On may 13,1988 a Friday incidentally, will be remembered by a major Chicago bank. Embezzlers nearly escaped with $69 million! Arnand Moore, who was released after serving four years of his 11 year sentencd for a $180,000 fraud decided it was time to put his fingers in something a little bigger and better. He instigated a $68.7 million fraud plan. Naming himself as "Chairman," he assembled Herschel Bailey, Otis Wilson,Neal Jackson,Leonard Strickland, and Ronald Carson to complete the formation of his "Board". Most importantly, the "Board" was able to convince an employee of the Chicago bank to provide their "in". The caper required one month of planning in a smaill hotel in Chicagoand took all 64 minutes to complete.

The employee had worked for the Chicago bank for eight years and he was employed in the bank's wire transger section,which dispatches multimillin-dollar sums around the world via computers and phone lines. Some of the bank's largest customers send funds from their accounts directly to creditors and suppliers. For electronic transfers,most banks require that a bank employee call back another executive at the customer's offices to reconfirm the order, using various code numbers. All such calls are automatically taped. The crokked employee participated in these deposits and confirmations, and he had access to all the code numbers and names of appropriate executives with whom to communicate.

The "Board's" targets were Merrill Lynch, United Airlines, and Brown_Forman Distellers. A few members of the gang set up phony bank accoutns in Vienna under the false names of "Lord Investments," "Walter Newman," and "GTL Industries." at 8:30 a.m. a gang member posing as a Merrill Lynch executive called the bank to arrange a transfer of $24 million to the account of "Lord Of Investments,", and was assisted by one of the crooked employees unsuspecting co-workers. In accordance with the bank's practice of confirming the transfers with a second executive of the company, the employee stepped in and called anothe supposed "Merrill Lynch" executive who was actually Bailey, his partner in crime. bailey's unfaltering, convincing voice was recorded automatically on the tape machine, and the crooked employee wired the funds to Vienna via the New York City bank. The same procedure followed at 9:02 amd 9:34 a.m. with phony calls on behalf of United Airlines and Brown-Forman. The funds were initally sent to Citibank and Chase Manhattan Bank, respectively.

On Monday, May 16, the plot was uncovered. the "Chairman and his "Board" were discovered by neither effort on the part of the Chicago bank nor any investigative authority. Although bank leaders do not like to admit just how close the culprits came to "getting away with it," investigators were amazed at how far the scheme proceeded before being exposed. Had the men been a little less greedy, say possibly $40 million, or if they had chosen accounts that were a little less active, they may have been touring the world to this day! The plot was discovered because the transfers overdrew the balances in two of the accounts, and when the companies were contacted to explain the NSF transactions, they knew nothing about the transfers.

1. How could this fraud have been prevented? Why is this a difficult fraud to prevent?

Quality Control and the Boeing 787

​Source: McCartney, Scott.​ "How to Inspect Every Piece of a Widebody​ Airplane." http://www.cetusnews.com/life/How-to-Inspect-Every-Piece-of-a-Widebody-Airplane.B1xPm2I4t-.html, posted

​8/30/2017.

Imagine​ you're buying a​ $270 million car.​ You'd want to kick the tires pretty hard.​ That's what airlines do with new airplanes. Delivering one widebody airplane is a big

deallong dash—each

plane has a list price roughly the cost of a​ high-rise hotel.

Carriers like American Airlines station their own engineers at Boeing factories to watch their flying machines get built and check parts as they arrive. Then they send flight​ attendants, mechanics and pilots for what are called shakedown inspections.

​"The rubber meets the road​ here," says an American​ manager, as he begins checking a brand new Boeing 787.​ "It's inspected and​ it's inspected and​ it's inspected. And yet we still find​ things." American is taking delivery of 57 new planes this year. Boeing does its own​ testing, but buyers do their own extra

inspectionlong dash—and

note an average of 140 items on a​ plane's punchlist.

