You are CEO of Rivet Networks, maker of ultra-high performance network cards for gaming computers, and you are considering whether to launch a new product. The product, the Killer X3000, will cost $900,000 to develop up front (year 0), and you expect revenues the first year of $800,000, growing to $1.5 million the second year, and then declining by 40% per year for the next 3 years before the product is fully obsolete. In years 1 through 5, you will have fixed costs associated with the product of $100,000 per year, and variable costs equal to 50% of revenues.
A. What are the cash flows for the project in years 0 through 51
B. Plot the NPV profile for this nvestment using discount rates from 0% to 50% in 5% increments.
C. What is the project's NPV if the project's cost of capital is 10%?
D. Use the NPV profile to estimate the cost of capital at which the project would become unprofitable; that is, estimate the project's IRR or calculate it using the data.
Initial investment $900,000
Revenues vear 1 $800,000
Revenues vear 2 $1,500,000
Revenues decline years 4000
Fixed costs vears 1-5 $100,000
Variable costs 50%

Answer:

F= (900,000)

F1= 300,000

F2 = 650,000

F3 = 350,000

F4 = 170,000

F5 = 62,000

NPV at 10% $327487

IRR 20.587%

Explanation:

F0 -900,000

        revenues     variable cost   fixed cost   net flow

F1  800,000 -400000  -100,000 = 300,000

F2  1,500,000 -750000  -100,000 =  650,000

F3  900000 -450000  -100,000 =  350,000

F4  540000 -270000  -100,000 =    170,000

F5  324000 -162000  -100,000 =     62,000

NPV at 10%:

For each cashflow, we apply the discount of a lump sum formula

[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]

And add them together for the net present value

[tex]\left[\begin{array}{ccc}Year&$cashflow&PV\\0&-900,000&-900,000\\1&300,000&272,727\\2&650,000&537,190\\3&350,000&262,960\\4&170,000&116,112\\5&62,000&38,497\\Total&&327487\\\end{array}\right][/tex]

We solve for the IRR using the excel IRR formula

we list the cashflow and use IRR to select them.

Suppose the classical linear model assumptions hold, and the population model for log(wage) is given by:

Marc and Michelle are married and earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds. Marc and Michelle also paid $2,500 of qualifying moving expenses, and Marc paid alimony to a prior spouse in the amount of $1,500. Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $1,000 child tax credit for Matthew. Marc and Michelle paid $6,000 of expenditures that qualify as itemized deductions and they had a total of $5,500 in federal income taxes withheld from their paychecks during the course of the year.

a) What is Marc and Michelle’s gross income?

b) What is Marc and Michelle’s adjusted gross income?

c) What is the total amount of Marc and Michelle’s deductions from AGI?

d) What is Marc and Michelle’s taxable income?

e) What is Marc and Michelle’s taxes payable or refund due for the year? (Use the tax rate schedules.)

f) Complete the first two pages of Marc and Michelle’s Form 1040 (use 2015 forms if 2016 forms are unavailable).

According to the article, companies that have successfully used the discrimination and fairness paradigm to increase their demographic diversity.
a. are usually run by leaders who value due process and equal treatment of all employees
b. are usually run by leaders who have top-down directives
c. to enforce initiatives often have entrenched, easily observable cultures operate in a business environment where there is increased diversity among customers, clients, or the labor pool

