...Solution of Chapter 1 1.1 In a multiprogramming and time-sharing environment, several users share the system simultaneously. This situation can result in various security problems. a. What are two such problems? b. Can we ensure the same degree of security in a time-shared machine as in a dedicated machine? Explain your answer. Answer: a. Stealing or copying one’s programs or data; using system resources (CPU, memory, disk space, peripherals) without proper accounting. b. Probably not, since any protection scheme devised by humans can inevitably be broken by a human, and the more complex the scheme, the more difficult it is to feel confident of its correct implementation. 1.2 The issue of resource utilization shows up in different forms in different types of operating systems. List what resources must be managed carefully in the following settings: a. Mainframe or minicomputer systems b. Workstations connected to servers c. Handheld computers Answer: a. Mainframes: memory and CPU resources, storage, network bandwidth. b. Workstations: memory and CPU resources c. Handheld computers: power consumption, memory resources. 1.3 Under what circumstances would a user be better off using a timesharing system rather than a PC or single-user workstation? Answer: When there are few other users, the task is large, and the hardware is fast, time-sharing makes sense. The full power of the system can be brought to bear on the user’s problem. The problem can be solved faster...
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...Name Chapter 1: Auditing: Integral to the Economy Description Instructions Modify Add Question Here Question 1 True/False 0 points Modify Remove Question The need for assurance services arises because the interests of the users of information may be different from that of the interests of those responsible for providing information. Answer True False Add Question Here Question 2 True/False 0 points Modify Remove Question An audit of financial statements is a form of attestation service. Answer True False Add Question Here Question 3 True/False 0 points Modify Remove Question Independence is an attribute necessary to perform assurance services. Answer True False Add Question Here Question 4 True/False 0 points Modify Remove Question A bank using Milton Company's financial statements to determine the creditworthiness of a potential loan to Milton is a good example of the need for unbiased reporting. Answer True False Add Question Here Question 5 True/False 0 points Modify Remove Question Independence is only required for assurance service providers. Answer True False Add Question Here Question 6 True/False 0 points Modify Remove Question A CPA automatically qualifies as an assurance provider in all areas of business. Answer True False Add Question Here Question 7 True/False 0 points Modify Remove Question Attestation services are a subset of assurance services and always involve a report that...
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...x Chapter 1 Summary of End-of-Chapter Problem Revisions |2012 Edition |2011 Edition | | |Problem Number |Problem Number |2012 Edition Modifications | |1 |1 | | |2 |2 | | |3 |3 | | |4 |4 | | |5 |5 | | |6 |6 | | |7 |7 | | |8 |8 | | |9 |9 | ...
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...Chapter 1 27. If they get married in 2010 and file jointly they will pay $38,643.50 [(10% x $16,750) + (15% x $51,250) + (25% x $69,300) + (28% x $42,700)]. If they wait until 2011 to get married and Conrad files as a single individual he will pay $44,516.75 [(10% x $8,375) + (15% x $25,625) + (25% x $48,400) + (28% x $89,450) + (33% x $8,150)]. It would be to their advantage to marry before the end of 2010 because they would save $5,873.25 in income taxes. If they each made $90,000 and both filed individually, they would pay in a combined total of $37,818.50 = 2 x $18,909.25 [(10% x $8,375) + (15% x $25,625) + (25% x $48,400) + (28% x $7,600)]. In this case, it would make more sense to wait until 2011 to get married and each file individually in 2010 because it will save them an additional $825. It would make no difference if they got married in 2010 and filed jointly or separately $38,643.50 = 2 x $19,321.75 [(10% x $8,375) + (15% x $25,625) + (25% x $34,650) + (28% x $21,350)]. 28. John: $4,081.25 [(10% x $8,375) + (15% x $21,625)] William: $11,181.25 [(10% x 8,375) + (15% x $25,625) + (25% x $26,000)] William’s taxable income is twice that of John’s, but William’s taxes are 2.74 times that of John’s. This illustrates vertical equity as well as a progressive tax system where each tax bracket pays a different percentage of their income in taxes – the more money you earn, the higher your tax rate; and, just because you earn twice as much as someone else, it...
