Question & Answer

(Threshold Concept 5) 1. Give two other examples of perverse incentives. How could the incentives be improved? (Threshold Concept 5) 2. Suppose that the kitchen is very untidy – what are the incentives for you to address this? What incentives could you use to get someone else to do it for you? (Threshold Concept 5) 3. Many students undertake voluntary work while at university. What do you think the incentives are for this? Identify any perverse incentives associated with volunteering and how they could be addressed.

Explain the impact of a decline in interest rates on: a. An investor’s required rate of return, b. The present value of existing bonds, c. The prices of existing bonds. (LO1).

Irene is disabled and receives payments from a number of sources. The interest payments are from bonds that Irene purchased over past years and a disability insurance policy that Irene purchased herself. Calculate Irene’s gross income.

Bronson Paper Products purchased 10,000 acres of forested timberland in March 2014. The company paid $1,700 per acre for this land, which was above the $800 per acre most farmers were paying for cleared land. During April, May, June, and July 2014, Bronson cut enough timber to build roads using moveable equipment purchased on April 1, 2014. The cost of the roads was $250,000, and the cost of the equipment was $225,000; this equipment was expected to have a $9,000 salvage value and would be used for the next 15 years. Bronson selected the straight-line method of depreciation for the moveable equipment. Bronson began actively harvesting timber in August and by December had harvested and sold 540,000 board feet of timber of the estimated 6,750,000 board feet available for cutting. In March 2015, Bronson planted new seedlings in the area harvested during the winter. Cost of planting these seedlings was $120,000. In addition, Bronson spent $8,000 in road maintenance and $6,000 for pest spraying during calendar-year 2015. The road maintenance and spraying are annual costs. During 2015, Bronson harvested and sold 774,000 board feet of timber of the estimated 6,450,000 board feet available for cutting. In March 2016, Bronson again planted new seedlings at a cost of $150,000, and also spent $15,000 on road maintenance and pest spraying. During 2016, the company harvested and sold 650,000 board feet of timber of the estimated 6,500,000 board feet available for cutting. Instructions Compute the amount of depreciation and depletion expense for each of the 3 years (2014, 2015, and 2016). Assume that the roads are usable only for logging and therefore are included in the depletion base.

Nicole organized a new corporation. The corporation began business on April 1 of year 1. She made the following expenditures associated with getting the corporation started: Expense Date Amount Attorney fees for articles of incorporation February 10 $32,000 March 1 – March 30 wages March 30 $4,500  March 1 – March 30 rent March 30 $2,000 Stock issuance costs April 1 $20,000 April 1 – May 30 wages May 30 $12,000  a. What is the total amount of the start-up costs and organizational expenditures for Nicole’s corporation? b. What amount of the start-up costs and organizational expenditures may the corporation immediately expense in year 1 (excluding the portion of the expenditures that are amortized over 180 months)? c. What amount can the corporation deduct as amortization expense for the organizational expenditures and for the start-up costs for year 1 [not including the amount determined in part (b)]? d. What would be the total allowable organizational expenditures if Nicole started a sole proprietorship instead of a corporation?

What are the two joint types most commonly used in brazing?

What is the form of the starting material in thermoforming?

What is the starting material in fused-deposition modeling?

Scatter plots, cost function using regression, two potential cost drivers Suppose we need to predict the cost of maintenance for Brush Valley High School for the upcoming school year. From the school district records we gather weekly data about costs and volumes for two potential cost drivers: labour hours used in the maintenance department and number of enrolled students.   Required (a)          Identify and explain two potential cost drivers for total maintenance cost, in addition to number of students and maintenance hours worked. (b)          Create a scatter plot, first for maintenance cost against hours worked and then maintenance cost against students. (c)           Would you eliminate either cost driver based on the plots? Explain. (d)          Perform regression analysis using each cost driver. Use your judgement to determine the most appropriate cost driver and write out the cost function for maintenance cost. (e)           Can we know for certain that the cost driver chosen in part (d) is the best cost driver? Why?

Solve Problem 24.19 except that in part (a), determine the cutting speeds for maximum production rate

Roley Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. On July 1, Roley purchased $60,000 of inventory, terms 2/10, n/30, FOB shipping point. Roley paid freight costs of $1,200. On July 3, Roley returned damaged goods and received credit of $6,000. On July 10, Roley paid for the goods. Prepare all necessary journal entries for Roley.

{Planning} Rick, who is single, has been offered a position as a city landscape consultant.The position pays $125,000 in cash wages.Assume Rick files single and is entitled to one personal exemption.Rick deducts the standard deduction instead of itemized deductions a.What is the amount of Rick’s after-tax compensation (ignore payroll taxes)?

Discuss the entrance of savings institutions into the market for consumer and commercial lending. What are the potential risks and rewards of this strategy? Discuss the conflict between diversification and specialization of SIs. (LO2)

Aishwarya’s husband passed away in 2023. She needs to determine whether Jasmine, her 17-year-old stepdaughter who is single, qualifies as her dependent in 2024. Jasmine is a resident but not a citizen of the United States. She lived in Aishwarya’s home from June 15 through December 31, 2024. Aishwarya provided more than half of Jasmine’s support for 2024.

Consider the following tax rate structure.  Is it horizontally equitable?  Why or why not?  Is it vertically equitable?  Why or why not?

Sarah is a cash-method, calendar-year taxpayer, and she is considering making the following cash payments related to her business. Calculate the after-tax cost of each payment assuming she has a 37 percent marginal tax rate.

Describe the primary activities in the value chain for your college or university. In your opinion, which primary activities create the most value?

The nylons are members of which polymer group?

1.       : If you wanted to add a group of food scientists to a large organization such as PepsiCo, would you centralize the scientists in a central pool at headquarters or decentralize them to separate divisions? Discuss your reasons.

1.    How might the teaching of a management course be designed to help people make the transition from individual performer to manager so as to prepare them for the challenges they will face as new managers?

A 42.0-mm-thick plate made of low carbon steel is to be reduced to 34.0 mm in one pass in a rolling operation. As the thickness is reduced, the plate widens by 4%. The yield strength of the steel plate is 174 MPa and the tensile strength is 290 MPa. The entrance speed of the plate is 15.0 m/min. The roll radius is 325 mm and the rotational speed is 49.0 rev/min. Determine (a) the minimum required coefficient of friction that would make this rolling operation possible, (b) exit velocity of the plate, and (c) forward slip.

What explanations can you give for the increase in both unemployment and inflation in the 1970s?

Why is it necessary to develop a definitional framework for the basic elements of accounting?

Consider the argument that whether an industry is in the public sector or private sector has far less bearing on its performance than the degree of competition it faces.

Shania Twain Company was formed on December 1, 2013. The following information is available from Twain’s inventory records for Product BAP. Units Unit Cost January 1, 2014 (beginning inventory) 600 $ 8.00 Purchases: January 5, 2014 1,200 9.00 January 25, 2014 1,300 10.00 February 16, 2014 800 11.00 March 26, 2014 600 12.00 A physical inventory on March 31, 2014, shows 1,600 units on hand. Instructions Prepare schedules to compute the ending inventory at March 31, 2014, under each of the following inventory methods. (a) FIFO. (b) LIFO. (c) Weighted-average (round unit costs to two decimal places).