Consider a cereal manufacturer with two types of customer. type 1 individuals have reservation price $4, and using a coupon costs them $1.25 (in terms of effort/time). type 2 individuals have reservation price $3, and using a coupon does not cost them anything. it costs the manufacturer $2.50 to produce each box of cereal.
(a) what price should the manufacturer charge the type 1's? how large a discount could the coupons offer without tempting the type 1's to use them? 

(b) at the above price, how large a discount would the coupons have to offer to induce the type 2's to buy cereal? 

(c) what price and coupon discounts hould the manufacturer set? calculate the profit she receives from each group. would he still offer coupons if the manufacturing cost suddenly rose to $3?

Sarah salesrep is brand new to her job selling "lifetime" printers that never need replacement ink cartridges. the problem is that these printers cost ten times more than a regular printer, so it is difficult to get prospective buyers to understand the cost savings of buying it. to break through the barrier and begin making sales, sarah should use a analysis that highlights her printer's lower cost.

Trecek corporation incurs research and development costs of $625,000 in 2017, 30 percent of which relate to development activities subsequent to ias 38 criteria having been met that indicate an intangible asset has been created. the newly developed product is brought to market in january 2018 and is expected to generate sales revenue for 10 years. assume that a u. s.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with ifrs. thus, adjustments to convert from u. s. gaap to ifrs must be made. ignore income taxes. required: (a) prepare journal entries for research and development costs for the years ending december 31, 2017, and december 31, 2018, under (1) u. s. gaap and (2) ifrs. (c) prepare the entry(ies) that trecek would make on the december 31, 2017, and december 31, 2018, conversion worksheets to convert u. s. gaap balances to ifrs.

Rachel died in 2014 and her executor is finalizing her estate tax return. the executor has determined that rachel’s adjusted gross estate is $10,120,000 and that her estate is entitled to a charitable deduction in the amount of $500,000. using 2014 rates, calculate the estate tax liability for rachel’s estate.