QUESTION 1

The veil of ignorance makes us ignorant about the primary goods, that is, about those things everyone needs to live a decent life.

True

False

10 points   

QUESTION 2

Liberals disagree with libertarians about liberty. Liberals believe that liberty is not the most important thing.

True

False

10 points   

QUESTION 3

The difference principle explains what differences between people in society, in terms of wealth and income, are permissible.

True

False

10 points   

QUESTION 4

For liberals, that opportunities should be equal means primarily that there should be no laws that limit certain people's opportunities based on their so-called race, their enthnicity, their sex, and so on.

True

False

10 points   

QUESTION 5

Liberals hold that, in our society, the value of the political liberties -- how valuable they are to a given person -- often depends on how much wealth one has.

True

False

10 points   

QUESTION 6

Liberals believe that the "American Dream" is still available for most individuals, that is, that most individuals will be able to move up the economic ladder and earn more money, and be wealthier, than their parents.

True

False

10 points   

QUESTION 7

Liberals say that the distribution of income and wealth in the U.S. does not satisfy the difference principle.

True

False

10 points   

QUESTION 8

Liberals believe that wealthiest 1% of Americans should not be taxed more heavily than the bottom 99% because the wealthiest Americans have worked hard for their wealth.

True

False

10 points   

QUESTION 9

Liberals are unequivocal advocates of a welfare state.

True

False

CAPITAL STRUCTURE AND DIVIDEND PAYOUTS The board of directors of Baldwin Inc. met today to discuss the capital structure and dividend policy of the company. The board discussed the optimal capital structure of 60 percent debt and 40 percent equity and the likely effect of the capital structure on the company’s weighted average cost of capital (WACC) and the firm value. During the meeting it came up that debt provides tax benefits to the firm because interest is tax deductible whereas dividend is not. Therefore, the debt ratio of 60 percent was considered acceptable. However, Gregg, the CFO of the company, stressed that debt can put pressure on the firm because interests and principal payments are fixed obligations that the company must pay, no matter the profit of the company. He stated that if these obligations are not met, the company may risk some sort of financial distress and files for bankruptcy. Gregg continued to explain that if the company files for bankruptcy there are direct and indirect costs that Baldwin must incur. Mr. Milosvoski, a board member suggested that there are ways to reduce the cost of debt by hiring an expert to handle the company’s debt agreements between the shareholders and bondholders. He stated that protective covenants are incorporated as part of the loan agreement and must be taken seriously because a broken covenant can lead to default. He mentioned negative covenant and a positive covenant as types of protective covenants the company should take seriously. John Miller, another board member stated that one reason bankruptcy costs are so high is that different creditors and their lawyers contend with each other. He suggested that if debt can be consolidated, or if bondholders can be allowed to purchase stock of the company bankruptcy cost will be reduced. In this way, stockholders and debtholders are not pitted against each other because they are not separate entities. He cited examples in Japan where large banks generally take significant stock positions in the firms to which they lend money. The employee representative on the board, Ms. Johnson used the free cash flow hypothesis to state that firms with high free cash flow are very likely to undertake more wasteful activity which has a serious implication for capital structure. Since dividends leave the firm, they reduce free cash flow. Thus, according to her, an increase in dividends should benefit the stockholders by reducing the ability of corporate managers to pursue wasteful activities. She continued that since interest and principal also leave the firm, debt can reduce free cash flow and wasteful spending. But because corporate managers are not legally obligated to pay dividends, she suggested that debt of the company be increased. Philip Suzuki, director of Public Relations and a board member was of the view that determining optimal debt-equity ratio is not an easy task and varies across industries so Baldwin should follow the rules of the pecking-order theory when financing capital projects. No agreement was reached on the company’s capital structure, but the CEO and Gregg believed that the 60-40 debt-equity capital structure will minimize the cost of capital and improve the firm value. The board is retaining you as the financial consultant to assist with the company’s capital structure and dividend payout decisions. The Chairman of the board wants you to address the following questions:

1. Baldwin Inc. wants you to help them prepare a dividend policy which will guide the first dividend payout of the company in 2025. List five characteristics of a sensible dividend policy you want the board to know.

Variable Costing, Absorption Costing

During its first year of operations, Snobegon, Inc. (located in Lake Snobegon, Minnesota), produced 40,100 plastic snow scoops. Snow scoops are oversized shovel-type scoops that are used to push snow away. Unit sales were 38,300 scoops. Fixed overhead was applied at $0.70 per unit produced. Fixed overhead was underapplied by $2,800. This fixed overhead variance was closed to Cost of Goods Sold. There was no variable overhead variance. The results of the year’s operations are as follows (on an absorption-costing basis):

Required:

1. Calculate the cost of the firm’s ending inventory under absorption costing. Round unit cost to five decimal places. Round your final answer to the nearest dollar.
$

What is the cost of the ending inventory under variable costing? Round unit cost to five decimal places. Round your final answer to the nearest dollar.
$

Feedback

Take unit cost under absorption less fixed overhead amount per unit to get variable cost per unit for variable costing.

