Generally Accepted Accounting Principles Essay Example for Free

Generally Accepted Accounting Principles Essay 11. a. Year 0 Year 1 Year 2 Year 3 Year 4 Before-tax cash flow $(500,000) $52,500 $47,500 $35,500 $530,500 Tax cost (7,875) (7,125) (5,325) (4,575) After-tax cash flow 44,625 40,375 30,175 525,925 Discount factor (7%) .935 .873 .816 .763 Present value $(500,000) $41,724 $35,247 $24,623 $401,281 NPV $2,875 Investor W should make the investment because NPV is positive. b. Year 0 Year 1 Year 2 Year 3 Year 4 Before-tax cash flow $(500,000) $52,500 $47,500 $35,500 $530,500 Tax cost (10,500) (9,500) (7,100) (6,100) After-tax cash flow 42,000 38,000 28,400 524,400 Discount factor (7%) .935 .873 .816 .763 Present value $(500,000) $39,270 $33,174 $23,174 $400,117 NPV $(4,265) Investor W should not make the investment because NPV is negative. c. Year 0 Year 1 Year 2 Year 3 Year 4 Before-tax cash flow $(500,000) $52,500 $47,500 $35,500 $530,500 Tax cost (5,250) (4,750) (8,875) (7,625) After-tax cash flow 47,250 42,750 26,625 522,875 Discount factor (7%) .935 .873 .816 .763 Present value $(500,000) $44,179 $37,321 $21,726 $398,954 NPV $2,180 Investor W should make the investment because NPV is positive. 16. a. Opportunity 1: Year 0 Year 1 Year 2 Taxable income (loss) $(8,000) $5,000 $20,000 Marginal tax rate .40 .40 .40 Tax $(3,200) $2,000 $8,000 Before-tax cash flow $(8,000) $5,000 $20,000 Tax (cost) or savings 3,200(2,000) (8,000) Net cash flow $(4,800) $3,000 $12,000 Discount factor (12%) .893 .797 Present value $(4,800) $2,679 $9,564 NPV $7,443 Opportunity 2: Year 0 Year 1 Year 2 Taxable income $5,000 $5,000 $5,000 Marginal tax rate .40 .40 .40 Tax $2,000 $2,000 $2,000 Before-tax cash flow $5,000 $5,000 $5,000 Tax (cost) or savings (2,000) (2,000) (2,000) Net cash flow $3,000 $3,000 $3,000 Discount factor (12%) .893 .797 Present value $3,050 $2,679 $2,391 NPV $8,120 Firm E should choose opportunity 2. b. Opportunity 1: Year 0 Year 1 Year 2 Taxable income (loss) $(8,000) $5,000 $20,000 Marginal tax rate .15 .15 .15 Tax $(1,200) $750 $3,000 Before-tax cash flow $(8,000) $5,000 $20,000 Tax (cost) or savings 1,200 (750) (3,000) Net cash flow $(6,800) $4,250 $17,000 Discount factor (12%) .893 .797 Present value $(6,800) $3,795 $13,549 NPV $10,544 Opportunity 2: Year 0 Year 1 Year 2 Taxable income $5,000 $5,000 $5,000 Marginal tax rate .15 .15 .15 Tax $750 $750 $750 Before-tax cash flow $5,000 $5,000 $5,000 Tax (cost) or savings (750) (750) (750) Net cash flow $4,250 $4,250 $4,250 Discount factor (12%) .893 .797 Present value $4,250 $3,795 $3,387 NPV $11,432 Firm E should choose opportunity 2. c. Opportunity 1: Year 0 Year 1 Year 2 Taxable income (loss) $(8,000) $5,000 $20,000 Marginal tax rate .40 .15 .15 Tax $(3,200) $750 $3,000 Before-tax cash flow $(8,000) $5,000 $20,000 Tax (cost) or savings 3,200 (750) (3,000) Net cash flow $(4,800) $4,250 $17,000 Discount factor (12%) .893 .797 Present value $(4,800) $3,795 $13,549 NPV $12,544 Opportunity 2: Year 0 Year 1 Year 2 Taxable income $5,000 $5,000 $5,000 Marginal tax rate .40 .15 .15 Tax $2,000 $750 $750 Before-tax cash flow $5,000 $5,000 $5,000 Tax (cost) or savings (2,000) (750) (750) Net cash flow $3,000 $4,250 $4,250 Discount factor (12%) .893 .797 Present value $3,000 $3,795 $3,387 NPV $10,182 Firm E should choose opportunity 1. 1. a. (1) Year 0 Year 1 Year 2 Before-tax salary/income $80,000 $80,000 $80,000 Marginal tax rate .25 .40 .40 Tax on income $20,000 $32,000 $32,000 After-tax cash flow $60,000 $48,000 $48,000 Discount factor (8%) .926 .857 Present value $60,000 $44,448 $41,136 NPV of salary received by Mrs. X $145,584 (2) Before-tax payment /deduction $80,000 $80,000 $80,000 Marginal tax rate .34 .34 .34 Tax savings from deduction $27,200 $27,200 $27,200 After-tax cost $(52,800) $(52,800) $(52,800) Discount factor (8%) .926 .857 Present value $(52,800) $(48,893) $(45,250) NPV of salary cost to Firm B $(146,943) b. (1) Year 0 Year 1 Year 2 Before-tax salary/income $140,000 $50,000 $50,000 Marginal tax rate .25 .40 .40 Tax on income $35,000 $20,000 $20,000 After-tax cash flow $105,000 $30,000 $30,000 Discount factor (8%) .926 .857 Present value $105,000 $27,780 $25,710 NPV of salary received by Mrs. X $158,490 (2) Before-tax payment /deduction $140,000 $50,000 $50,000 Marginal tax rate .34 .34 .34 Tax savings from deduction $47,600 $17,000 $17,000 After-tax cost $(92,400) $(33,000) $(33,000) Discount factor (8%) .926 .857 Present value $(92,400) $(30,558) $(28,281) NPV of salary cost to Firm B $(151,239) c. Year 0 Year 1 Year 2 Before-tax payment /deduction $140,000 $45,000 $45,000 Marginal tax rate .34 .34 .34 Tax savings from deduction $47,600 $15,300 $15,300 After-tax cost $(92,400) $(29,700) $(29,700) Discount factor (8%) .926 .857 Present value $(92,400) $(27,502) $(25,423) NPV of salary cost to Firm B $(145,325) This proposal is superior (has less cost) to Firm B than its original offer. d. Year 0 Year 1 Year 2 Before-tax salary/income $140,000 $45,000 $45,000 Marginal tax rate .25 .40 .40 Tax on income $35,000 $18,000 $18,000 After-tax cash flow $105,000 $27,000 $27,000 Discount factor (8%) .926 .857 Present value $105,000 $25,002 $23,139 NPV of salary received by Mrs. X $153,141 Mrs. X should accept this counterproposal because it has a greater NPV than Firm B’s original offer.