Last week, an investigative reporter for a major metropolitan newspaper discovered that the doctors conducting clinical trials of a new cancer treatment drug are also the principal shareholders in Cancer Solutions Inc. (CSI). CSI is the company developing and attempting to market the drug. Upon being interviewed by federal authorities, the doctors acknowledged their conflict of interest but reported that they were sold the shares at a 75% discount by CSI's chief financial officer. The CFO was concerned that CSI might not be able to meet its annual performance objectives and in turn pay his anticipated multimillion-dollar bonus.
Does an agency conflict exist between CSI's CFO and the company's shareholders?
a. Yes; CSI's CFO engaged in unethical conduct to manipulate the firm's short-term earnings and improve the likelihood of receiving his annual bonus.
b. Yes; the shares should not have been sold at a 75% discount, which is price discrimination.
c. No; professionals, such as doctors and professional money managers, would not participate in unethical activities.
d. No; in general, shareholders are satisfied with company officers engaging in any type of legal or illegal activity to ensure the chances of them receiving greater dividend payments.
Which of the following actions will help ease agency conflicts and better align managers' objectives with the firm's shareholder wealth?
a. Pay the manager a combination of salary and stock options (phased in over several years) that reward him or her for consistently increasing shareholder wealth.
b. Pay the manager a large base salary with a huge stock option package that matures on a single date.
Amalgamated Metals Corporation's stockholders are mostly individual investors, and there is relatively little institutional ownership. If several pension and mutual funds were to take large positions in Amalgamated Metals Corporation's stock, direct shareholder intervention would be___________ likely to motivate the firm's management.

Financial Assertions and Audit Objectives. You are engaged to examine the financial statements of Spillane Company for the year ended December 31. Assume that on November 1, Spillane borrowed $500,000 from Second National Bank to finance plant expansion. The long-term note agreement provided for the annual payment of principal and interest over five years. The existing plant was pledged as security for the loan. Due to the unexpected difficulties in acquiring the building site, the plant expansion did not begin on time. To use the borrowed funds, management decided to invest in stocks and bonds and on November 16, invested the $500,000 in publicly traded securities
Required:
Develop specific assertions (audit objectives) related to securities (assets) based on management’s five (PCAOB) general assertions.

g A stock just paid a dividend of $2.59. The dividend is expected to grow at 20.07% for two years and then grow at 4.44% thereafter. The required return on the stock is 11.20%. What is the value of the stock?

Pooling has been used for a long time by businesses as a way to reduce risk. Imagine that years ago a small paint factory employed 200 people, each with an annual salary of $600/year. The factory owner knew from experience that 4 percent of workers were being injured each year, becoming unable to work. The factory owner decided to set up a fund to pay injured workers three months of salary to help their families and build good will with employees. The owner did not contribute to the injury fund. The workers themselves contributed a fixed amount each year to fund the plan. Answer the following questions (1 point each):_____.
1. How much did the owner need to collect from employees in total to fully fund the plan each year?
2. How much did each employee have to contribute each year to fully fund the plan?
3. What percentage of salary did each employee contribute to have an injury fund like this?

asper makes a $28,000, 90-day, 8.5% cash loan to Clayborn Co. The amount of interest that Jasper will collect on the loan is: (Use 360 days a year.)

This year, Linda Moore earned a $112,000 salary and $2,200 interest income from a jumbo Certificate of Deposit. She recognized a $15,300 capital loss on the sale of undeveloped land.

1. She also recognized a $10,500 capital gain from the sale of corporate stock.
2. She also received a $16,000 capital gain distribution from a mutual fund.
3. She had no other capital transactions this year but has a $17,000 capital loss carryforward from a previous year.

Required:
a. Compute Linda’s AGI and any capital loss carryforward into future years when she also recognized a $10,500 capital gain from the sale of corporate stock.
b. Compute Linda’s AGI and any capital loss carryforward into future years when she also received a $16,000 capital gain distribution from a mutual fund.
c. Compute Linda’s AGI and any capital loss carryforward into future years when she had no other capital transactions this year but has a $17,000 capital loss carryforward from a previous year.

What is the situation when a home currency purchases more goods and services at home than abroad when converted to a foreign currency

BENEFITS OF COPORATE GOVERNANCE

True or false, Is server a collection of computers and devices connected together wirelessly​

Three explorers are getting kidnapped by an evil tribe deep in the jungle, and their life now depends on their ability to correctly answer the following challenge the evil tribe's chief has for them. The explorers are tied to three trees facing each other and are presented with the chief's 5 wives: 3 brunettes, and 2 blondes. The three explorers are now blindfolded, and the chief picks three of his five wives to stand behind the trees the explorers are tied to, one behind each tree. The remaining two wives disappear from view. Then the blindfolds come off, and each explorer is able to see the two wives that are standing behind his two colleagues, but not the one behind himself. Each explorer now has up to 10 minutes time to think, after which each has to correctly answer what hair color the wife has that is standing behind him, or lose his life. When you, as one of the three explorers, gain your sight after the blindfold comes off, you see two brunettes standing behind your two colleagues. And now your life depends on figuring out who is behind you: a blonde or a brunette?

