shareholders’ equity= (828455+726328) / 2 Average shareholders’ equity= 777 391 ROE= 63 246 / 777 391 ROE= 8.14% 2016 Average shareholders’ equity= (828455+844244) / 2 Average shareholders’ equity= 836 349 ROE= 29 068 / 836 349 ROE= 3.48% e. What is nonoperating return component of ROE for 2016 and 2015? ROE= Operating return – Non-operating return Non-Operating return= ROE – Operating return. 2015 2016 Non-operating return= 8.14 – 17.01 Non-operating return= 3.48%-24.27% Non-operating return= -8.87% Non-operating return= -20.79% f. Comment on the difference between ROE and RNOA. What inference do you draw from this comparison? The RNOA for 2015 and 2016 is much higher than the ROE ratios. However, we still have a decrease in both ratios (ROE and RNOA) for 2016 comparing to 2015 since there’s a significant decrease in the net income by 34K comparing to 2015. I still believe that New York Times Company have a good management, and very efficient and profitable on every dollar invested. New York times has a positive financial leverage.

1. Which of the following maps define an isomorphism of binary structures? Explain. (a) The function (R, +) → (R, +) given by x → x 2 (b) The function (R>0, ·) → (R>0, ·) given by x → x 2 (c) The function (R>0, +) → (R>0, +) given by x → 2x 2. For each of the following, prove or disprove that it is a group. If it is a group, prove or disprove that it is abelian. (a) (Q +, ·) (b) (R \ {0}, ∗), where a ∗ b = ab 2 3. Assume that φ : (S, ∗) → (S 0 , ∗ 0 ) is an isomorphism of binary structures, and that ∗ is associative. Prove that ∗ 0 is associative. 4. Consider the set H = a −b b a ∈ M2(R) : a 6= 0 or b 6= 0 , with matrix multiplication as the operation. (a) Show that the operation is closed. (b) Define the function φ : H → C ∗ (where C ∗ is the group C \ {0} with multiplication as the operation) by φ : a −b b a 7→ a + bi. Show that φ is an isomorphism of binary structures. (c) Explain briefly why we can now conclude that H is a group. 5. Consider the set V = a 0 0 b ∈ M2(R) : a, b ∈ {1, −1} , with the operation · (matrix multiplication). Note that (V, ·) is a group (you do not need to prove this). Prove that (V, ·) is not isomorphic to U4.

Q 12

LCC has total budgeted production overheads for next year of GHS816,000 and has traditionally absorbed overheads on machine hour basis. It makes two products Product V and Product W

Product V Product W

Direct materials cost per unit GHS20 GHS60

Direct labour cost per unit GHS50 GHS40

Machine time per unit 3 hours 4 hours

Annual production 6000 units 4,000 units

Required:

a) Calculate the product cost for each of the two products on the assumption the firm continues to absorb overhead costs on a machine hour basis

b) The company is considering changing to an activity based costing (ABC) system and has identified the following information:

Product V Product W

Number of setups 18 32

Number of purchase orders 48 112

Overhead cost analysis GHS

Machine related overhead costs 240,000

Setup related overhead costs 280,000

Purchasing related overhead costs 332,000

Total production overheads 816,000

Calculate the unit cost for each of the two products on the assumption that the firm changes to an ABC system, using whatever assumption you consider appropriate.

c) Suggest how ABC analysis could be useful for measuring performance and improving profibability

Tests were carried out on a three-phase 220 V, 50 Hz, 4-pole delta-connected induction motor. The following results were obtained from open circuit (no-load) and short circuit tests.

            Open Circuit (no-load) Test

            Short Circuit (locked rotor) Test

            A dc resistance test indicates that the stator resistance per phase is 1.165 W.

a)        Estimate the machine’s friction and windage loss and determine the parameters of the full equivalent circuit of the machine.

Using an appropriate form of the machine equivalent circuit:

b)         Calculate the losses in the machine and draw a power flow diagram which illustrates the flow of power through the machine when it runs on-load with a slip of 0.06

c)         Determine the starting torque, and also the torque when running with a slip of 0.06.

