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We know that the rules for accounting change from time to time.  For example, the rules for revenue recognition changed recently.  A loan document might have a provision that starts like this: Changes in GAAP: If at any time any change in GAAP (Generally Accepted Accounting Principles) would affect the computation of any financial ratio or requirement set forth in any Loan Document […]   Required: 1. How would you finish this provision in the loan document?  Would you use the GAAP in force at the time the loan agreement was written or would you use the new GAAP, or somewhere inbetween? 2. If the way you finish this provision creates a cost to either the borrower or lender, who should bear the cost?  The change in GAAP will get the lender closer to, or further from, the ratio in the covenant.  Tracking financial statements with the original GAAP, as well as the new GAAP (for shareholders) will be costly.   3. Suppose it has been several years since the loan was made, and things have changed.  Maybe the borrower is in a stronger position now than the time of the loan.  Maybe the lender is in the stronger position now than the time of the loan.  Does a change in GAAP provide an opportunity for either the borrower or the lender to exercise their leverage to make substantive changes in the loan provisions — at least based on the way you finished the provision?

An investor begins a business with a $1,000 investment.  The company has these results for the first two years: Income of $150 in the first year Pays out no dividends in the first year. Income of $150 in the second year Pays out the entire cumulative income of $300 as dividends, and returns the original $1,000 investment. The discount rate for this investment is 10 percent.  The PV factors for 10% are:    Required: What are the abnormal earnings for year 1? What are the abnormal earnings for year 2, keeping in mind that the book value at the beginning of year 2 is the original investment ($1,000) plus the income from year 1 ($150) minus the dividends paid in year 1, (zero) [$1,000+$150-$0=$1,150]? What is the PV of the two years of abnormal earnings? The total cash in the firm at the end of the year 2 is $1,300. As of the initial investment, what is the present value of the $1,300? Now, for the accounting.  How is the present value of the $1,300 related to the present value of the abnormal earnings?

 Which of the following diagrams represents a homogeneous mixture?  

The office hours are listed in the syllabus and they are by appointment only.

As shown in the figure, a rectangular current loop is carrying current I = 3.0 A, in the direction shown, and is located near a long wire carrying a current Iw. The long wire is parallel to the sides of the rectangle. The rectangle loop has length 0.80 m and its sides are 0.10 m and 0.70 m from the wire, as shown. We measure that the net force on the rectangular loop as 4.9 × 10-6 N directed towards the wire.    (a) What is the magnitude of the current Iw?   [current] (b) In which direction does Iw flow: from top to bottom or from bottom to top in the sketch?  [direction]

A tetrahedron has an equilateral triangle base with 20-cm-long edges and three equilateral triangle sides. The base is parallel to the ground, and a vertical uniform electric field of strength 200 N/C passes upward through the tetrahedron.  (a)  What is the electric flux through the base?  [efluxtet] (b) What is the electric flux through each of the three sloping sides?  [efluxsides]

______________ tries to reflect real life, something accessible to any viewer, in his super-realistic sculptures, like ______________.

This painting by ________________, is called the Deposition of Christ, and is done in the _____________ style.

This fertility figure is nicknamed the _____________ and was created during the __________period.

This group portrait from the Baroque Period is