Amy and Mitchell share equally in the profits, losses, and capital of the accrual basis AM Products LLC. The LLC does not need to report financial information to any third parties, so capital accounts are determined using tax rules (rather than GAAP). Amy is a managing member of the LLC (treated as a general partner) and is a U.S. person. At the beginning of the current tax year, Amy's capital account has a balance of $960,000, and the LLC has debts of $624,000 payable to unrelated parties. The debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. Assume that all LLC debt is shared equally between the partners. The following information about AM's operations for the current year is obtained from the LLC's records.


Ordinary income $900,000
W-2 wages to employees 200,000
Depreciation expense 300,000
Interest income from bond 4,000
Long-term capital loss 6,000
Short-term capital gain 12,000
Charitable contribution 4,000
Cash distribution to Amy 20,000
Unadjusted basis of partnership depreciable property 1,600,000

Year-end LLC debt payable to unrelated parties is $140,000.

Required:
What income, gains, losses, and deductions does Amy report on her income tax return?

In an example, a local church is made up of people who are very different in their lifestyles and their stages of life. Mary is a 23-year-old single parent who earns the minimum wage. Jonathan is 60 years old, extremely wealthy, and works because he enjoys it. Jane is a 45-year-old lawyer who earns well and is well-respected in her profession. She is extremely career-oriented and is proud of her achievements. Which of the following do you think would motivate Jonathan the most?
a. safety
b. physiological
c. self-actualization
d. growth
e. esteem

Mark or Make is a bourbon distillery. Sales have been steady for the past three years, and operating costs have remained unchanged. On January 1, 2019, Mark or Make took advantage of a special deal to prepay its rent for three years at a substantial savings. The amount of the prepayment was $60,000. The income statement items (excluding the rent) are shown here.

2019 2020 2021
Gross profit on sales 350,000 349,000 351,000
Operating expense 210,000 210,000 210,000

Assume that the rental is deducted on the corporate tax purposes in 2019 and that there are no other temporary differences between taxable income and pretax accounting income. In addition, there are no permanent differences between taxable income and pretax accounting income. The corporate tax rate for all three years is 30%.

Required:
Construct income statements for 2019, 2020, and 2021 under the following approaches to interperiod income tax allocation:

a. No allocation
b. Comprehensive allocation
c. Do you believe that no allocation distorts Mark or Make’s net income? Explain.

Statement of Members' Equity, Admitting New Member The statement of members' equity for Bonanza, LLC, follows:

Bonanza, LLC Statement of Members' Equity For the Years Ended December 31, 20Y3 and 20Y4

Idaho Properties, LLC, Member Equity Silver Streams, LLC, Member Equity Thomas Dunn, Member Equity Total Members' Equity
Members' equity, January 1, 20Y3 $273,000 $307,000 $580,000
Net income 57,000 133,000 190,000
Members' equity, December 31, 20Y3 $330,000 $440,000 $770,000
Dunn contribution, January 1, 20Y4 3,000 7,000 $220,000 230,000
Net income 62,500 137,500 50,000 250,000
Member withdrawals (32,000) (48,000) (40,000) (120,000)
Members' equity, December 31, 20Y4 $363,500 $536,500 $230,000 $1,130,000

Required:
a. What was the income-sharing ratio in 2016?
b. What was the income-sharing ratio in 2017?
c. How much cash did Thomas Dunn contribute to Bonanza, LLC, for his interest?
d. Why do the member equity accounts of Idaho Properties, LLC, and Silver Streams, LLC, have positive entries for Thomas Dunn’s contribution?
e. What percentage interest of Bonanza did Thomas Dunn acquire?
f. Why are withdrawals less than net income?