3a. If the molar absorptivity constant for the red dye solution is 5.56×104 M-1 cm-1 , calculate the molarity of the red dye solution with absorption = 0.900. You may assume L = 1.22cm. Hint: A=εLC

b. Convert the molarity in part a to w/v%. Show your work. Molar mass of FD&C red #3 = 879.86g/mol w/v% is defined as weight (in grams) of solute/100 mL of solution You should remember that w/v% always refers to the grams of materials in 100mL of solution. ppm is defined as mg of solute/ L of solution (1mg = 10-3 g) ppb is defined as µg of solute / L of solution (1µg = 10-6 g)

c. If you want to dilute the red dye solution in part a by 5 times in a single dilution step, explain in two sentences on how one should proceed with the dilution. In addition, what is the final concentration of the diluted solution? Show your work for the numerical part of this question. You are only allowed to use a 5-mL volumetric pipet, a 10-mL volumetric pipet, a 50-mL volumetric flask and/or a 100-mL volumetric flask during the dilution. You may NOT reuse the same pipet during the dilution.

Consider the following three projects:

The cost of capital of the firm is 10%.

Based on the IRR decision rule:

1. Should you invest in Project A?

Below are multiple choice for the IRR calculation

i) 16.55%

ii) 17.61%

iii) 18.31%

iv) 20.22%

v) Cannot calculate

Answer: I should/should not (choose one) invest in Project A.

2. Should you invest in Project B?

Below are multiple choice for the IRR calculation

i) 16.55%

ii) 17.61%

iii) 18.31%

iv) 20.22%

v) Cannot calculate

Answer: I should/should not (choose one) invest in Project B.

3. Should you invest in Project C?

Below are multiple choice for the IRR calculation

i) 16.55%

ii) 17.61%

iii) 18.31%

iv) 20.22%

v) Cannot calculate

Answer: I should/should not (circle one) invest in Project C.

4. Assume that we can only take one of the projects. Which one would we choose?

Answer: You would choose project ____________

An amateur astronomer is researching statistical properties of known stars using a variety of databases. They collect the color index, or B−V index, and distance (in light years) from Earth for 30 stars. The color index of a star is the difference in the light absorption measured from the star using two different light filters (a B and a V filter). This then allows the scientist to know the star's temperature and a negative value means a hot blue star. A light year is the distance light can travel in 1 year, which is approximately 5.9 trillion miles. The data is provided below. Use Excel to calculate the correlation coefficient r between the two data sets, rounding to two decimal places.

B-V index   Distance (ly)
1.1   1380
0.4   556
1.0   771
0.5   304
1.4   532
1.0   751
0.5   267
0.8   229
0.5   552
0.2   896
1.5   1819
0.5   381
0.5   257
1.1   541
0.7   133
0.5   300
0.0   985
0.4   525
1.0   408
1.1   1367
1.07   2848
1.1   128.9
1.12   1766.2
0.64   186.5
0.87   8269.2
0.19   828.9
1.03   153
0.55   223.6
1.39   963.9
0.89   91.7

An amateur astronomer is researching statistical properties of known stars using a variety of databases. They collect the color index, or B−V index, and distance (in light years) from Earth for 30 stars. The color index of a star is the difference in the light absorption measured from the star using two different light filters (a B and a V filter). This then allows the scientist to know the star's temperature and a negative value means a hot blue star. A light year is the distance light can travel in 1 year, which is approximately 5.9 trillion miles. The data is provided below. Use Excel to calculate the correlation coefficient r between the two data sets, rounding to two decimal places.

B-V index   Distance (ly)
1.1   1380
0.4   556
1.0   771
0.5   304
1.4   532
1.0   751
0.5   267
0.8   229
0.5   552
0.2   896
1.5   1819
0.5   381
0.5   257
1.1   541
0.7   133
0.5   300
0.0   985
0.4   525
1.0   408
1.1   1367
1.07   2848
1.1   128.9
1.12   1766.2
0.64   186.5
0.87   8269.2
0.19   828.9
1.03   153
0.55   223.6
1.39   963.9
0.89   91.7

R=