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...Chapter 1: Answers to Questions and Problems 1. Consumer-consumer rivalry best illustrates this situation. Here, Levi Strauss & Co. is a buyer competing against other bidders for the right to obtain the antique blue jeans. 2. The maximum you would be willing to pay for this asset is the present value, which is 150, 000 150, 000 150, 000 150, 000 150, 000 PV = + + + + 2 3 4 (1 + 0.09 ) (1 + 0.09 ) (1 + 0.09 ) (1 + 0.09 ) (1 + 0.09 )5 = $583, 447.69. 3. a. Net benefits are N (Q ) = 50 + 20Q − 5Q 2 . b. Net benefits when Q = 1 are N (1) = 50 + 20 − 5 = 65 and when Q = 5 they are N (5) = 50 + 20(5) − 5(5) = 25 . Marginal net benefits are MNB (Q ) = 20 − 10Q . Marginal net benefits when Q = 1 are MNB (1) = 20 − 10(1) = 10 and when Q = 5 they are MNB (5) = 20 − 10(5) = −30 . Setting MNB(Q ) = 20 − 10Q = 0 and solving for Q , we see that net benefits are maximized when Q = 2 . When net benefits are maximized at Q = 2 , marginal net benefits are zero. That is, MNB (2 ) = 20 − 10(2 ) = 0 . 2 c. d. e. f. 4. a. The value of the firm before it pays out current dividends is ⎛ 1 + 0.08 ⎞ PV firm = $550, 000 ⎜ ⎟ ⎝ 0.08 − 0.05 ⎠ . = $19.8 million b. The value of the firm immediately after paying the dividend is ⎛ 1 + 0.05 ⎞ Ex −Dividend = $550,000⎜ PV firm ⎟ ⎝ 0.08 − 0.05 ⎠ . = $19.25 million 5. The present value of the perpetual stream of cash flows. This is given by PVPerpetuity = CF $75 = = $1,875. i 0.04 ...
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...Chapter 1 Review Questions Solutions 1. What is information systems analysis and design? Information systems analysis and design is the process of developing and maintaining an information system. 2. What is systems thinking? How is it useful for thinking about computer-based information systems? Systems thinking involves identifying something as a system, visualizing the system and translating it into abstract terms, and thinking about the characteristics of the specific situation. Systems thinking is useful for thinking about computer-based information systems because information systems can be seen as subsystems in larger organizational systems, taking input from, and returning output to, their organizational environments. 3. What is decomposition? Coupling? Cohesion? Decomposition is the process of breaking down a system into its component parts. Coupling is the extent to which subsystems are dependent on each other. Cohesion is the extent to which a system or a subsystem performs a single function. 4. In what way are organizations systems? Organizations are systems because they are made up of interrelated components working together for a purpose. They take input from and return output to their environments. Organizations can be redesigned through a systems analysis and design process by which system components are replaced while preserving interconnections between components. 5. List and explain the different phases in the systems development...
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...Assignment 1 – Chapter 1 1.1 (a) intelligence – means to have the knowledge to learn and understand different situations. (b) artificial intelligence – the ability of a computer or robot to act like a human and make decisions based on pre-defined rules. (c) agent – is the entity that is doing the actions, it can interact with the environment, change it, and learn from it. (d) rationality – is the ability of doing the right thing based on what it already knows or has learned from the environment. (e) logical reasoning – is the process using arguments, statements, premises, and axioms to determine whether a statement is true or false. 1.3 - Yes, reflex actions such as flinching from a hot stove are rational because it is the right thing to do. We don’t think before we flinch from a hot stove because it suppose to be quick, thinking will defeat the purpose of flinching. - No, I believe that reflex actions are not intelligent because you don’t have to put any thought into them, we do them automatically. 1.4 No, the program wouldn’t be more intelligent than a human because the artificial intelligence systems will avoid trying to solve problems. Humans don’t solve complete problems either, but they are good at solving a lot of structure using knowledge they have learned. Artificial intelligent systems attempt to do the same as humans. IQ test scores interact well with certain other measures only if they are measuring normal humans, it doesn’t measure anything...
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...1-1. What is the most important difference between a corporation and all other organizational forms? A corporation is a legal entity separate from its owners. 1-2. What does the phrase limited liability mean in a corporate context? Owners’ liability is limited to the amount they invested in the firm. Stockholders are not responsible for any encumbrances of the firm; in particular, they cannot be required to pay back any debts incurred by the firm. 1-3. Which organizational forms give their owners limited liability? Corporations and limited liability companies give owners limited liability. Limited partnerships provide limited liability for the limited partners, but not for the general partners. 1-4. What are the main advantages and disadvantages of organizing a firm as a corporation? Advantages: Limited liability, liquidity, infinite life Disadvantages: Double taxation, separation of ownership and control 1-5. Explain the difference between an S corporation and a C corporation. C corporations must pay corporate income taxes; S corporations do not pay corporate taxes, but must pass through the income to shareholders to whom it is taxable. S corporations are also limited to 75 shareholders and cannot have corporate or foreign stockholders. 1-6. You are a shareholder in a C corporation. The corporation earns $2 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. The corporate tax rate is 40% and the personal...