Sheridan Company pays all salaried employees on a biweekly basis. Overtime pay, however, is paid in the next biweekly period. Sheridan accrues salaries expense only at its December 31 year end. Data relating to salaries earned in December 2020 are as follows: Last payroll was paid on 12/26/20, for the 2-week period ended 12/26/20. Overtime pay earned in the 2-week period ended 12/26/20 was $24000. Remaining work days in 2020 were December 29, 30, 31, on which days there was no overtime. The recurring biweekly salaries total $444000.
Assuming a five-day workweek, Sheridan should record a liability at December 31, 2020 for accrued salaries of:_________.
a. $266400
b. $290400
c. $133200
d. $157200

The ledger of Shamrock, Inc. on March 31, 2022, includes the following selected accounts before adjusting entries.

Debit Credit
Supplies 3,990
Prepaid Insurance 2,240
Equipment 33,000
Unearned Service Revenue 13,900

An analysis of the accounts shows the following.

1. Insurance expires at the rate of $280 per month.
2. Supplies on hand total $980.
3. The equipment depreciates $220 per month.
4. During March, services were performed for two-fifths of the unearned service revenue.

Required:
Prepare the adjusting entries for the month of March.

There are 3 factories on the Momiss River. Each emits 2 types of pollutants, labeled P1 and P2, into the river. If the waste from each factory is processed, the pollution in the river can be reduced. It costs $1500 to process a ton of factory 1 waste, and each ton processed reduces the amount of P1 by 0.10 ton and the amount of P2 by 0.45 ton. It costs $1000 to process a ton of factory 2 waste, and each ton processed reduces the amount of P1 by 0.20 ton and the amount of P2 by 0.25 ton. It costs $2000 to process a ton of factory 3 waste, and each ton processed reduces the amount of P1 by 0.40 ton and the amount of P2 by 0.30 ton. The state wants to reduce the amount of P1 in the river by at least 30 tons and the amount of P2 by at least 40 tons.

Required:
Formulate an LP that will minimize the cost of reducing pollution by the desired amounts. Do you think that the LP assumptions (Proportionality, Additivity, Divisibility, and Certainty) are reasonable for this problem?

Which of the following influences what you choose to wear
Your activities

All of the Above

Basic needs

Your personal preferences

Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 4%, and the forecasted payout ratio is 45%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as $1,200,000.
Do not round intermediate calculations. Round your answer to the nearest dollar.

If the cross-price elasticity of demand between Good A and Good B is 3, the price of Good B increases, and the price elasticity of demand for Good B is inelastic, we can expect to see a(n) ________ change in the quantity demanded for Good A. Group of answer choices

Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences:

($ in thousands)
Situation
1 2 3 4
Taxable income $84 $216 $196 $260
Future deductible amounts 16 20 20
Future taxable amounts 16 16 28
Balance(s) at beginning of the year:
Deferred tax asset 2 9 4
Deferred tax liability 8 2

The enacted tax rate is 25%.

Required:

For each situation, determine the following:

Situation
1 2 3 4
a. Income tax payable
b. Deferred tax asset - balance
c. Deferred tax asset - change
d. Deferred tax liability - balance
e. Deferred tax liability - change
f. Income tax expense

Verne Cova Company has the following balances in selected accounts on December 31, 2015
All the accounts have normal balances. The information below has been gathered at December 31, 2015.
1. Verne Cova Company borrowed $10, 000 by signing a 12%, one-year note on September 1, 2015.
2. A count of supplies on December 31, 2015, indicates that supplies of $900 are on hand.
3. Depreciation on the equipment for 2015 is $1,000.
4. Verne Cova Company paid $2,100 for 12 months of insurance coverage on June 1, 2015.
5. On December 1, 2015, Verne Cova collected $30, 000 for consulting services to be performed from December 1, 2015, through March 31, 2016.
6. Verne Cova performed consulting services for a client in December 2015. The client will be billed $4,200.
7. Verne Cova Company pays its employees total salaries of $9,000 every Monday for the proceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked the last 3 days of 2015.

