A firm has drawn up plans to expand its business and hire more people. The company's management then sees the leading economic index indicates the economy could slow down. How do you think the firm's plans might change?

Sandcastles, Inc.’s management has recently been looking at a proposal to purchase a new brick molding machine. With the new machine, the company would not have to buy bricks. The estimated useful life of the machine is 15 years, and the purchase price, including all setup charges, is $400,000. The residual value is estimated to be$40,000. The net addition to the company’s cash inflow as a result of the savings from making the bricks is estimated to be $70,000 a year. Sandcastle’s management has decided on a minimum rate of return of 14 percent. Using the net present value method to evaluate this capital investment, determine whether the company should purchase the machine. Support your answer.

A change of state is a ________ change.

A schedule of the cost of finished goods manufactured is a helpful tool in determining the per-unit cost of manufactured products. Explain several ways in which information about per-unit manufacturing costs is used by (a) management accountants and (b) financial accountants.

In a company there are 7 executives: 4 women and 3 men. Three are selected to attend a management seminar. Find these probabilities.

a. All 3 selected will be women. b. All 3 selected will be men. c. 2 men and 1 woman will be selected. d. 1 man and 2 women will be selected.

Find the amount of change and the percent of change.

The management at a factory has determined that the rate of change of the number of units $N$ that a new employee can produce per day after having worked $t$ days is proportional to $N-30$. After 0 days on the job, the employee produces 0 units and after 15 days on the job, the employee produces 15 units.

According to your model, how many days pass before the employee produces 25 units per day?

Let f(t) denote the amount of capital invested by a certain business firm at time t. The rate of change of invested capital, $f^{\prime}(t)$, is sometimes called the rate of net investment. The management of the firm decides that the optimum level of investment should be C dollars and that, at any time, the rate of net investment should be proportional to the difference between C and the total capital invested. Construct a differential equation that describes this situation.

Devon Turner, who has been playing shortstop for the St. Louis Titans for five years, made the All-Star team in 2014. He has three years left on a contract that pays him $2.4 million a year. He wants to renegotiate his contract because other players with records similar to his are receiving as much as$10.5 million per year for five years.

Titans’ management has a policy of never renegotiating a current contract but is willing to consider extending Turner’s contract to additional years. In fact, the Titans have offered Turner an additional three years at $6.0 million,$9.0 million, and $12.0 million, respectively. They have also added an option year at$15.0 million. Management points out that this package is worth $42.0 million, or$10.5 million per year on average. Turner is considering this offer and is also thinking of asking for a bonus if and when he signs the contract.

Write a memorandum to Turner that comments on management’s position and evaluates the offer, assuming a current interest rate of 10 percent. (Hint: Use present values.) Propose a range for the signing bonus. Finally, include other considerations that may affect the value of the offer.

Dumars Corporation reports in the current liability section of its balance sheet at December 31, 2017 (its year-end), short-term obligations of $15,000,000, which includes the current portion of 12% long-term debt in the amount of$10,000,000 (matures in March 2018). Management has stated its intention to refinance the 12% debt whereby no portion of it will mature during 2018. The date of issuance of the financial statements is March 25, 2018.

Instructions

• a. Is management’s intent enough to support long-term classification of the obligation in this situation?
• b. Assume that Dumars Corporation issues $13,000,000 of 10-year debentures to the public in January 2018 and that management intends to use the proceeds to liquidate the$10,000,000 debt maturing in March 2018. Furthermore, assume that the debt maturing in March 2018 is paid from these proceeds prior to the issuance of the financial statements. Will this have any impact on the balance sheet classification at December 31, 2017? Explain your answer.
• c. Assume that Dumars Corporation issues common stock to the public in January and that management intends to entirely liquidate the $10,000,000 debt maturing in March 2018 with the proceeds of this equity securities issue. In light of these events, should the$10,000,000 debt maturing in March 2018 be included in current liabilities at December 31, 2017?
• d. Assume that Dumars Corporation, on February 15, 2018, entered into a financing agreement with a commercial bank that permits Dumars Corporation to borrow at any time through 2019 up to $15,000,000 at the bank’s prime rate of interest. Borrowings under the financing agreement mature three years after the date of the loan. The agreement is not cancelable except for violation of a provision with which compliance is objectively determinable. No violation of any provision exists at the date of issuance of the financial statements. Assume further that the current portion of long-term debt does not mature until August 2018. In addition, management intends to refinance the$10,000,000 obligation under the terms of the financial agreement with the bank, which is expected to be financially capable of honoring the agreement. (1) Given these facts, should the $10,000,000 be classified as current on the balance sheet at December 31, 2017? (2) Is disclosure of the refinancing method required?

Assume a company in which you own stock has attracted two takeover offers. Would it ever make sense for your company’s management to favor the lower offer? Does the form of payment affect your answer at all?

In anticipation of declining inventory replacement costs, the management of Computer Products Co. elects to use the FIFO inventory method rather than LIFO. Explain how this decision should affect the company's future:
b. Net cash flow from operating activities.

"Myrtle Air Express decided to offer direct service from Cleveland to Myrtle Beach. Management must decide between a full-price service using the company’s new fleet of jet aircraft and a discount service using smaller-capacity commuter planes. It is clear that the best choice depends on the market reaction to the service Myrtle Air offers. Management developed estimates of the contribution to profit for each type of service based on two possible levels of demand for service to Myrtle Beach: strong and weak. The following table shows the estimated quarterly profits (in thousands of dollars):

$$\begin{aligned} &\text { Demand for Service }\\ &\begin{array}{lcr} \text { Service } & \text { Strong } & \text { Weak } \\ \text { Full Price } & \$ 960 & -\$ 490 \\ \text { Discount } & \$ 670 & \$ 320 \end{array} \end{aligned}$$

Suppose that management of Myrtle Air Express believes that the probability of strong demand is 0.7 and the probability of weak demand is 0.3. Use the expected value approach to determine an optimal decision."

After the wound nurse obtains a set of wound cultures, you watch as she packs the wound with gauze. The wound nurse charts the findings and makes formal recommendations for management of the wound to the primary care provider.
What wound documentation is necessary at this time?