The Fremont, CA plant of New United Motor Manufacturing Inc (NUMMI), a joint venture of General Motors and Toyota, assembles two types of cars (Corollas and Prisms). Separate assembly lines are used for each type of car. Classify each of the following cost items as: • fixed or variable with respect to the cars assembled
• direct or indirect with respect to the specific type of car assembled

Variable Fixed Direct Indirect

Cost of tires on Geo Prism
Salary of public relations manager for NUMMI plant
Annual awards dinner for Corolla suppliers
Salary of Prism design engineer
Freight costs of Corolla engine
Electricity cost of NUMMI plant
Wages paid to assembly-line temps in times of high production
Annual plant fire ins. policy

If a firm plans to issue new stock, flotation costs (investment bankers' fees) should not be ignored. there are two approaches to use to account for flotation costs. the first approach is to add the sum of flotation costs for the debt, preferred, and common stock and add them to the initial investment cost. because the investment cost is increased, the project's expected return is reduced so it may not meet the firm's hurdle rate for acceptance of the project. the second approach involves adjusting the cost of common equity as follows: . the difference between the flotation-adjusted cost of equity and the cost of equity calculated without the flotation adjustment represents the flotation cost adjustment. quantitative problem: barton industries expects next year's annual dividend, d1, to be $1.90 and it expects dividends to grow at a constant rate g = 4.3%. the firm's current common stock price, p0, is $22.00. if it needs to issue new common stock, the firm will encounter a 6% flotation cost, f. assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. what is the flotation cost adjustment that must be added to its cost of retaine

In which of the following games is it clearly the case that the cooperative outcome of the game is good for the two players and bad for society? a. two oil companies own adjacent oil fields over a common pool of oil, and each company decides whether to drill one well or two wells.b. two airlines dominate air travel between city a and city b, and each airline decides whether to charge a "high" airfare or a "low" airfare on flights between those two cities.c. two superpowers decide whether to build new weapons or to disarm.d. in all of the above cases, the cooperative outcome of the game is good for the two players and bad for society

Which of the statements is true about the values recorded in the balance sheet of a firm?