Five flight​ attendants, a couple of mechanical experts and an American test pilot attack the​ 285-passenger plane. All the doors and panels are opened for inspection. Flight attendants shake each seat​ violently, grab the headrest and pull it up and jerk the cord on each entertainment controller. They test power​ ports, USB​ ports, audio jacks and the entertainment system. They open all tray​ tables, turn all lights on and off. They recline each seat with​ knee-knocking force. They flush all the​ toilets, blow fake smoke into smoke​ alarms, make sure all prerecorded emergency messages sound when required.

Inside the​ cockpit, an American test pilot flies the jet to its​ limits, making sure alarms sound when he increases air speed or slows the plane down to stall speed. He turns it sharply until​ "bank angle" warnings sound. Each engine gets shut down and restarted in the air. Every backup and emergency system is put into use to make sure it works.

Critical Thinking Questions

1. Why do airlines feel the need to make quality​ inspections?

A. The​ $270 million price tag.

B. Pilots like to check emergency systems.

C. Manufacturers sometimes miss errors.

D. All of the above.

2. Who participates in shakedown​ inspections?

A. Flight attendants only.

B. Boeing engineers.

C. Top management from the airline buying the plane.

D. Test pilots and other company representatives.

3. Flight attendants test the 787s

A. exterior paint.

B. ​seats, entertainment​ systems, and power parts.

C. air speed.

D. legroom.

4. Inspection on a commercial jet takes place

A. before delivery to the customer.

B. during the first scheduled flight.

C. before the contract is signed.

D. at the part​ supplier's shipping dock.

Prem Narayan, a graduate student in engineering, to market a radical new speaker he had designed for automobile sound systems, founded Acoustic Concepts, Inc. Prem established the company’s headquarters into rented quarters in a nearby industrial park. He hired a receptionist, an accountant, a sales manager, and a small sales staff to sell the speakers to retail stores. Prem asked his accountant, Bob Luchinni, to prepare several cost-volume-profit analyses, using the information shown below.

Sales price for one speaker set................................................... $250 Variable manufacturing cost for each speaker set (direct
materials) ................................................................................... $150 Fixed expenses per month (rent, salaries of receptionist, sales

people, accountant, and Prem)................................................... $35,000 Number of speaker sets sold per month..................................... 400

Based on the above information, how many stereo speaker sets will need to be sold for Acoustic Concepts, Inc., to break even for one month?

Based on the above information, how many stereo speaker sets will need to be sold for Acoustic Concepts, Inc., to earn a $1,000 profit for one month?

What will be the net income or net loss for one month if 400 speaker sets are sold? How about if 425 speakers are sold?

The sales manager feels that a $10,000 increase in monthly advertising will increase monthly sales by $30,000. Would you recommend increasing the advertising budget?

Prem and other management personnel are considering the use of higher-quality components, which would increase variable costs by $10 per speaker. However, the sales manager predicts that the higher overall quality would increase sales to 480 speaker sets per month. Should the higher quality components be used?

The sales manager believes that by reducing the selling price of speakers by $20, and also by increasing the advertising budget by $15,000 per month, that sales will increase to 600 speaker sets per month. Should the changes be made?

The sales manager would like to place the sales staff on a commission basis of $15 per speaker sold, rather than on flat salaries that now total $6,000 per month. The sales manager is confident that the change will increase monthly sales to 460 speaker sets per month. Should the change be made?

Suppose Acoustic Concepts has an opportunity to make a bulk sale of 150 speakers to a wholesaler, if an acceptable price can be worked out. The sale would not disturb the company’s regular sales, nor would if affect fixed operating costs per month. What price should be quoted to the wholesaler if Acoustic Concepts wants to increase its monthly profits by $3,000?

 C.M.=contribution margin, S.P.=sales price, V.C.=variable cost, F.C.=fixed cost

 C.M. per unit = S.P. per unit – V.C. per unit

 The break even point is the point at which the total contribution margin equals fixed costs.

