1. Assume that insurers operate in an environment where price regulation does not exist. Describe two potential benefits that this type of system provides to consumers as well as two potential costs. 2. Define agency costs and discuss whether these costs reduce business value. 3. Describe the common objectives that employ
You are examining the financial statements of a company. You observe patent amortization expense of $1.5 million and a loss on impairment of goodwill for $25 million. (a) Describe how the accountants arrived at these amounts. (b) Interpret any information provided by these disclosures.
Differentiate between a defined contribution pension plan and a defined benefit pension plan. Explain how the employer's obligation differs between the two types of plans. Question 10 Identify the five components that comprise pension expense. Briefly explain the nature of each component. E.20-7 (Basic Pension Worksheet) The following defined pension data of Doreen Corp. apply to the year 2008. Projected benefit obligation, 1/1/08 (before amendment) 560,000 Plan assets, 1/1/08 546,200 Prepaid/accrued pension cost (credit) 13,800 "On January 1, 2008, Doreen Corp., through plan amendment, grants prior service benefits having a present value of " 100,000 Settlement rate 9% Service cost 58,000 Contributions (funding) 55,000 Actual (expected) return on plan assets 52,280 Benefits paid to retirees 40,000 Prior service cost amortization for 2008 17,000 Instructions For 2008, prepare a pension worksheet for Doreen Corp. that shows the journal entry for pension expense and the year-end balances in the related pension accounts. E.22-19 (Error Analysis; Correcting Entries) A partial trial balance of Julie Hartsack Corporation is as follows on December 31, 2008. dr. cr. Supplies on hand 2,700 Accrued salaries and wages 1,500 Interest receivable on investments 5,100 Prepaid insurance 90,000 Unearned rent 0 Accrued interest payable 15,000 Additional adjusting data: A physical count of supplies on hand on December 31, 2008, totaled $1,100. Through oversight, the Accrued Salaries and Wages account was not changed during 2008. Accrued salaries and wages on December 31, 2008, amounted to $4,400. The Interest Receivable on Investments account was also left unchanged during 2008. Accrued interest on investments amounts to $4,350 on December 31, 2008. The unexpired portions of the insurance policies totaled $65,000 as of December 31, 2008. $28,000 was received on January 1, 2008 for the rent of a building for both 2008 and 2009. The entire amount was credited to rental income. Depreciation for the year was erroneously recorded as $5,000 rather than the correct figure of $50,000. A further review of depreciation calculations of prior years revealed that depreciation of $7,200 was not recorded. It was decided that this oversight should be corrected by a prior period adjustment. Instructions Assuming that the books have not been closed, what are the adjusting entries necessary at December 31, 2008? (Ignore income tax considerations.) Assuming that the books have been closed, what are the adjusting entries necessary at December 31, 2008? (Ignore income tax considerations.)
Please see attached Question 2 Differentiate between a defined contribution pension plan and a defined benefit pension plan. Explain how the employer's obligation differs between the two types of plans. Question 10 Identify the five components that comprise pension expense. Briefly explain the nature
PROBLEM ATTACHED IN THE FILE Bedrosian Incorporated has a line of credit from the Belmont National Bank that is due to be renewed on February 1. The bank has requested the company's current Income Statement and Comparative Statements of Financial Position which appear below. TAX RATE 40% KEEP SCROOLING DOWN T
Describe the differences between businesses in the U.S. and those in foreign countries with respect to taxation, financial disclosure, and ownership structure. Is privatization reducing or increasing these differences?
Why should a financial manager have an integrated understanding of the 5 basic finance functions? Why is the corporate governance function considered a finance function?
1. Compute the margin, turnover, and return on investment (ROI) in 2005 for each of FedExâ??s four business segments (Hint: page 99 reports total segment assets for each business segment.) 2. Assume that FedEx established a minimum required rate of return of 15% for each of its business segments. Compute the residual inco
Emily and Richard are majority shareholders and President and Vice President respectively of Leeds Holding Company Incorporated. A holding company is set up to own other companies and provide management and expertise. Recently, Emily and Richard have invested in Faster Distribution Company Incorporated, a small publicly trad
What is the difference between operating and financial leverage? What is the importance of assessing operating vs. financial leverage?
