Question & Answer

Describe a call option on interest rate futures. How does it differ from purchasing a futures contract? (LO6)

2. What are the advantages and disadvantages of presenting data graphically with the axes starting from zero?

Why will investment affect both actual (short-term) growth and the long-term growth in potential output? What will be the implications if these two effects differ in magnitude?

Determine the shear strain that is experienced by the material that is shear spun in Problem 20.33

Why are aluminum and copper alloys unsuitable for use in hot chamber die casting?

What is the difference between crystalline and noncrystalline structures in materials?

Johnny Football Shop began operations on January 2, 2014. The following stock record card for footballs was taken from the records at the end of the year. Units Unit Invoice Gross Invoice Date Voucher Terms Received Cost Amount 1/15 10624 Net 30 50 $20 $1,000 3/15 11437 1/5, net 30 65 16 1,040 6/20 21332 1/10, net 30 90 15 1,350 9/12 27644 1/10, net 30 84 12 1,008 11/24 31269 1/10, net 30 76 11 836 Totals 365 $5,234 A physical inventory on December 31, 2014, reveals that 100 footballs were in stock. The bookkeeper informs you that all the discounts were taken. Assume that Johnny Football Shop uses the invoice price less discount for recording purchases. Instructions (a) Compute the December 31, 2014, inventory using the FIFO method. (b) Compute the 2014 cost of goods sold using the LIFO method. (c) What method would you recommend to the owner to minimize income taxes in 2014, using the inventory information for footballs as a guide?

How does information from the balance sheet help users of the financial statements?

Identify and explain the three types of classifications for investments in debt securities.

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?

Shumway Oil uses successful-efforts accounting and also provides full-cost results as well. Under full-cost, Shumway Oil would have reported retained earnings of $42 million and net income of $4 million. Under successfulefforts, retained earnings were $29 million, and net income was $3 million. Explain the difference between full-costing and successful-efforts accounting.

What is an installment sale?  How do the tax laws ensure that taxpayers recognize all the gain they realize on an installment sale?  How is depreciation recapture treated in an installment sale?  Explain the gross profit ratio and how it relates to gains recognized under installment method sales.

This year Elizabeth agreed to a three-year service contract with an engineering consulting firm to improve efficiency in her factory. The contract requires Elizabeth to pay the consulting firm $1,500 for each instance that Elizabeth requests its assistance. The contract also provides that Elizabeth only pays the consultants if their advice increases efficiency as measured 12 months from the date of service. This year Elizabeth requested advice on three occasions, and she has not yet made any payments to the consultants.  a) How much should Elizabeth deduct this year under this service contract if she uses the accrual method of accounting?  b) How much should Elizabeth deduct this year under this service contract if she uses the cash method of accounting?

Solve Problem 34.3, only use a wafer size of 257 mm whose processable area has a diameter = 250 mm. What is the percent increase in (a) wafer diameter, (b) processable wafer area, and (c) number of chips, compared to the values in the previous problem?

Wanting to finalize a sale before year-end, on December 29, WR Outfitters sold to Bob a warehouse and the land for $125,000. The appraised fair market value of the warehouse was $75,000, and the appraised value of the land was $100,000.  a. What is Bob’s basis in the warehouse and in the land? b. What would be Bob’s basis in the warehouse and in the land if the appraised value of the warehouse is $50,000 and the appraised value of the land is $125,000? c. Which appraisal would Bob likely prefer?

In what way is the provision of information a public good? Do all the examples above come into the category of public goods? Give some other examples of information which is a public good. (Clue: refer back to the characteristics of public goods in section 12.2 and do not confuse a public good with something merely provided by the government, which could also be provided by the private sector.)

In porcelain enameling, what is frit?

A rotational molding operation is to be used to mold a hollow playing ball out of polypropylene. The ball will be 1.25 ft in diameter and its wall thickness should be 3/32 in. What weight of PP powder should be loaded into the mold in order to meet these specifications? The specific gravity of the PP grade is 0.90, and the density of water is 62.4 lb/ft3 .

Seven samples of 5 parts each have been collected from an extrusion process that is in statistical control, and the diameter of the extrudate has been measured for each part. The calculated values of x for each sample are (inch) 1.002, 0.999, 0.995, 1.004, 0.996, 0.998, and 1.006. The values of R are (inch) 0.010, 0.011, 0.014, 0.020, 0.008, 0.013, and 0.017, respectively. (a) Determine the values of the center, LCL, and UCL for x and R charts. (b) Construct the control charts and plot the sample data on the charts.

When the FASB issues new pronouncements, the implementation date is usually 12 months from date of issuance, with early implementation encouraged. Karen Weller, controller, discusses with her financial vice president the need for early implementation of a rule that would result in a fairer presentation of the company’s financial condition and earnings. When the financial vice president determines that early implementation of the rule will adversely affect the reported net income for the year, he discourages Weller from implementing the rule until it is required. Instructions Answer the following questions. (a) What, if any, is the ethical issue involved in this case? (b) Is the financial vice president acting improperly or immorally? (c) What does Weller have to gain by advocacy of early implementation? (d) Which stakeholders might be affected by the decision against early implementation?

Has the problem of adverse regional multiplier effects been made better or worse by the adoption of a single European currency? (This issue is explored in section 26.3.) (Clue: without a single currency, how would the devaluation of the drachma (the former Greek currency) have affected a depressed Greek economy?)

A hydraulic forging press is capable of exerting a maximum force = 1,000,000 N. A cylindrical workpart is to be cold upset forged. The starting part has diameter = 30 mm and height = 30 mm. The flow curve of the metal is defined by K = 400 MPa and n = 0.2. Determine the maximum reduction in height to which the part can be compressed with this forging press, if the coefficient of friction = 0.1. Use of a spreadsheet calculator is recommended

What is rolling in the context of the bulk deformation processes?

Intangibles have either a limited useful life or an indefinite useful life. How should these two different types of intangibles be amortized?

(Threshold Concept 11) 1. Why might consumers not always make efficient consumption decisions? (Threshold Concept 11) 2. Explain the meaning of social efficiency using the concept of Pareto optimality.