Richard and linda are the only two employces of carolina company. in january, 2013, richard's gross pay was $5,500 and linda's gross pay was $5,200. each employee pays federal income tax equal to 25% of gross pay. in addition, linda pays $200 for insurance premiums and richard pays $225. each has $25 withheld for life insurance premiums. assume a fica tax rate of 8% on all earnings, a federal unemployment tax rate of 0.8%, and a state nemployment tax rate of 5.4%. the unemployment taxes are based on the first $7,000 of employee annual earnings

the entry to record the payroll 'r janary would include a

a. debt to salary payable to employees for $6,694.
b. credit to federal unemployment tax payable for $86.
c. credit to fica tax payable for $856.
d. credit to state unemployment tax payable for $578.

Acompany that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts. prior to buying the new equipment, the company used 6 workers, who produced an average of 79 carts per hour. workers receive $16 per hour, and machine coast was $49 per hour. with the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $11 per hour while output increased by four carts per hour. a) compute the multifactor productivity (mfp) (labor plus equipment) under the prior to buying the new equipment. the mfp (carts/$) = (round to 4 decimal places). b) compute the productivity changes between the prior to and after buying the new equipment. the productivity growth = % (round to 2 decimal places)

China's new 5 percent tax on disposable wooden chopsticks, reflecting concerns about deforestation, has been praised by environmentalists. the move is hitting hard at the japanese, who consume 25 billion set of wooden chopsticks annually. almost all of the chopsticks used in japan come from china. the reuirements for chinese manufacturers of wooden chopsticks to pay the 5 percent tax is a factor in their external environment.

Your company is starting a new r& d initiative: a development of a new drug that dramatically reduces the addiction to smoking. the expert team estimates the probability of developing the drug succesfully at 60% and a chance of losing the investment of 40%. if the project is successful, your company would earn profits (after deducting the investment) of 9,000 (thousand usd). if the development is unsuccessful, the whole investment will be lost -1,000 (thousand usd). your company's risk preference is given by the expected utility function: u(x) v1000 +x, where x is the monetary outcome of a project. calculate the expected profit of the project . calculate the expected utility of the project . find the certainty equivalent of this r& d initiative . find the risk premium of this r& d initiative e is the company risk-averse, risk-loving or risk-neutral? why do you think so?