Making Podcasts and Wikis Work for BusinessPodcasts and wikis are part of Web 2.0, which allows users of the web to create content. Prudent business use of Web 2.0 applications can help businesses build and maintain their reputations online. Understanding how to use Web 2.0 communication tools will be important when you are on the job.Businesses have embraced podcasting to broadcast (confidential/ legal/ repetitive?) information that doesn’t require interaction. For example, some companies use podcasts to broadcast HR policies that can be accessed on demand. What function can companies improve by using wikis for collaboration?A. Communication with investors.B. Project management.
C. Customer interaction.
Consider the scenario:You work on the marketing team for a software development company. You have sales representatives in different locations around the globe. When a product update is released, your team holds teleconferences to demo new features. Due to time differences, these demos are difficult to schedule and usually require multiple demo sessions to accommodate different geographic regions. You want to streamline the new product demos and decide to recommend an electronic communication tool to help facilitate this. Which electronic communication tool would you recommend?A. A podcast.B. A wiki.C. An e-mail.

The following information was taken from the accounts of Green Market, a small grocery store, at December 31, Year 2. The accounts are listed in alphabetical order, and all have normal balances.

Accounts payable $800
Accounts receivable 2,250
Advertising expense 600
Cash 1,850
Common stock 2,000
Cost of goods sold 2,950
Interest expense 120
Merchandise inventory 1,250
Prepaid rent 720
Retained earnings, 1/1/Year 2 2,610
Sales revenue 5,600
Salaries expense 960
Rent expense 510
Gain on sale of land 200

Required:
Prepare an income statement for the year using the single-step and multistep approach.

R. J. Graziano Wholesale Corp. uses the LIFO method of inventory costing. In the current year, profit at R. J. Graziano is running unusually high. The corporate tax rate is also high this year, but it is scheduled to decline significantly next year. In an effort to lower the current year's net income and to take advantage of the changing income tax rate, the president of R. J. Graziano Wholesale instructs the plant accountant to recommend to the purchasing department a large purchase of inventory for delivery 3 days before the end of the year. The price of the inventory to be purchased has doubled during the year, and the purchase will represent a major portion of the ending inventory value.

Required:
a. What is the effect of this transaction on this year's and next year's income statement and income tax expense? Why?
b. If R. J. Graziano Wholesale had been using the FIFO method of inventory costing, would the president give the same directive?
c. Should the plant accountant order the inventory purchase to lower income? What are the ethical implications of this order?

As CFO for Everything.Com, you are shopping for 5,000 square feet of usable office space for 25 of your employees in Center City, USA. A leasing broker shows you space in Apex Atrium, a 10-story multi-tenanted office building. This building contains 300,000 square feet of gross building area. A total of 45,000 square feet is interior space and is non-rentable. The non-rentable space consists of areas contained in the basement, elevator core, and other mechanical and structural components. An additional 30,000 square feet of common area is the lobby area usable by all tenants. The 5,000 square feet of usable area that you are looking for is on the seventh floor, which contains 28,000 square feet of rentable area, and is leased by other tenants who occupy a combined total of 20,000 square feet of usable space. The leasing broker indicated that base rents will be $30 per square foot of rentable area.

Required:
a. Calculate total rentable area in the building as though it would be rented to one tenant.
b. Calculate the load factor and common area on the seventh floor only.
c. Calculate the rentable area, including the load factor for common areas on the seventh floor and the total rent per square foot that will be paid by Everything.Com for the coming year if it chooses to lease the space.
d. Adjust (b) assuming that the owner adjusts the load factor for other common areas in the building.
e. Calculate total rent per square foot, assuming that adjusted load factors are applied to usable area for both the common areas in the building lobby and on the seventh floor.

Your company has sales of this year and cost of goods sold of . You forecast sales to increase to next year. Using the percent of sales​ method, forecast next​ year's cost of goods sold. The Tax Cuts and Jobs Act of 2017 temporarily allows​ 100% bonus depreciation​ (effectively expensing capital​ expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career.

The forecasted cost of goods sold (COGS) is $________