 Break even units sold = F.C. / C.M. Per unit

 Break even sales dollars = F.C. / C.M. Percentage

 C.M. Percentage = C.M. per unit / S.P. per unit, or C.M. (total) / Sales (total)

Define the class HotelRoom. The class has the following private data members: the room number (an integer) and daily rate (a double). Include a default constructor as well as a constructor with two parameters to initialize the room number and the room’s daily rate. The class should have get/set functions for all its private data members [20pts]. The constructors and the get/set functions must throw an invalid_argument exception if either one of the parameter values are negative. The exception handler should display the message “Negative Parameter” [20pts]. Include a toString() function that nicely formats and returns a string that displays the information about the hotel room [10pts].

1. Write a main function to test the class HotelRoom, create a HotelRoom object. Try to set the room rate to an invalid value to generate an exception. Invoke the toSting() function to display the HotelRoom object. [20pts]
2. Derive the classes GuestRoom form the base class HotelRoom. The GuestRoom has private data fields and public functions:
   1. The private data field capacity (an Integer) that represents the maximum number of guests that can occupy the room. [5pts]
   2. The private data member status (an integer), which represents the number of guests in the room (0 if unoccupied). [5pts]
   3. An integer data field days that represents the number of days the guests occupies the room. [5pts]
   4. Add constructors and get/set functions to the GuestRoom class. The set function for the status data member must throw an out_of_range exception if it tries to set status to value greater than the capacity. [30pts]
   5. The function calculateBill() that returns the amount of guest’s bill. [10pts]
   6. Redefine the function toString() that formats and returns a string containing all pertinent information about the GuestRoom. [15pts]
3. Derive the classes MeetingRoom form the base class HotelRoom. The class has the following private data filed sand public functions:
   1. A private data field seats, which represents the number of seats in the room. [5pts]
   2. An integer data field status (1 if the room is booked and 0 otherwise). [5pts]
   3. Add constructors and get/set functions to the GuestRoom class. [10pts]
   4. Redefine the function toSting() to format and return a string containing all pertinent information about the MeetingRoom. [20pts]
   5. The function CalculateBill(), which returns the amount of the bill for renting the room for one day. The function calculates the bill as follows: the number of seats multiplied by 10.00, plus 500.00. [20pts]
4. Write a main function to test the classes GuestRoom and MeetingRoom. Invoke the calculateBills and toStirng() in each of the objects. [40pts]]
5. Make changes to the HotelRoom class to implement polymorphism. Add a virtual function calculateBill() that returns 0.00 and make the toString() function in the HotelRoom class a virtual function. Write the function displayHotelRoom() that receive a base class type reference as a parameter, then invokes the functions calculateBill() and toString(). The function must return void. [50pts]

6. From the main function invoke the function displayHotelRoom() three separate times and each time send a HotelRoom, a GuestRoom, and a MeetingRoom type objects. [20pts]

7. Repeat parts e and f but make appropriate changes in such a way that HotelRoom is turned into an abstract base class. [50pts]

