Question & Answer

Breslin Inc. made a capital contribution of investment property to its 100 percent-owned subsidiary, Crisler Company. The investment property had a fair market value of $3,000,000 and a tax basis to Breslin of $2,225,000.

Explain why the market for auction-rate securities suffered in 2008. (LO4)

. Identify how structure is influenced by an organization’s strategic goals and its workflow technology

Explain how the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) reduced the perceived risk of savings institutions. (LO1)

If a bank has more rate-sensitive liabilities than rate-sensitive assets, what will happen to its net interest margin during a period of rising interest rates? During a period of declining interest rates? (LO3)

What is reinsurance? (LO4)

Does this mean, therefore, that there were no positive incentive effects from the 1979–97 Conservative government’s tax measures?

Indicate the section of a multiple-step income statement in which each of the following is shown. (a) Loss on inventory write-down. (b) Loss from strike. (c) Bad debt expense. (d) Loss on disposal of a component of the business. (e) Gain on sale of machinery. (f) Interest revenue. (g) Depreciation expense. (h) Material write-offs of notes receivable.

In the movie Wall Street, Bud Fox is a broker who conducts trades for Gordon Gekko’s firm. Gekko purchases shares of firms that he believes are undervalued. Various scenes in the movie offer excellent examples of concepts discussed in this chapter. (LO3, LO4, LO6) a. Bud Fox comments to Gordon Gekko that a firm’s breakup value is twice its market price. What is Bud suggesting in this statement? How would employees of the firm respond to Bud’s statement? b. When Bud informs Gekko that another investor, Mr. Wildman, is secretly planning to acquire a target firm in Pennsylvania, Gekko tells Bud to buy a large amount of this stock. Why? c. Gekko says “Wonder why fund managers can’t beat the S&P 500? Because they are sheep.” What is Gekko’s point? How does it relate to market efficiency?

What types of information in addition to cost accounting are needed for management decisions?

Have unemployment rates generally risen or fallen over the decades or is there no discernible pattern? Does the answer vary by country?

Explain the role of the SEC, FINRA, and the stock exchanges in regulating the securities industry. (LO2)

Elastomers and thermosetting polymers are both cross-linked. Why are their properties so different?

1.    : Should a multinational organization operate as a tightly integrated, worldwide business system, or would it be more effective to let each national subsidiary operate autonomously? Why?

According to the video on sheet-metal shearing, what is the blade rake angle?

Explain the categories of task-oriented behavior and people-oriented behavior and how they are related to leader effectiveness in different situations and settings.

Read the following letter and help Shady Slim with his tax situation.  Assume that gross income is $172,900 (which consists only of salary) and filing status of single for purposes of this problem.

ELS Corporation reported gross receipts for 2021-2023 for Scenarios A, B, and C as follows:

Explain the use of the price-earnings ratio for valuing a stock. Why might investors derive different valuations for a stock when using the PE method? Why might investors derive an inaccurate valuation of a firm when using the PE method? (LO1)

What key measures should be included in a sustainability balanced       scorecard?

Two positions have normally been taken with respect to the recording of fixed manufacturing overhead as an element of the cost of plant assets constructed by a company for its own use: (a) It should be excluded completely. (b) It should be included at the same rate as is charged to normal operations. What are the circumstances or rationale that support or deny the application of these methods?

How do banks use duration analysis? (LO3)

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

Estate agents consistently ‘talk up’ the housing market, often predicting price rises when other commentators are more cautious. Explain why they might have a vested interest in doing so.

How could a bank generate higher income before tax (as a percentage of assets) when its net interest margin has decreased? (LO2)