2. Prepare a variable-costing income statement. Round the unit cost to five decimal places, when required. Round your final answers to the nearest dollar. Use the rounded values in subsequent computations.

Feedback

Use a contribution margin format income statement that groups costs according to behavior (variable and fixed)

What is the difference between the two income figures?
$

Operating Budget, Comprehensive Analysis

Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below.

The following data pertain to production policies and manufacturing specifications followed by Ponderosa:

Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month’s sales.

The data on materials used are as follows:

Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month’s production needs. This is exactly the amount of material on hand on January 1.

The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20.

Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.)

Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.)

The unit selling price of the wiring harness assembly is $110.

In February, the company plans to purchase land for future expansion. The land costs $68,000.

All sales and purchases are for cash. The cash balance on January 1 equals $62,900. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum.

Required:

Prepare a monthly operating budget for the first quarter with the following schedules:

1. Sales budget

Feedback

See Cornerstone 8.1.

2. Production budget

Feedback

See Cornerstone 8.2.

3. Direct materials purchases budget

Feedback

See Cornerstone 8.3.

4. Direct labor budget. Round your answers to two decimal places, if required.

Feedback

See Cornerstone 8.4.

5. Overhead budget. Round your answers to two decimal places, if required.

Feedback

See Cornerstone 8.5.

6. Selling and administrative expense budget. Round your answers to the nearest cent, if required.

Feedback

See Cornerstone 8.9.

7. Ending finished goods inventory budget. Round intermediate calculations to the nearest cent. Round your answers to the nearest cent, if required.

Feedback

See Cornerstone 8.6.

8. Cost of goods sold budget

Feedback

See Cornerstone 8.7.

9. Budgeted income statement (ignore income taxes)

Feedback

See Cornerstone 8.10.

10. Cash budget
Enter a negative balance as a negative amount, and if an amount is zero enter "0".

Feedback

See Cornerstone 8.12.

Feedback

Partially correct

When O2 is added to an anaerobic suspension of cells consuming glucose at a high rate, the rate of glucose consumption drops significantly as the O2 is consumed; the accumulation of lactate also ceases. First observed by Louis Pasteur in the 1860s, this effect is characteristic of most cells capable of aerobic and anaerobic metabolism.

a) Why does lactate cease to accumulate upon addition of O2?

b) Why does the rate of glucose consumption decrease?

c) What is the mechanistic basis for slowed glucose consumption? (i.e. Which enzymes are being affected and how?

1. Design a sequence detector, a Mealy finite state machine to detect the serial bit sequence 1101, where the most significant bit (MSB) comes first and the least significant bit comes last.

A) Draw the state diagram

B) Draw the state table

C) The circuit is to be implemented using JK flip-flops and combinational logic circuit. Derive the Boolean expression necessary for this implementation.

D) Sketch the circuit diagram for your design. This should show all the flipflops, logic gates and interconnections.

1. Write about your experiences with race. What does  race mean?  What does it mean to say race is a social construction? How do you make sense of the existence of race, if it is not biological? You might ask how they first became aware of the concept of race. Have you lived and worked in a diverse community? School? Workplace? How has your "race" affected your life or the life of your family members? Describe your most positive and negative experiences related to race.

6. Histograms:
a) How is the histogram related to the frequency plot?
i. When does a histogram look exactly like a frequency plot?
b) What visual information do you get from a histogram?
c) How can you tell what interval contains the most data points?
d) What is the relation between histograms and the cumulative distribution function?

e) ​The probability of winning at American roulette is 1/38 .
What is your expected number of wheel spins to get your first winner? ​

Fifty randomly selected students were asked the number of speeding tickets they have had. The results are as follows:

Round your answers to two decimal places.

The mean is:

The median is:                            

The sample standard deviation is:   

The first quartile is:

The third quartile is:                              

What percent of the respondents have had at most 2 speeding tickets?

6% of all respondents have had at least how many speeding tickets?                           

Based health promotion models, theories, and practice, make two venn diagrams. One should have three circles, one for each of 3 theories/models you have selected and are most interested in. The second one should also have three circles for three different strategies for health education. Compare and contrast the theories/models in the first and compare and contrast the three strategies in the second. You may use a digital tool for this or done them long hand on paper and take a picture to submit.