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Scenario:
A few years ago, the top executive of a large oil refining company (based in New York) was convicted of financial statement fraud. One of the issues in the case involved the way the company accounted for its oil inventories. In particular, the company would purchase crude oil from exploration companies and then process the oil into finished oil products, such as jet fuel, diesel fuel, and so forth. Because of the ready market for these finished products, the company would record its oil inventory at the selling prices of the finished products less the cost to refine the oil (instead of at cost) as soon as it purchased or discovered the crude oil. In addition to the fraud in the case, the type of accounting was questioned because it allowed the company to recognize profit before the actual sale (and even refining) of the oil. This method was even attested to by one of the large CPA firms.
Questions:
If you were the judge in this case, would you be critical of this accounting practice? Why or why not? Consider these questions and then post whether or not you believe this type of accounting practice should be criticized and whether or not this rather "aggressive" accounting was a warning signal that fraud might be occurring.
youve observed the following returns on crash-n-burn computers stock over the past five years 11 percent ?o11 percent
The first $4M will start today; at the end of 5 years, the hospital will also receive a lump sum payment of $18M. Assuming the cost of money is 3%, what is the value of this endowment in today's dollars?
xyz company has sales of 15450 costs of 4800 depreciation expense of 1900 and interest expense of 1250. if the tax rate
a bond yield with a face value of 1000 has a current yield of7 and a coupon rate of 8. what is the bonds price?a 6
What is the expected rate of return for this stock? Show the formula you would use to determine this.
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What will Ms. Browns cash flow be under the proposed capital structure of the firm? Assume that she keeps all 250 of her shares. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Suppose you win a lottery with a $1,000,000 prize. You can either take the prize as $50,000 per year for each of the next 20 years, or can take a lump sum today of $600,000. Assuming your discount rate is 10%, which option has greater present valu..
wells engineering issued preferred stock about two years ago. the present annual dividend is 2.70 and the required
hugh curtin borrowed 34000 on july 1 2012. this amount plus accrued interest at 9 compounded annually is to be repaid
Assuming that the S&P 500 had simply continued to earn the average return from (a),calculate the amount that $100 invested at the end of 1925 would have grown to by the end of 2008.
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