1. On April 1, 2018, Sukyoon registered the book store with the local government and the IRS by investing $500. Sukyoon owns 10 shares of the company. Jay also invested $2,000 for 40 shares of the company. Jay agreed that Sukyoon would be running the business.
2. To house the business, the company bought an abandoned building near Snell Park for $150 on April 1. The purchase documents allocated $100 to the land and $50 to the building. The company paid for the building with $30 cash and a $120 (5 year/10%) mortgage from the Community Bank. The company expect the building have the useful life of 4 years with the expected salvage value of $
3. On May 1, the company purchased 40 bookshelves at an average cost of $6 per unit. ($240 total). Sukyoon felt the shelves would only last for two years, at which time they would have no remaining value for sale.
4. On June 15, the book store ordered hundreds of used books from AMAZON for $800 to be delivered on the same day. The book store was able to purchase the inventory “on account”, which meant he had up to 90 days after delivery to pay the supplier.
5. On July 1, the book store signed a contract with a local advertising agency to provide various forms of advertising for a period of one year. The company paid $100 upfront for advertising through June 30, 2019
6. On June 30, the book store also hired two employees, Eugene and Sarah, to run the store. They signed employment contracts promising each salaries of $5 per month
7. On July 1, the book store recorded its first sales of used books totaling $600, most of which were paid in cash immediately. The original cost of these used books was $200. However, Sukyoon allowed a select number of students to pay later. The amount of credit sales out of the total sales was $100.
8. On July 5, Jay called to check in on the business. Upon hearing that Clarkson “The Great” Book Store only had $__________ of cash left in the bank, Jay became concerned about his investment. Thinking fast, Sukyoon stated that he was so confident of Clarkson “The Great” Book Store’s prospects that he declared and paid a $0.10 per share dividend. This dividend seemed to reassure Jay.
9. On July 10, the book store paid Amazon $200 it was owed
10. On July 15, one students who purchased a book on credit on July 1 went bankrupt and the book store decided to write off sales of $2 to him.
11. On July 31, the book store’s two employees were paid wages of $10 total during this one-month period and Sukyoon drew a salary of $10.
12. On July 31, the book store’s made a payment of $8 in principal and interest payment of $4 to the Bank.
13. On July 31, the company booked the depreciation expenses relating to the fixed assets during the 4-month period and booked the expense relating to the service provided by a local advertising agency during July.
14. On July 31, the book store booked 10% of the pretax income as an income taxes expenses.

Create an income statement, balance sheet, and cash flow statement

Parramatta Scenic Cruises Pty Ltd (PSC) is a family-owned ferry business that operates on Sydney’s Parramatta River. Jane Jetson founded the company when she arrived in Australia and remains the Chief Executive Officer. Jane’s two children, Judy and Elroy, occupy key management roles in PSC. Judy Jetson is the Chief Financial Officer and Elroy Jetson is the tax accountant. PSC reported sales of $11 million for the 2017 financial year.

2) PSC is investigating a proposal to renew part of their fleet that involves replacing an existing ferry with a new, faster, 330-seat ferry costing $3 million. Judy is concerned that the net profit of the new ferry won’t generate a fast enough payback period. Therefore, she has discussed her concerns with Jane. Jane carefully explains to Judy the many reasons that profitability is not a good measure of financial success. Judy then prepares to conduct a rigorous cost-benefit analysis to ensure that the new ferry is financially viable.

3) Last month, Judy and Jane paid for a study by SeaWay Consulting P/L at a cost of $487,000 and the study concluded that the large and growing tourism market will generate sufficient demand for a new ferry. Today, PSC must decide if they will proceed with the investment in the new ferry and the associated sale of their existing ferry.

4) Elroy is really excited about the new ferry. It is a 34-metre, 119 tonnes displacement ferry capable of 35 knots with two cabins and four outside decks with a capacity for 330 passengers. According to the Australian Taxation Office (ATO) the new ferry has a sixteen-year life for taxation purposes.

5) NSW Maritime requires that all vessels have a Certificate of Operation that indicates that the vessel has been inspected and found to comply with the minimum standards set out in NSW maritime legislation. The compulsory certificate is required before PSC commences operations with the new ferry. Certification requires PSC to spend $200,000 on safety equipment. The certificate expires four years later at which time the ferry must be recertified and the safety equipment replaced at an estimated cost of $200,000. Recertification must occur every four years.

6) Because of limitations on the number of vessels at particular wharves on the Parramatta River the new ferry will replace an existing ferry. Even though the new ferry has an effective life of fifteen years, the Jetson family will operate the ferry for ten years only. Jane has arranged for the sale of the existing ferry for $300,000 today. If they don’t proceed with the new ferry PSC will continue to operate the existing ferry for ten years. The existing ferry was purchased six years ago for $2 million. Elroy states that the annual depreciation expense of $200,000 per annum is based on the ten-year tax life at the time of purchase. The existing ferry has a current book value of $800,000.

