Question & Answer

What are the advantages of a three-plate mold over a two-plate mold in injection molding?

Martin Corporation is planning to issue 3,000 shares of its own $10 par value common stock for two acres of land to be used as a building site. Instructions (a) What general rule should be applied to determine the amount at which the land should be recorded? (b) Under what circumstances should this transaction be recorded at the fair value of the land? (c) Under what circumstances should this transaction be recorded at the fair value of the stock issued? (d) Assume Martin intentionally records this transaction at an amount greater than the fair value of the land and the stock. Discuss this situation.

Explain how return on investment (ROI) is calculated and how it can be         decomposed into two financial measures.

What accounting assumption, principle, or constraint would Target Corporation use in each of the situations below? (a) Target was involved in litigation over the last year. This litigation is disclosed in the financial statements. (b) Target allocates the cost of its depreciable assets over the life it expects to receive revenue from these assets. (c) Target records the purchase of a new Dell PC at its cash equivalent price.

1.    : How has Ken Byers shaped the sales culture at Hull Engineering? Do you consider this culture to be at a preconventional, conventional, or postconventional level of ethical development? Why?

A shareholder receives appreciated noncash property in a corporate distribution and assumes a liability attached to the property. How does the assumption affect the amount of dividend the shareholder reports in gross income (assuming adequate E&P)?

Earnings per share can affect market prices of common stock. Can market prices affect earnings per share? Explain.

What are the most common legal entities used for operating a business? How are these entities treated similarly and differently for state law purposes?

John Fillmore’s lifelong dream is to own his own fishing boat to use in his retirement. John has recently come into an inheritance of $400,000. He estimates that the boat he wants will cost $300,000 when he retires in 5 years. How much of his inheritance must he invest at an annual rate of 12% (compounded annually) to buy the boat at retirement?

Name three approaches to measuring benefit obligations from a pension plan and explain how they differ.

Assume that you are looking for a job and are offered two. One is more enjoyable, but pays less. How would you make a rational choice between the two jobs?

A DC servomotor drives the y-axis of a NC milling machine table. The motor is coupled to the table lead screw with a gear reduction of 2:1 (2 turns of the motor shaft for each single rotation of the lead screw). There are 2 threads per cm in the lead screw. An optical encoder is directly connected to the lead screw (1:1 gear ratio). The optical encoder emits 100 pulses per revolution. To execute a certain programmed instruction, the table must move from point (x = 25.0 mm, y = 28.0) to point (x = 155.0 mm, y = 275.0 mm) in a straight-line trajectory at a feed rate = 200 mm/min. For the y-axis only, determine: (a) the control resolution of the mechanical system, (b) rotational speed of the motor, and (c) frequency of the pulse train emitted by the optical encoder at the desired feed rate.

1.       : Lana Lowery, a regional manager for a 100-person inside-sales team, notices that the team’s best performer is struggling. Her sales are down 20 percent from a year ago, and she frequently arrives late for work, looking upset. Lowery needs to find out why her performance is suffering. What advice would you give Lowery for communicating with this employee? Which communication channel should she use? What would be the relative importance of candor, listening, and asking questions? Explain.

As compared with the FIFO method of costing inventories, does the LIFO method result in a larger or smaller net income in a period of rising prices? What is the comparative effect on net income in a period of falling prices?

A cup-shaped part is to be drawn without a blankholder from sheet metal whose thickness = 0.25 in. The inside diameter of the cup = 2.5 in, its height = 1.5 in, and the corner radius at the base = 0.375 in. (a) What is the minimum starting blank diameter that can be used, according to Eq. (20.14)? (b) Does this blank diameter provide sufficient material to complete the cup?

Explain why the use of residual income for performance evaluation provides better incentives, in some ways, than ROI, but still causes managers to make some decisions that could be harmful to an organisation in the long run.

Consider the prevailing conditions for inflation (including oil prices), the economy, the budget deficit, and the Fed’s monetary policy that could affect interest rates. Based on these conditions, do you think bond prices will increase or decrease during this semester? Offer some logic to support your answer. Which factor do you think will have the biggest impact on bond prices? (LO2)

1. Trace through the effects of a squeeze on the monetary base from an initial reduction in cash, to banks’ liquidity being restored by the rediscounting of bills. Will this restoration of liquidity by the Bank of England totally nullify the initial effect of reducing the supply of cash? (Clue: what is likely to happen to the rate of interest?) 2. Given the difficulties of monetary base control, would you expect cash in circulation and broader measures of the money supply, such as M4, to rise and fall by the same percentage as each other?

What adverse internal effects may follow from (a) a depreciation of the exchange rate; (b) an appreciation of the exchange rate?

Since advertising increases a firm’s costs, will prices necessarily be lower with sales revenue maximisation than with profit maximisation?

If factor X costs twice as much as factor Y (Px/Py = 2), what can be said about the relationship between the MPPs of the two factors if the optimum combination of factors is used?

What price should be used when there is such a distortion?

Distinguish between cash-basis accounting and accrualbasis accounting. Why is accrual-basis accounting acceptable for most businesses and the cash-basis unacceptable in the preparation of an income statement and a balance sheet?

List several different sources of information used in job costing, and explain why this information is required.

Why may managers choose to set prices that cover all costs including sunk costs.