Question & Answer

Explain how investors’ preferences for commercial paper change during a recession. How would this reaction affect the difference between commercial paper rates and T-bill rates during recessionary periods? (LO1)

Draw a similar diagram to Figure 25.9 showing how an appreciation of the exchange rate would similarly be reduced by stabilising speculation.

Solve Problem 21.25 except that the feed = 0.0075 in/rev and the work material is stainless steel (Brinell Hardness = 240 HB)

Explain how legal business entities differ in terms of the liability protection they provide their owners.

} Assume Ellina earns a 10 percent after-tax rate of return, and that she owes a friend $1,200.  Would she prefer to pay the friend $1,200 today or $1,750 in four years?

A leadscrew coupled directly to a dc servomotor is used to drive one of the table axes of an NC milling machine. The leadscrew has 5 threads/in. The optical encoder attached to the leadscrew emits 100 pulses/rev of the leadscrew. The motor rotates at a maximum speed of 800 rev/min. Determine (a) the control resolution of the system, expressed in linear travel distance of the table axis; (b) the frequency of the pulse train emitted by the optical encoder when the servomotor operates at maximum speed; and (c) the travel speed of the table at the maximum rpm of the motor.

Specific identification is sometimes said to be the ideal method of assigning cost to inventory and to cost of goods sold. Briefly indicate the arguments for and against this method of inventory valuation.

1.      : Are Connie and her staff on the right track to avoid manager mishaps by defining a new set of leader rules and core values and imposing it by fiat, from the top down?

On January 1, 2014, Pennington Corporation purchased 30% of the common shares of Edwards Company for $180,000. During the year, Edwards earned net income of $80,000 and paid dividends of $20,000. Instructions Prepare the entries for Pennington to record the purchase and any additional entries related to this investment in Edwards Company in 2014.

Under what circumstances would you expect the after-tax return from an investment in a capital asset to approach that of tax-exempt assets assuming equal before-tax rates of return?

Under what circumstances would (a) contractionary and (b) expansionary policies cause no conflict between internal and external objectives?

Why is the earned income credit referred to as a negative income tax?

Explain how the Covid-19 pandemic affected the credit risk premium and liquidity in the commercial paper market. (LO1)

What is forging?

Mechanical surface treatments are often performed for reasons other than or in addition to cleaning. What are the reasons?

Explain why securities firms from the United States have expanded into foreign markets. (LO1)

1.       : Do you agree with the idea that people have innate biases and will automatically discriminate if left to their own devices? Discuss.

1.    How might a corporate management team go about determining whether the company should diversify? What factors should team members consider? What kinds of information should they collect?

Explain the use of circuit breakers. (LO3)

At December 31, 2013, Shiga Naoya Corporation had the following stock outstanding. 10% cumulative preferred stock, $100 par, 107,500 shares $10,750,000 Common stock, $5 par, 4,000,000 shares 20,000,000 During 2014, Shiga Naoya did not issue any additional common stock. The following also occurred during 2014. Income from continuing operations before taxes $23,650,000 Discontinued operations (loss before taxes) $ 3,225,000 Preferred dividends declared $ 1,075,000 Common dividends declared $ 2,200,000 Effective tax rate 35% Instructions Compute earnings per share data as it should appear in the 2014 income statement of Shiga Naoya Corporation. (Round to two decimal places.)

If XYZ Corporation is a shareholder of BCD Corporation, how many times will  BCD’s before-tax income potentially be taxed? Has Congress provided any tax relief for this result? Explain.

How could we model a credit market disruption and its impact on interest-rate differentials using the Keynesian cross (Keynesian 45° line) diagram?

a.       Elmer should include in gross income the $1,200 gross pay he received for the three days he was not required to work but still received compensation. b.       Amax employees should include the value of the furniture ($250) in gross income.

Explain the differences and similarities between personal property, real property, intangible property, and natural resources. Also, provide an example of each type of asset.

During the credit crisis of 2008 and 2009, U.S. interest rates were extremely low, which enabled businesses to borrow at a low cost. Holding other factors constant, this should have resulted in a higher number of feasible projects, which should have encouraged businesses to borrow more money and expand. Yet, many businesses that had access to loanable funds were unwilling to borrow during the credit crisis. What other factor changed during this period that more than offset the potentially favorable effect of the low interest rates on project feasibility, therefore discouraging businesses from expanding? (LO2)