At a location in the Philippines, the Earth's magnetic field has a value of $39.0 \mu \mathrm{T}$ and is horizontal and due north. The net field is zero $8.13 \mathrm{~cm}$ above a long, straight, horizontal wire that carries a steady current. (a) Calculate the current and (b) find its direction.

Harley-Davidson Inc. manufactures motorcycles. During the years following 2003 (the company's $100^{th}$ anniversary), the company's net revenue can be approximated by 4.6+0.4t billion dollars per year, where t is time in years since January 1, 2003. Assume this rate holds through January 1, 2014, and assume a continuous interest rate of 3.5% per year. What is the future value, on January 1, 2013, of net revenue for the preceding 10 years?

In 2014, Fogg, Inc., issued $10 par value common stock for$25 per share. No other common stock transactions occurred until March 31, 2016, when Fogg acquired some of the issued shares for $20 per share and retired them. Which of the following statements correctly states an effect of this acquisition and retirement? a. 2016 net income is decreased. b. Additional paid-in capital is decreased. c. 2016 net income is increased. d. Retained earnings is increased.

Ding Bell Imports requires a return of 15% on all projects. If Ding is planning an overseas development project with these cash flows, what is the project's net present value?

$$\begin{matrix} \text{Year} & \text{1} & \text{2} & \text{3} & \text{4} & \text{5} & \text{6} & \text{7}\\\text{Net Cash (\$)} & \text{-60,000} & \text{-110,000} & \text{20,000} & \text{40,000} & \text{80,000} & \text{100,000} & \text{60,000}\\ \end{matrix}$$

Tuscan Inc. had a retained earnings balance of $60,000 at December 31, 2018. During the year, Tuscan had the following selected transactions. Calculate the retained earnings balance at December 31, 2019.

• Reported net income of$100,000.
• Revised an estimate of a machine's salvage value. Depreciation increased by $1,000 per year.
• An error was discovered. Three years ago, a purchase of a building was incorrectly expensed. The effect is understated retained earnings of$12,000 (net of tax benefit).
• Paid cash dividends of $33,000.

Hershey Foods Inc. is the largest US producer of chocolate. During $2002$ and $2003$, Hershey generated a net profit at a rate approximated by $54.0 t+403.58$ million dollars per year, where $t$ is the time in years since January $1$, $2002$. ${ }^3$ Assume this rate continues through the year $2007$ and that the interest rate is $2 \%$ per year compounded continuously. Find the value, on January $1$, $2007$, of Hershey's net profit from January $1$, $2002$ to January $1,2007$.

Use the following information from Manuscript Company’s financial records to determine net cash flows from financing activities.

Repaid principal on bank loan                                $ 16,500
Issued common stock, at par value                              32,000
Declared dividends, to be paid to shareholders next year        9,000

Certified Underwriters received a commission of $780,000 on 1.2 million shares of Molded Plastics Company stock. Certified Underwriters charges 7.5% commission. Assuming no other expenses, find the value of the stock offering, the price per share of Molded Plastics Company stock, and the net proceeds.

Find the net present value of the following cash flows, which can be purchased by an initial investment of $7000.

$$\begin{array}{cc} \text { Year } & \text { Cash Flow } \\ \hline 2 & \$ 3400 \\ 4 & 3500 \end{array}$$

Assume that interest is at 7% compounded semiannually.

At December 31, 2015, Albrecht Corporation had outstanding 373,000 shares of common stock and 8,000 shares of 9.5%, $100 par value cumulative, nonconvertible preferred stock. On May 31, 2016, Albrecht sold for cash 12,000 shares of its common stock. No cash dividends were declared for 2016. For the year ended December 31, 2016, Albrecht reported a net loss of$114,000. Required: Calculate Albrecht’s net loss per share for the year ended December 31, 2016.

Clinton Company is evaluating the purchase of equipment from two vendors. Differences in the technology and labor requirements to operate the equipment of each vendor affect the projected net cash flows. The equipment purchased from Abbott Industries would cost $97,250.00 and is projected to generate total net cash flows of$168,000.00. The equipment from Costello Manufacturing would cost $135,200.00 and is projected to generate net cash flows totaling$235,000.00. The net cash flows for each year follow.

$$\begin{array}{ccc}\text { Year } & \text { Abbott Industries } & \text { Costello Manufacturing } \\ 1 & \$ 30,000.00 & \$ 10,000.00 \\ 2 & 28,000.00 & 20,000.00 \\ 3 & 26,000.00 & 30,000.00 \\ 4 & 24,000.00 & 40,000.00 \\ 5 & 22,000.00 & 50,000.00 \\ 6 & 20,000.00 & 60,000.00 \\ 7 & 18,000.00 & 25,000.00\end{array}$$

Instructions:

1. Assuming that Clinton Company wants to earn a 12% rate of return, calculate the net present value of each equipment purchase.

2. Would you purchase the equipment and, if so, from which vendor?

You need to know if the building of a new warehouse is justified under the following conditions: The proposal is for a warehouse costing $\$ 100,000$. The warehouse has an expected useful life of $35$ years and a net salvage value (net proceeds from sale after tax adjustments) of $\$ 25,000$. Annual receipts of $\$ 17,000$ are expected. annual maintenance and administrative costs will be $\$ 4.000$, and annual income taxes are $\$ 2.000$.

Given these data, which of the following statements is (are) correct?

(a) The proposal is justified for a MARR of $9 \%$.

(b) The proposal has a net present worth of $\$ 62.730 .50$ when $6 \%$ is used as the interest rate.

(c) The proposal is acceptable as long as the MARR $\leq 10.77 \%$.

(d) All of the above are correct.

Harding Financial Services Company holds a large portfolio of debt and stock securities as an investment. The total fair value of the portfolio at December 31, 2017, is greater than total cost. Some securities have increased in value and others have decreased. Ann Bales, the fi nancial vice president, and Kim Reeble, the controller, are in the process of classifying for the first time the securities in the portfolio.

Bales suggests classifying the securities that have increased in value as trading securities in order to increase net income for the year. She wants to classify the securities that have decreased in value as long-term available-for-sale securities, so that the decreases in value will not affect 2017 net income.

Reeble disagrees. She recommends classifying the securities that have decreased in value as trading securities and those that have increased in value as long-term available-for-sale securities. Reeble argues that the company is having a good earnings year and that recognizing the losses now will help to smooth income for this year. Moreover, for future years, when the company may not be as profitable, the company will have built-in gains.

Instructions (a) Will classifying the securities as Bales and Reeble suggest actually affect earnings as each says it will?

AI Tool and Dye issued $8 \%$ bonds with a face amount of $\$ 160$ million on January 1, 2018. The bonds sold for $\$ 150$ million. For bonds of similar risk and maturity the market yield was $9 \%$. Upon issuance, AI elected the option to report these bonds at their fair value. On June 30,2018 , the fair value of the bonds was $\$ 145$ million as determined by their market value on the NASDAQ. Will AI report a gain or will it report a loss when adjusting the bonds to fair value? If the change in fair value is attributable to a change in the interest rate, did the rate increase or decrease? Will the gain or loss be reported in net income or as $\mathrm{OCI}$ ?