In 2015 Kraft Foods Group Inc., merged with H.J. Heinz Co. to form the world's fifth-largest food and beverage company. Heinz is a global brand, famous for its tomato ketchup, sauces, soups, beans, pasta and infant foods. Kraft is one of North America's largest consumer packaged food and beverage companies, with annual sales revenues of more than $\$ 18$ billion and over 22000 employees in the USA. Examine the possible reasons for the merger between Kraft and Heinz.

Zhao Co. has fixed costs of $354,000. Its single product sells for$175 per unit, and variable costs are $116 per unit. Compute the level of sales in units needed to produce a target (pretax) income of$118,000.

Do you think the company’s reaction to reports of hazardous ingredients hurt its reputation for honesty and ethical behavior? Do you think the company’s missteps caused Unilever to shy away from acquiring the company? Or, do you take the stance that Alba’s entertainment background played a part in the press going after the company? If you were an advisor to the new CEO, what suggestions would you give him for getting the company back on track, especially when it comes to corporate social responsibility?

Armstrong's Candies has monthly fixed costs of $\$ 4800$ and average variable costs of $\$ 1.50$. Demand for its candies is 4000 units each month. The average unit price is $\$ 4$. Distinguish between internal and external economies of scale.

True or false. Notes receivable are classified as current liabilities regardless of the time to maturity.

Keesha Co. borrows $200,000 cash on November 1 of the current year by signing a 90-day, 9%,$200,000 note.

1. On what date does this note mature?

2. How much interest expense is recorded in the current year? (Assume a 360-day year.)

3. How much interest expense is recorded in the following year? (Assume a 360-day year.)

4. Prepare journal entries to record (a) issuance of the note,(b) accrual or interest on December 31, and (c) payment of the note at maturity.

The $40 million lottery prize that you have just won actually pays out$2 million a year for 20 years. The interest rate is 8%.
b. What is the present value if the first payment comes immediately?

The $40 million lottery prize that you have just won actually pays out$2 million a year for 20 years. The interest rate is 8%.
a. If the first payment comes after 1 year, what is the present value of your winnings?

You are considering whether to buy or lease a machine whose purchase price is $\$ 12,000$. Taxes on the machine will be $\$ 580$ due in one year, $\$ 464$ due in two years, and $\$ 290$ due in three years. If you buy the machine, you expect to be able to sell it after three years for $\$ 5,000$. If you lease the machine for three years, you make an initial payment of $\$ 2650$ and then three payments of $\$ 2650$ at the end of each of the next three years. The leasing company will pay the taxes. The interest rate is $7.75 \%$ per year, compounded annually. Should you buy or lease the machine? Explain.

You have purchased one lottery ticket each week for many months and have not won more than $5.00. You decide, based on your past experience, that you are not going to win the grand prize and so you stop playing the lottery. What type of reasoning did you use? Explain.

Classify the following adjusting entries as involving prepaid expenses (PE), unearned revenues (UR), accrued expenses (AE), or accrued revenues (AR).

a. ______ To record revenue earned that was previously received as cash in advance. b. ______ To record wages expense incurred but not yet paid (nor recorded). c. ______ To record revenue earned but not yet billed (nor recorded). d. ______ To record expiration of prepaid insurance. e. ______ To record annual depreciation expense.

Determine the size of your investment account 30 years from now (when you plan to retire) if you deposit $12,000 each year, beginning 1 year from now, and the account earns interest at a rate of 10% per year.

You want to buy a new car, but you can make an initial payment for only $2,000 and can afford monthly payments of at most$400. a. If the APR on auto loans is 12% and you finance the purchase over 48 months, what is the maximum price you can pay for the car? b. How much can you afford if you finance the purchase over the 60 months?

Buying and selling stock over the Internet has become a common way of playing the stock market. Why can this be risky for small investors?