7) Elroy has suggested that because the new ferry is analysed over a ten-year time period they need to ensure that they recover all the costs they have incurred to date. Therefore, he recommends the $487,000 SeaWay Consulting fee be allocated equally over the ten-year analysis period.

8) PSC will borrow $2 million using a secured ten-year interest-only loan at an interest rate of 5% per annum to partly finance the new ferry. The loan requires annual interest payments of $100,000 starting in one year’s time. Today, inventory will need to increase by $110,000 to $610,000. Accounts receivable will increase to $750,000 from the current figure of $660,000.

9) At the moment PSC is leasing their Harris Park wharf facility to an unrelated entity for $85,000 p.a. The introduction of the new ferry will require that PSC use the wharf on a full-time basis. In this case, PSC must terminate the lease agreement. There is debate among the family members if this lease agreement is an example of a sunk cost or not.

10) At the moment, the existing ferry generates annual cash sales of $1,400,000. This sales figure is predicted to remain constant for each of the next ten years. The new ferry is predicted to generate cash sales in year one of $1.8 million in year 1 and this sales forecast is anticipated to increase by 4% per annum for the foreseeable future.

11) Judy has gathered some information regarding current and expected costs. At the moment, fixed costs are $400,000 per annum. Fixed costs would rise to $500,000 in year one with the new ferry. PSC is confident that they can reduce the increase in fixed costs by 2% p.a. after the first year. Wages expense is currently $900,000 each year and is predicted to increase to $1.4 million with the introduction of the new ferry. Judy reminds the family about the importance of incremental cash flow items when performing a financial analysis.

12) The current annual maintenance cost of the existing ferry is $63,000. The new ferry will require no maintenance in the first three years of its life because it is covered by a manufacturer’s three-year warranty. However, after the warranty expires in year 4 the annual maintenance expense will be $87,000. Jane has advised that PSC has an insurance policy that will insure any number of the company’s vessels at a fixed annual fee of $145,000.

13) It costs $175,000 a year to operate PSC’s head office and marina on the Parramatta River at Harris Park. With careful management PSC believes they will not require any additional personnel in headquarters if they purchase the new ferry. In any case, the annual head office operating expense will increase by just 2% each year.

14) The ATO classifies the safety equipment required for the Certificate of Operation as a business expense, and that expenses incurred in running PSC are tax deductible in the year the expense is incurred.

15) SeaWay Consulting’s report estimates that the new ferry will have a market value of $1 million in ten years’ time. The existing ferry has a book value of $800,000 today and can be sold for $300,000 today. PSC will use these sale proceeds to distribute a $300,000 dividend to its shareholders today. SeaWay Consulting advises that in ten years’ time the existing ferry would be worthless.

16) The company tax rate is 30% and the required rate of return is 12%.

Capital Budgeting Information

Present an itemised breakdown (and the total) for each of the following:

1. The cash flows at the start.

2. The cash flows over the life.

3. The cash flows at the end.

4. The NPV of the new ferry and an explanation of your recommendation.

Case Study: 10 Keys to Small Business Innovation

Creativity expert Teresa Amabile identifies three components of creativity: (1) Expertise. One must have the technical, procedural, and conceptual knowledge to generate potential solutions to a problem. (2) Creative thinking skills. A person must possess the willingness to take risks and to see problems or situations from different perspectives (3) Motivation. One must have an internal desire to develop creative solutions. This motivation often comes from the challenge that the work itself presents. Entrepreneurs and their employees can transform their companies into engines of innovation by combining these three components of creativity with what management consultant The Doblin Group calls the 10 types of innovation.

i. Business model. How does your company make money? These are innovations in the value proposition that a company provides its target customers and in the way it delivers value to its customers.

ii. Networks and alliances. Can you join forces with another company or entity for mutual benefit? A company may forge a synergistic relationship with another organization in which each company’s strengths complement the other.