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...CHAPTER 1 Introduction Practice Questions Problem 1.1 What is the difference between a long forward position and a short forward position? When a trader enters into a long forward contract, she is agreeing to buy the underlying asset for a certain price at a certain time in the future. When a trader enters into a short forward contract, she is agreeing to sell the underlying asset for a certain price at a certain time in the future. Problem 1.2. Explain carefully the difference between hedging, speculation, and arbitrage. A trader is hedging when she has an exposure to the price of an asset and takes a position in a derivative to offset the exposure. In a speculation the trader has no exposure to offset. She is betting on the future movements in the price of the asset. Arbitrage involves taking a position in two or more different markets to lock in a profit. Problem 1.3. What is the difference between entering into a long forward contract when the forward price is $50 and taking a long position in a call option with a strike price of $50? In the first case the trader is obligated to buy the asset for $50. (The trader does not have a choice.) In the second case the trader has an option to buy the asset for $50. (The trader does not have to exercise the option.) Problem 1.4. Explain carefully the difference between selling a call option and buying a put option. Selling a call option involves giving someone else the right to buy an asset from you...
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...2.21 a. Concentrated between 38 and 46. b. Shape of distribution is slightly skewed left. Ratings have an upper limit but stretch out to the low side. c. Class 1 2 3 4 5 6 7 8 34 < x ≤ 36, 36 < x ≤ 38, 38 < x ≤ 40, 40 < x ≤ 42, 42 < x ≤ 44, 44 < x ≤ 46, 46 < x ≤ 48, more d. Class 1 2 3 4 5 6 7 8 Cum Freq 1 4 13 25 45 61 65 65 LO3 2.22 a. Concentrated between 3.5 and 5.5. b. Shape of distribution is slightly skewed right. Waiting time has a lower limit of 0 and stretch out to the high side where there are a few people who have to wait longer. c. The class length is 1. d. Class Cum Frequency -0.5< 0 .5 1 0.5< 1.5 5 1.5< 2.5 12 2.5< 3.5 20 3.5< 4.5 37 4.5< 5.5 53 5.5< 6.5 67 6.5< 7.5 79 7.5< 8.5 87 8.5< 9.5 93 9.5<10.5 97 10.5<11.5 99 11.5<12.5 100 LO3 2.23 a. Concentrated between 48 and 53. b. Shape of distribution is symmetric and bell shaped. c. Class length is 1. d. Class: 46<47 47<48 48<49 49<50 50<51 51<52 52<53 53<54 54<55 Cum Freq. 2.5% 5.0% 15.0% 35.0% 60.0% 80.0% 90.0% 97.5% 100.0% 2.38 a. Distribution...
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...Chapter 1 Taxes and Taxing Jurisdictions Questions and Problems for Discussion 1. Tax payments differ from government fines and penalties because they are not intended to deter or punish unacceptable behavior. Tax payments differ from fees or user charges because they do not entitle the payer to a specific government good or service, such as a postage stamp or a driver’s license. Tax payments also differ from fees or user charges because they are compulsory. 2. This payment has characteristics of a tax, a penalty, and a user fee. The compulsory payment is not specifically punitive but does apply selectively to those companies most likely responsible for the polluted condition of Green River. However, these same companies may be the entities that benefit most from the environmental clean-up. 3. This payment more closely resembles a fee for a government service than a transaction-based tax because the transaction occurs between a private party and the jurisdiction itself, rather than between private parties engaging in a market transaction. The payment also entitles the payer to a specific benefit (the right to marry under law). 4. To the extent that the decline in exterior maintenance reduces the value of Mr. P’s apartment complex, he bears the incidence of the increased property tax. To the extent that the decline reduces the value of adjoining properties or makes the neighborhood less attractive, the owners of the adjoining properties and the neighborhood residents...
