1. On January 2, 2017, DavidCorporation paid $1,200,000 for Buster Company in a transactionproperly accounting for as an asset acquisition. The book valuesand fair values of Buster Company’s net assets on January 2, 2017were as follows:

BookValue               Fair Value

AccountReceivable                        400,000                  350,000

Inventory                                             50,000                    65,000

Plant andEquipment                       250,000                  450,000

AccountsPayable                             40,000                        50,000

MortgagePayable                              150,000                  150,000

                                                              510,000                   665,000

A. What will be the goodwill recorded from the abovetransaction? Show your calculation.

B. If David Corporation’s Accounts Receivable balanceimmediately prior to the acquisition was $500,000. What will DavidCorporation’s Accounts Receivable balance be immediately after theabove acquisition? Show your calculation.

2. To determine whether goodwill impairment exists, U.S. GAAPrequires a two-step process (complete the statements):

Step 1 – Compares F.V. (fair value) ofthe Reporting Unit to _____________________________.

Step 2 – If necessary, first comparesthe F.V. of the Reporting Unit to _____________________.

3. If goodwill impairment is determined to exist, the entry torecord the impairment is as follows:

                                                                                                           Debit     Credit

Goodwill                                                                                      $xxx

                 Impairment Loss -Goodwill                                           $xxx

A. True

B. False

Explain your answer:

 

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1. Public utilities are examples of sociotechnical systems. How are the heuristics discussed in this chapter reflected in the regulation, design, and operation of a local utility system?

2. Apply the four who’s to a sociotechnical system familiar to you. Examples: the Internet, air travel, communication satellites, a social service.

 

 

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1: Prove that the problem of finding a Hamilton cycle in a directed graph is  NP-complete, using the NP-completeness of the Hamilton-cycle problem for undirected graphs.

2. Suppose that two problems are known to be NP-complete. Does this imply that there is a polynomial-time reduction from one to the other, if P INP?

 

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1.  Prove that the linear transformation represented by the matrix M is rigid if and only if MT = M−1.

2.  Show that the linear transformation represented by the matrix M is orientation-preserving if and only if det (M) > 0.[

3.  Figure II.9 shows an affine transformation acting on an F.

(a) Is this a linear transformation? Why or why not?

(b) Give a 3 × 3 matrix that represents the affine transformation.

 

 

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1. Produce a projected capital budgeting cash flows statement for Sneaker 2013 project by answering the following:
a. What is the project’s initial (year 0) investment outlay? b. What are the project’s annual (year 2013-2018) net operating cash flows? c. What is the project’s terminal (2018) non-operating net cash flow? d. Does Sneaker 2013 appear viable from a quantitative standpoint? (To answer this question, estimate the project’s payback, net present value, and internal rate of return)
2. Produce a projected capital budgeting cash flow statement for Persistence project by answering the following:
a. What is the project’s initial (year 0) investment outlay? b. What are the project’s annual (year 2013-2018) net operating cash flows? c. What is the project’s terminal (2018) non-operating net cash flow? d. Does Persistence appear attractive from a quantitative standpoint? (To answer this question, estimate the project’s payback, net present value, and internal rate of return)
3. Between the two projects, which project do you think is more risky? How do you think you should incorporate differences in risk in your analysis?
4. Based on the calculated payback period, net present value (NPV) and internal rate of return (IRR) for each project, which project looks better for New Balance shareholders? Why?
5. Should Rodriguez be more critical or less critical of cash flow forecasts for Persistence than of cash flow forecasts for Sneaker 2013? Why?
6. What is your final recommendation to Rodriguez?

 

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