Adolescents How Society Affects Them

As we all already know that adolescence is the developmental stage between childhood and adulthood, generally referring to a period ranging from age 11 and 19. Adolescence has many psychological and social stages, as well as biological. Because it is filled with constant changes and uncertainty, the risks of losing the sight of the right path is quite high. Let me talk about how and who affects them.As children grow, develop, and move into early adolescence, involvement with one's peers increases. In order to be included in a group of friends they are easily swayed to do something wrong.They are faced with decisions to try new things, such as drugs, changing fashion, slang words, alcohol, sex etc.   The use of drugs by teenagers is the result of a combination of factors such as peer pressure, curiosity, and availability (Cotterell, 135).   Peers are the ones who most frequently initiate one another into drug use.Family members are the most important source of peer pressure. I bel ieve family is the most influential foundation for several reasons. For one, peer pressure is encountered first at home. The mother and father play the biggest role in our lives because they teach their children right from wrong.For example, as a child my parents would always warn me about a girl whom I hung out with and lived in my neighborhood. They advised me a million times to not associate with her because they thought she was â€Å"bad news.†Similarly, religious institutions are another great source of influence. The young adults that participate in religious institutions, come from families which are not into drugs, alcohol, violence, or any sort of crime. So the effects these religious institutions have are great on young people in society.Religious adolescents can encourage one another to be successful in school, sports, and other activities. In my own past experiences when growing up, the people I have chosen as friends weren’t always the coolest, or craziest , but they were always good for their word. These types of friends are valuable for positive peer pressure and are important to keep.Friends, as it is seen, are a major source of peer pressure that one encounters when growing up. I believe from past experiences, friends have the strongest influence on us.   The effects from our friends can sometimes be really good or truly bad.If one friend brings the bottle to the hang out and tells another teen to try it because it is â€Å"so cool,† he or she will experiment with it not knowing what effects it can lead to. One of the reasons that our society finds it difficult to handle teen’s drug use is because adolescent culture does not consist of â€Å"one uniform, homogeneous group.† (Miller, 107).Teens and children are also having sex at a young age because most of their friends may be doing the same thing.   They want to fit in and be part of the â€Å"in-crowd† so they will not follow what they feel is rig ht and so they will take part in sexual behavior in order to be â€Å"cool.†Sex is just one issue that adolescents are faced with. Consumption of alcohol is another factor that can lead to bad decisions based on the friendships that they make.Choosing the friends one hangs out with can sometimes be difficult.   Even though we know what is right from wrong we still have the tendency to do the wrong thing.Even though there are a lot of negative effects from friend’s influences, there are just as many positive effects too. I believe the right friends can push one to doing the right things such as belonging to a soccer team or joining the band club.In conclusion, peer pressure is always surrounding us and affecting us. Our friends, family members, and religious institutions are the main sources in which peer pressure comes from.With the proper guidance and right choice of friends, one will not have any trouble with life’s difficult decisions, and will hopefully do the right thing when faced with difficult problems. Adolescence is a powerful time in one's life with an array of chances to ruin a bright future, so I guess forewarned is forearmed.ReferencesCotterell, John.   Social Networks and Social Influences in Adolescence.   New York:   Thomson.   1996.Miller, Michelle, Alberts, Jess, Hecht, Jess, and Robert Krizek.   Adolescent Relationships and Drug Use.   London: Lawrence Erlbaum Associates.   2000.National Institute on Alcohol Abuse & Alcoholism. Retrieved from http://www.niaaa.nih.gov