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...Chapter 1 Environment and Theoretical Structure of Financial Accounting AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools, departments, and faculty may approach assessment and its documentation differently, one approach is to provide specific questions on exams that become the basis for assessment. To aid faculty in this endeavor, we have labeled each question, exercise and problem in Intermediate Accounting, 7e with the following AACSB learning skills: Questions 1–1 1–2 1–3 1–4 1–5 1–6 1–7 1–8 1–9 1–10 1–11 1–12 1–13 1–14 1–15 1–16 1–17 1–18 1–19 1–20 1–21 1–22 1–23 1–24 1–25 1–26 1–27 1–28 1–29 AACSB Tags Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking 1–30 1–31 1–32 Reflective thinking Reflective thinking Reflective thinking Brief Exercises 1–1 1–2 1–3 1–4 1–5 1–6 AACSB Tags Analytic Reflective thinking Reflective thinking Reflective thinking...
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...Solutions Manual Fundamentals of Corporate Finance (Asia Global Edition) Ross, Westerfield, Jordan, Lim and Tan Updated April 2012 CHAPTER 1 INTRODUCTION TO CORPORATE FINANCE Answers to Concepts Review and Critical Thinking Questions 1. Capital budgeting (deciding whether to expand a manufacturing plant), capital structure (deciding whether to issue new equity and use the proceeds to retire outstanding debt), and working capital management (modifying the firm’s credit collection policy with its customers). Disadvantages: unlimited liability, limited life, difficulty in transferring ownership, hard to raise capital funds. Some advantages: simpler, less regulation, the owners are also the managers, sometimes personal tax rates are better than corporate tax rates. The primary disadvantage of the corporate form is the double taxation to shareholders of distributed earnings and dividends. Some advantages include: limited liability, ease of transferability, ability to raise capital, and unlimited life. The treasurer’s office and the controller’s office are the two primary organizational groups that report directly to the chief financial officer. The controller’s office handles cost and financial accounting, tax management, and management information systems, while the treasurer’s office is responsible for cash and credit management, capital budgeting, and financial planning. Therefore, the study of corporate finance is concentrated within the treasury group’s functions. To maximize...
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...Chapter 1 The Government and Not-For-Profit Environment ------------------------------------------------- Questions for Review and Discussion 1. The critical distinction between for-profit businesses and not-for-profits including governments is that businesses have profit as their main motive whereas the others have service. A primary purpose of financial reporting is to report on an entity’s accomplishments — how well it achieved its objectives. Accordingly, the financial statements of businesses measure profitability, their key objective. Financial reports of governments and other not-for-profits should not focus on profitability, since it is not a relevant objective. Ideally, therefore, they should focus on other performance objectives, such as how well the organizations met their service goals. In reality, however, the goal of reporting on how well they have achieved such goals has proven difficult to attain and the financial reports have focused mainly on financially-related data. 2. Governments and not-for-profits are “governed” by the budget, whereas businesses are governed by the marketplace. The budget is the key political and fiscal document of governments and not-for-profits. It determines how an entity obtains its resources and how it allocates them. It encapsulates most key decisions of consequence made by the organization. In a government the budget is not merely a managerial document; it is the law. 3. Owing to the significance of the budget...
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...Exercise 1 Chapter 7 GDP: Measuring Total Production and Income 7.1 Gross Domestic Product Measures Total Production 1) In May 2009, Ford Motor Company's sales were down 20 percent from a year earlier. These events were caused by A) an economic recession. B) an economic expansion. C) a reduction in advertising. D) declining quality of service. Answer: A Diff: 2 Page Ref: 613/209 Topic: The Business Cycle Objective: LO1: Explain how total production is measured. Special Feature: Chapter Opener: Ford Motor Company Feels the Effects of the Recession 2) During a business cycle expansion, total production ________ and total employment ________. A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases Answer: A Comment: Recurring Diff: 1 Page Ref: 617/213 Topic: The Business Cycle Objective: LO1: Explain how total production is measured. AACSB: Reflective Thinking Special Feature: None 3) Macroeconomics, as opposed to microeconomics, includes the study of what determines the A) average price levels of goods and services in the economy. B) price charged for laptop computers by Dell. C) wages paid to employees by Dell. D) quantity of Dell employees. Answer: A Comment: Recurring Diff: 1 Page Ref: 614/210 Topic: Macroeconomics vs. Microeconomics Objective: LO1: Explain how total production is measured. AACSB: Reflective...
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