On the Industry tab of Market Insight, select the Publishing industry. Open the most recent S&P Industry Survey for Publishing, and then answer the following questions. a. What industries contribute the most advertising revenue to the publishing industry? How would the outlooks for these industries affect the performance of publishing companies? b. Look for the “Industry Trends” section of the report. What trends are noted? […]

Hurte-Paroxysm Products, Inc. (A). Hurte-Paroxysm Products, Inc. (HP) of the United States, exports computer printers to Brazil, whose currency, the reais (R$) has been trading at R$3.40/US$. Exports to Brazil are currently 50,000 printers per year at the reais equivalent of $200 each. A strong rumor exists that the reais will be devalued to R$4.00/$ within two weeks by the Brazilian government. Should the devaluation […]

Royal Industries has for many years enjoyed a moderate but stable growth in sales and earnings. In recent years, it is facing a stiff competition in its plastic product line and, consequently, its sales have been declining. Apprehending further decline in its sales, its management is planning to move eventually out of plastic business altogether and develop new diversified product line in growth-oriented industries. To […]

Alex and Betty have agreed to form a cash-basis general partnershipAs of January 1, 20X4,Alex contributed $175,000 cash and an apartment complex valued at $2,578,000. Alex purchased the complex on April 12, 20X1 for $1,850,000 and has been operating the property as a sole proprietorship. The property is subject to a recourse debt of $775,000 that is assumed by the partnership.Betty contributed $1,080,000 cash and […]

American options Recalculate the value of the Buffelhead call option (see Problem 6), assuming that the option is American and that at the end of the first six months the company pays a dividend of $25. (Thus, the price at the end of the year is either double or half the ex-dividend price in month 6.) How would your answer change if the option were […]

Peter is appreciative of his housemates’ confidence in his new restaurant. Thanks to their investment, he will open its doors in two months. He knows that it will be long hours and hard work for some time after he opens. He is tempted to take on one last adventure before the opening day and decides to go climbing. On his last climb, Peter gets caught […]

The Specialty Chemical Company operates a crude oil refinery located in New Iberia, Louisiana. The company refines crude oil and sells the by-products to companies that make plastic bottles and jugs. The firm is currently planning for its refining needs for one year hence. Specifically, the firm’s analysts estimate that Specialty will need to purchase 1 million barrels of crude oil at the end of […]

Matthews Manufacturing is negotiating a one-year overdraft with its bank, Worldwide Bank. The amount of the overdraft is $6.5 million with an interest rate set at 1.5% above the prime rate. A commitment fee of 0.50% (50 basis points) will be charged on the unused portion of the overdraft. No compensating balances are required, and the loan is made on a 365-day basis. a If […]

Valley Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on July 31, 2014, is shown below. The following business transactions were completed by Valley Realty during August 2014: Instructions 1. Record the August 1 balance of each account in the appropriate balance column of a four-column account, write Balance in the item section, and place a […]

[Internal Operating Schedules] Assume you have developed and tested a prototype electronic product and are about to start your new business. You purchase preprogrammed computer chips at $70 per unit. Other component costs include plastic casings at $15 per unit and assembly hardware at $5 per unit. Direct labor costs are $15 per hour and three units can be produced per hour. You intend to […]