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Two different companies of approximately similar financial strength and with similar management teams both have 30 year bonds that trade in active secondary markets. Company A is located in a country with relatively small increases in overall price levels; its bonds have a 4% return. Company B is located in a country with relatively large increases in overall price levels each year; its bonds have a 14% return.

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Two different companies of approximately similar financial strength and with similar management teams both have 30 year bonds that trade in active secondary markets. Company A is located in a country with relatively small increases in overall price levels; its bonds have a 4% return. Company B is located in a country with relatively large increases in overall price levels each year; its bonds have a 14% return.

What is the difference in the interest rate between Company A bonds and Company B bonds called?

Describe the capital budgeting process and explain the meaning of a positive versus a negative NPV. What opinions might shareholders have on selecting projects using the NPV? Explain. What might happen to a management team that persistently selects negative NPV projects? Explain.

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Describe the capital budgeting process and explain the meaning of a positive versus a negative NPV. What opinions might shareholders have on selecting projects using the NPV? Explain. What might happen to a management team that persistently selects negative NPV projects? Explain.

A CPA firm has three divisions: Audit, Tax, and Business Consulting. When the specifications for the new computer system were established, the audit division needed 50% of the capacity, the tax division required 30%, and business consulting required 20%. The managers agreed that the fixed costs of the computer department would be allocated based on these percentages. The variable costs of the computer department are allocated based on the minutes of computer time that each department uses. The computer department budget for fixed costs is $650,000, and the budget for variable costs is $147,000. The company anticipates using 420,000 minutes of computer time.

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Comments Off on A CPA firm has three divisions: Audit, Tax, and Business Consulting. When the specifications for the new computer system were established, the audit division needed 50% of the capacity, the tax division required 30%, and business consulting required 20%. The managers agreed that the fixed costs of the computer department would be allocated based on these percentages. The variable costs of the computer department are allocated based on the minutes of computer time that each department uses. The computer department budget for fixed costs is $650,000, and the budget for variable costs is $147,000. The company anticipates using 420,000 minutes of computer time.

A CPA firm has three divisions: Audit, Tax, and Business Consulting. When the specifications for the new computer system were established, the audit division needed 50% of the capacity, the tax division required 30%, and business consulting required 20%. The managers agreed that the fixed costs of the computer department would be allocated based on these percentages. The variable costs of the computer department are allocated based on the minutes of computer time that each department uses. The computer department budget for fixed costs is $650,000, and the budget for variable costs is $147,000. The company anticipates using 420,000 minutes of computer time.

What amount of variable costs will be allocated when a division uses a minute of computer time?

A key goal of tax planning is to legally minimize or defer taxes. This is done by focusing on key components of taxable income. How can timing strategies and income shifting strategies be used to affect deductions for adjusted gross income (AGI), dependency exemptions, itemized deductions, and tax credits? Provide at least one example for each.

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A key goal of tax planning is to legally minimize or defer taxes. This is done by focusing on key components of taxable income. How can timing strategies and income shifting strategies be used to affect deductions for adjusted gross income (AGI), dependency exemptions, itemized deductions, and tax credits? Provide at least one example for each.

Discuss budgeting techniques. Is a top down or bottom up approach preferred and why? What is a flexible budget versus a static budget? What is a spending variance and a activity variance? Are variances necessarily bad?

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Comments Off on Discuss budgeting techniques. Is a top down or bottom up approach preferred and why? What is a flexible budget versus a static budget? What is a spending variance and a activity variance? Are variances necessarily bad?

Discuss budgeting techniques. Is a top down or bottom up approach preferred and why? What is a flexible budget versus a static budget? What is a spending variance and a activity variance? Are variances necessarily bad?

How can a budget affect company morale? How could the budgetary process be made more beneficial to avoid any negative impact a budgetary concept can portray?

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1. How can a budget affect company morale? How could the budgetary process be made more beneficial to avoid any negative impact a budgetary concept can portray?

2. How does contribution margin differ from controllable margin in a responsibility report for a profit center? How do controllable costs and non controllable costs impact a manager s budget and decision making process?