Containment Americas Plan to Curtail Communism

Containment was a foreign policy of the United States of America, introduced at the start of the Cold War, aimed at stopping the spread of Communism and keeping it contained and isolated within its current borders of the Union of Soviet Socialist Republics  (USSR or the Soviet Union) instead of spreading to a war-ravaged Europe. The United States feared specifically a domino effect, that the communism of the USSR would spread from one country to the next, destabilizing one nation which would, in turn, destabilize the next and allow for communist regimes to dominate the region. Their solution: cutting communist influence off at its source or enticing struggling nations with more funding than communist countries were providing. Although containment may have specifically been meant as a term to describe the U.S. strategy for the curtailment of communism from spreading outward from the Soviet Union, the idea of containment as a strategy for cutting off nations such as China and North Korea still persist to this day. The Cold War and Americas Counter-Plan for Communism The Cold War emerged after World War Two when nations formerly under Nazi rule ended up split between the conquests of the USSR (pretending to be liberators) and the newly freed states of France, Poland, and the rest of Nazi-occupied Europe. Since the United States had been a key ally in liberating western Europe, it found itself deeply involved in this newly divided continent: Eastern Europe wasnt being turned back into free states, but under the military and increasingly political control of the Soviet Union. Further, western European countries appeared to be wobbling in their democracies because of socialist agitation and collapsing economies, and the United States began to suspect that the Soviet Union was using communism as a means to make western democracy fail by destabilizing these countries and bringing them into the folds of communism. Even countries themselves were dividing in half over the ideas of how to move forward and recover from the last World War. This resulted in a lot of political and indeed military turmoil for the years to come, with such extremes as the  Berlin Wall  being established to separate East and West Germany due to the opposition to communism. The United States wanted to prevent this from spreading further Europe and on to the rest of the world, so they developed a solution called containment to attempt to manipulate the socio-political future of these recovering nations. The U.S. Involvement in Border States: Containment 101 The concept of containment was first outlined in George Kennans Long Telegram, which was sent to the U.S. Government from his position in the U.S. Embassy in Moscow. It arrived in Washington on February 22, 1946, and circulated widely around the White House until Kennan made it public in an article called The Sources of Soviet Conduct — this became known as X Article because the authorship was attributed to X. Containment was adopted by President Harry Truman as part of his Truman Doctrine in 1947, which redefined Americas foreign policy as one that supports the free people who are resisting attempted subjugation by armed minorities or outside pressures, according to Trumans speech to Congress that year. This came at the height of the Greek Civil War of 1946 - 1949 when much of the world was in conflict over which direction Greece and Turkey should and would go, and the United States agreed to help both equally to avoid the possibility that the Soviet Union could coerce these nations into communism. Acting deliberately, at times aggressively, to involve itself in the border states of the world, to keep them from turning communist, the United States spearheaded a movement that would eventually lead to the creation of NATO (North American Treaty Organization). These acts of arbitration could include sending funds, such as in 1947 when the CIA spent large amounts to influence the result of Italys elections helping the Christian Democrats defeat the Communist party, but it also could mean wars, leading to US involvement in Korea, Vietnam and elsewhere. As a policy, it has drawn a fair amount of praise and criticism. It can be seen to have directly affected the politics of many states, but it drew the west into supporting dictators and other people simply because they were enemies of communism, rather than by any broader sense of morality. Containment remained central to American foreign policy throughout the Cold War, officially ending with the fall of the Soviet Union in 1991.