iii. Organizational structure. How do you support and encourage your employees’ creative efforts? The most effective organizations use an appropriate structure and culture to align their talent to spark innovation.

iv. Core process. How does your company create and add value for customers? These innovations in a company’s internal processes result in superior business systems and work methods that result in benefits for customers.

v. Product or service performance. What are the most important features and functions of your company’s products or services? Innovations in functions and features can give a company’s product or service a significant edge over those of competitors.

vi. Product system. Can you link multiple products into a system or a platform? Bundling products can add value to customers.

vii. Service. How do you provide value-added service beyond your company’s products for customers? Some of the most successful businesses set themselves apart from their competition by providing unparalleled customer service.

viii. Channel. How do you get your products or services into customers’ hands? Some companies provide extra value to their customers by making their products and services available in many venues.

ix. Brand. What is your company’s “identity” in the marketplace? Successful companies use creative advertising, promotion, and marketing techniques to build a desirable brand identity with customers.

x. Customer experience. Does your company engage customers and give them reasons to come back to make future purchases? Innovative companies find ways to connect with their customers, creating a loyal base of “fansumers,” customers who not only purchase but act like fans who promote the company to their friends and family members.

Boatbound

Serial entrepreneur Aaron Hall took note of the “sharing economy” that emerged during the last recession and launched Boatbound, a peer-to-peer boat rental company that brings together boat owners who are willing to rent their boats when they are not in use and people who want a fun boating experience without the cost of owning a boat. Hall realized that 12.2 million boats are registered in the United States, yet the average owner uses his or her boat just 26 days per year. Boatbound screens all potential renters, verifies the condition and the safety of each boat, carries ample insurance on each boat, and covers general liability. Boat owners select their renters from Boatbound’s pool of applicants and set daily rental fees, and Boatbound collects 35 percent of the fee. Boatbound has rented every kind of boat, from kayaks to yachts with captains. Fees range from $200 to $8,500 per day. “As a boat owner and someone in the marine industry, I’ve been waiting for something like this my whole life,” says Aabad Melwani, owner of a marina. “I just didn’t know it.”

Henrybuilt

Scott Hudson, CEO of Henrybuilt, had created a profitable niche designing and building upscale kitchens that ranged from $30,000 to $100,000. In 2006, Hudson opened a New York City showroom, which doubled in size in just 18 months. By 2008, the company had more than 200 jobs in the United States, Mexico, and Canada. When the recession hit, however, new projects came to a standstill, and customers began cancelling orders. In response, Hudson launched a subsidiary, Viola Park Corporation, that provides customers lower-cost remodeling options that use its software rather than an architect to create “custom” variations on Henrybuilt designs. The result is a process that produces a kitchen much faster and at half the cost of a Henrybuilt kitchen. Henrybuilt sales have recovered, but Viola Park accounts for 20 percent of sales and is growing twice as fast as Henrybuilt. Unequal Technologies Robert Vito started Unequal Technologies in 2008 to supply protective clothing and gear, including bullet-proof vests, to military contractors. The protective gear is made from a lightweight yet strong composite material that he developed and patented. Two years later, the equipment manager of the Philadelphia Eagles called to ask whether Unequal Technologies could create a special garment for one of its star players who had suffered a sternum injury. Vito modified the bullet-proof vest for the player and soon had other players in the National Football League asking for protective gear. Unequal technologies went on to develop Concussion Reduction Technology (CRT), peel-and-stick pads for football helmets that are made from before it reaches the skull. Independent tests show that CRT reduces the risk of head injuries from impact by 53 percent. The company now supplies equipment to 27 of the NFL’s 32 teams and has its sights set on an even larger market: amateur sports. Vito says Unequal’s technology gives the company a competitive edge that has allowed it to increase sales from $1 million to $20 million in just one year.

(Source: Scarborough and Cornwall, 2016)

Required:

1. Drawing on the ten types of innovation and how Boatbound and Henrybuilt as small businesses applied the various types of innovation, develop an idea for a small business that will operate based on at least five (5) of the ten types of innovation illustrated in the case.

