On january 1, 2019, marge made a $75,000 interest-free loan to her son, steve, who used the money to start a new business. marge's sources of income in 2019 were salary of $100,000 and interest income of $4,000 from bonds she owns. steve's only sources of income in 2019 were $50,000 from the business and $500 of interest on his checking account. the relevant federal interest rate was 3%. the full amount of the loan was outstanding at the end of the year. describe the effect of the loan on the 2019 taxable income of both the borrower and lender. effect on marge's 2019 taxable income: . effect on steve's 2019 taxable income: .. b. how would your answer to part a change if the amount of the loan is $150,000 instead of $75,000? effect on marge's 2019 taxable income: effect on steve's 2019 taxable income:

Each of the following scenarios is based on facts in anactual fraud. categorize each scenario as primarily indicating (1) anincentive to commit fraud, (2) an opportunity to commit fraud, or(3) a rationalization for committing fraud. also state your reasoningfor each scenario. a. there was intense pressure to keep the corporation ' stock from declining further. this pressure came from investors, analysts, and the ceo, whose financial well-being was significantly dependent on the corporation ' s stock price. b. a group of top-level management was compensated (mostly in the form of stock-options) well in excess of what would be considered normal for their positions in this industry. c. top management of the company closely guards internal financial information, to the extent that even some employees on a “need-to-know basis” are denied full access. d. managing specific financial ratios is very important to the company, and both management and analysts are keenly observant of variability in key ratios. key ratios for the company changed very little even though the ratios for the overall industry were quite volatile during the time period. e. in an effort to reduce certain accrued expenses to meet budget targets, the cfo directs the general accounting department to reallocate a division’s expenses by a significant amount. the general accounting department refuses to acquiesce to the request, but the journal entry is made trough the corporate office. an accountant in the general accounting department is uncomfortable with the journal entries required to reallocate divisional expenses. he brings his concerns to the cfo, who assures him that everything will be fine and that the entries are necessary. the accountant considers resigning, but he does not have another job lined up and is worried about supporting his family. therefore, he never voices his concerns to either the internal or external auditors. f. accounting records were either nonexistent or in a state of such disorganization that significant effort was required to locate or compile them.

Compute the cost of not taking the following cash discounts. (use a 360-day year. do not round intermediate calculations. input your final answers as a percent rounded to 2 decimal places.)

Consider a treasury bill with a rate of return of 5% and the following risky securities: security a: e(r) = .15; variance = .0400 security b: e(r) = .10; variance = .0225 security c: e(r) = .12; variance = .1000 security d: e(r) = .13; variance = .0625 the investor must develop a complete portfolio by combining the risk-free asset with one of the securities mentioned above. the security the investor should choose as part of her complete portfolio to achieve the best cal would be a. security a b. security b c. security c d. security d