Sarah owns 45% of the stock in a C corporation that had a profit of $260,000 in 2011. Kevin owns a 45% interest in a partnership that had a profit of $260,000 during the year. The corporation distributed $30,000 to Sarah, and the partnership distributed $30,000 to Kevin. 1. How much income does Kevin report for 2011? 2. Ho
16- A calendar-year corporation has negative current E&P of $(500) and accumulated positive E&P of $1,000. The corporation makes a $600 distribution to its sole shareholder. Which of the following statements is true? 17- Grand River Corporation reported taxable income of $500,000 in 2010 and paid federal income taxes of $170,
Please help with solution / explanation for the following problem: Acme Manufacturing is a decentralized corporation. Divisions are treated as investment centers. In recent years, Acme has been running about 11% ROA for the corporation as a whole, and has a cost of capital of 9%. One of their most profitable divisions is
When the insured and the insurer disagree on whether a loss is covered or not, should the insured hire an attorney? Please explain.
Suppose that a newspaper stand is operating under the following conditions; paper cost $.4, have no salvage value, and sell for $.80. If the salvage value is increased by$.1, what is the increase in service level? a) .5 b) 1 c) 0.07 d) 0 e) unable to determine given only the above information.
A Northeast Airline gate agent, Chip Gilliken, gives out seat assignments to ticketed passengers. He takes an average of 50 seconds per passenger and is rated 115% in performance. A typical agent is expected to take __ seconds to make the seat assignments (round your response to one decimal place).
Consider the following information for three stocks, A,B,and C, and portfolios of these stocks. The stocks' returns are positively but not perfectly positively correlated with one another ... the correlation coefficients are all between 0 and 1 Stock Expected Standard Deviation Beta
Provide WIP financial controls for collection, disbursement and approval of funds process in writing to be used as a standard operating procedure / showing clear line of accountability.
Describe situations that you have been through which would be appropriate to apply on these two professional skills: 1. Managing Conflict Skills 2. Negotiations Skills Where possible, try to relate all skills in a 'business / financial situation' as my major is Finance. The assignment structure should be as below:
You purchase CSH stock for $40 and it is now selling for $50. The company has announced that it plans a $10 special dividend. Assuming 2008 tax rates, if you sell the stock or wait and receive the dividend, will you have different after tax income? If the capital gains tax rate is 33% and the dividend tax rate is 42%, what is
Why would a good stock drop by $3.00 in one day? What do you tell your client if the market drops again tomorrow and his stock drops with it? Are some people emotionally unsuited to handle the stresses of the ups and downs of the stock market? Should some people stay out of the stock market? If so, what are their invest
A firm issued a preferred stock which matures in 30 years and carries a maturity value of $45. What is the value of the preferred share?
A firm issued a preferred stock which matures in 30 years and carries a maturity value of $45. The dividend is $4 per year over the 30 year period. The current market discount rate for this stock is 8%. What is the value of the preferred share?
Risk that can be eliminated through diversification is called ______ risk. a. unique b. firm-specific c. diversifiable d. all of the above Asset A has an expected return of 20% and a standard deviation of 25%. The risk free rate is 10%. What is the reward-to-variability ratio? a. .40 b. .50 c. .75 d. .80
What would you do if you know that your "whistleblowing" will start a process that will destroy many careers (potentially your own included), the layoffs of many friends and coworkers when the scandal exploded, the loss of many savings and retirement monies. Please provide justification.
Please find the attachment.
A leading broker has advertised money multiplier certificates that will triple your money in nine years; that is, if you buy one for $333.33 today, it will pay you $1,000 at the end of nine years. What rate of return will you earn on these money multiplier certificates?
Is preferred stock more like bonds or common stock? Explain.
Metatrend's stock will generate earnings of $6 per share this year. The discount rate for the stock is 15%. and the rate of return on reinvested earning also is 5%. a. Find both the growth rate of dividends and the price of the stock if the company reinvests the following fraction of its earnings in the firm:(i) 0%; (ii) 40%,
Trend-Line Inc. has been growing at a rate of 6% per year and is expected to continue to do so indefinitely. The next dividend is expected to be $5 per share. a. If the market expects a 10% rate of return on Trend- Line, at what price must it be selling? b. If Trend- Line's earnings per share will be $8, what part of Trend-L
Given the current state of the economy and our financial markets, it it more desirable for firms to raise money through debt or through equity at this time? Corporations almost always need more funds and capital in order to keep running, so not raising funds is not an option. So is debt or equity the best option at this time for a typical corporation given the difficulties of our financial markets?
Given the current state of the economy and our financial markets, it it more desirable for firms to raise money through debt or through equity at this time? Corporations almost always need more funds and capital in order to keep running, so not raising funds is not an option. So is debt or equity the best option at this time for
Please give at least three lessons that can be learned from the stock market crash of 2002 in the applied business world? What was the significance of the stock market crash of 2002 to managerial finance?