Stocks A and B have the following probability distributions of expected future returns:

1. Calculate the expected rate of return, , for Stock B ( = 7.30%.) Do not round intermediate calculations. Round your answer to two decimal places.
     %

2. Calculate the standard deviation of expected returns, σ_A, for Stock A (σ_B = 26.58%.) Do not round intermediate calculations. Round your answer to two decimal places.
     %

   Now calculate the coefficient of variation for Stock B. Round your answer to two decimal places.

   Is it possible that most investors might regard Stock B as being less risky than Stock A?

   1. If Stock B is less highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense.
   2. If Stock B is less highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be more risky in a portfolio sense.
   3. If Stock B is more highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be less risky in a portfolio sense.
   4. If Stock B is more highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense.
   5. If Stock B is more highly correlated with the market than A, then it might have the same beta as Stock A, and hence be just as risky in a portfolio sense.
   
   
   -Select-IIIIIIIVVItem 4

3. Assume the risk-free rate is 2.5%. What are the Sharpe ratios for Stocks A and B? Do not round intermediate calculations. Round your answers to two decimal places.

   Stock A:

   Stock B:

   Are these calculations consistent with the information obtained from the coefficient of variation calculations in Part b?

   1. In a stand-alone risk sense A is more risky than B. If Stock B is less highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be more risky in a portfolio sense.
   2. In a stand-alone risk sense A is less risky than B. If Stock B is more highly correlated with the market than A, then it might have the same beta as Stock A, and hence be just as risky in a portfolio sense.
   3. In a stand-alone risk sense A is less risky than B. If Stock B is less highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense.
   4. In a stand-alone risk sense A is less risky than B. If Stock B is less highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be more risky in a portfolio sense.
   5. In a stand-alone risk sense A is more risky than B. If Stock B is less highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense.

At the end of the day, the cash register's record shows $1,278, but the count of cash in the cash register is $1,259. The correct entry to record the cash sales is

Multiple Choice

• Debit Cash $1,259; Credit Sales $1,259.

• Debit Cash $1,259; debit Cash Over and Short $19; credit Sales $1,278.

• Debit Cash $1,278; credit Cash Over and Short $1,259; credit Sales $19.

• Debit Cash Over and Short $19, credit Sales $19.

• Debit Cash $1,278; credit Sales $1,278.

The following information is available for Fenton Manufacturing Company at June 30:

Based on this information, Fenton Manufacturing Company should report Cash and Cash Equivalents on June 30 of:

Multiple Choice

• $20,255

• $16,612

• $21,172

• $21,012

• $21,251

Jammer Company uses a weighted average perpetual inventory system and reports the following:

What is the per-unit value of ending inventory on August 31? (Round your per unit answers to 2 decimal places.)

Multiple Choice

• $22.64

• $19.28

• $21.36

• $21.50

• $18.50

Giorgio had cost of goods sold of $9,493 million, ending inventory of $2,161 million, and average inventory of $2,037 million. Its inventory turnover equals:

Multiple Choice

• 4.43.

• 0.23.

• 4.66.

• 83.1 days.

• 78.3 days.

Beckenworth had cost of goods sold of $11,421 million, ending inventory of $4,089 million, and average inventory of $2,165 million. Its days' sales in inventory equals: (Use 365 days a year.)

Multiple Choice

• 130.7 days.

• 0.3.

• 61.5.

• 61.2.

• 69.2 days.

Lucia Company reported cost of goods sold for Year 1 and Year 2 as follows:

Lucia Company made two errors: 1) ending inventory at the end of Year 1 was understated by $16,800 and 2) ending inventory at the end of Year 2 was overstated by $7,800. Given this information, the correct cost of goods sold figure for Year 2 would be:

Multiple Choice

• $303,600

• $286,800

• $258,000

• $295,800

• $271,200