Expert Answers

You want to have $75,000 in your savings account 12 years from now, and you're prepared to make equal annual deposits into the account at the end of each year. If the account pays 6.8 percent interest, what amount must you deposit each year?

You want to have $2 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is 10 percent and the inflation rate is 3.8 percent. What real amount must you deposit each year to achieve your goal?

You want to buy a new sports coupe for $83,500, and the finance office at the dealership has quoted you a 6.5 percent APR loan for 60 months to buy the car. What will your monthly payments be? What is the effective annual rate on this loan?

You want to borrow $250,000 for 1 year from your bank and are given the following 2 options:
1) Pay $35,000 per month for 12 months starting at the end of the 1st month.
2) Take a discount loan at the rate of 8% per year and pay the entire face value of the loan at the end of 12 months.

You’ve just read in The Wall Street Journal that the U.S. dollar has weakened relative to the euro. All else equal, what would you expect to happen to the quantity of Italian leather jackets sold in the United States? Why?

You’ve just joined the financial aid office at your school. The director gives you the following form and asks you to redesign it. The director says: We need this form to see whether parents have other students in college besides the one requesting aid. Parents are supposed to list all family members that the parents support—themselves, the person here, any other kids in college, and any younger dependent kids. Half of these forms are filled out incorrectly. Most people just list the student going here; they leave out everyone else. If something is missing, the computer sends out a letter and a second copy of this form. The whole process starts over. Sometimes we send this form back two or three times before it’s right. In the meantime, students’ financial aid is delayed—maybe for months. Sometimes things are so late that they can’t register for classes, or they have to pay tuition themselves and get reimbursed later.

If so many people are filling out the form wrong, the form itself must be the problem. See what you can do with it. But keep it to a page. As your instructor directs,

a. Analyze the current form and identify its problems.

b. Revise the form. Add necessary information; reorder information; change the chart to make it easier to fill out.

c. Write a memo to the director of financial aid pointing out the changes you made and why you made them.

Hints:

â–  Where are people supposed to send the form? What is the phone number of the financial aid office? Should they need to call the office if the form is clear?

â–  Does the definition of half-time apply to all students or just those taking courses beyond high school?

â–  Should capital or lowercase letters be used?

â–  Are the lines big enough to write in?

â–  What headings or subdivisions within the form would remind people to list all family members whom they support?

â–  How can you encourage people to return the formpromptly?

You’ve just completed a pilot run of 10 units of a major product and found the processing time for each unit was as follows:

Unit Number Time ( hours)

1........... 970

2........... 640

3........... 420

4........... 380

5........... 320

6........... 250

7........... 220

8........... 207

9........... 190

10........... 190

a. According to the pilot run, what would you estimate the learning rate to be?

b. Based on (a), how much time would it take for the next 190 units, assuming no loss of learning?

c. How much time would it take to make the 1,000th unit?

You’ve been hired as a staff accountant; one of your major duties will be processing expense reimbursements. Going through the files, you find this form memo:
Subject: Reimbursements
Enclosed are either receipts that we could not match with the items in your request for reimbursement or a list of items for which we found no receipts or both. Please be advised that the Accounting Department issues reimbursement checks only with full documentation. You cannot be reimbursed until you give us a receipt for each item for which you desire reimbursement. We must ask that you provide this information. This process may be easier if you use the Expense Report Form, which is available online.
Thank you for your attention to this matter. Please do not hesitate to contact us with questions.
You know this memo is horrible. Employees have to use the Expense Report Form; it is not optional. In addition to wordiness, a total lack of positive emphasis and you-attitude, and a vague subject line, the document design and organization of information bury the request. Create a new memo that could be sent to people who do not provide all the documentation they need in order to be reimbursed.

You’ve been asked by your boss to write a brief description of what the control activities should be that are a part of the development of a strong internal control system in your office. You know that the office is small in terms of personnel, which does create some control problems. So, your boss has also asked you to make some recommendations on ways to strengthen any weaknesses that you discover in the internal control system.

You sit on the board of directors of a major airline that just experienced a horrendous customer service event. A severe snowstorm stranded several of your planes and caused a ripple effect throughout your flight schedule, stranding thousands of passengers at airports across the country and keeping dozens of passengers as virtual hostages on planes for several hours as they waited for departure slots at their airport. The press has covered this fiasco at length and is already calling for a passenger bill of rights that will be based primarily on all the things your airline didn’t do to take care of its passengers in this situation. Your CEO is the founder of the airline, and he has been featured in many of your commercials raving about the high level of customer service you deliver. The board is meeting to review his continued employment with the company. Divide into two teams and argue the case for and against terminating his employment as a first step in restoring the reputation of your airline.