Question 4

What is merchant banking? Why does it grow rapidly in Hong Kong?

Banks provide many services to business sectors. Describe syndicated loans and project financing.

Chan wanted to sell his business in which Lee was interested. During the course of negotiations in January, Chan correctly represented the takings to be about ＄40,000 a month.

The contract was not signed until June when takings had fallen to ＄1,000 a month owing to Chan's illness. Chan did not mention the drop when the contract was entered into in June.

Can Lee rescind the contract?

Peter wants to buy a comer store. When negotiating in January, he was told by David, the owner of the store that the business of the store was very good and the average net profit from the store was＄100,000 per month for the last year. However, in March, a supermarket opened near the store and the business at the store became very slow. Then a contract for the sale of the store was signed between them, all the time David didn't mention anything to Peter.

Could Peter make a claim against David for misrepresentation. Advise Peter supported by cases.

Chan promised to pay his nephew ＄5,000 if his nephew would refrain from drinking liquor and using tobacco until the nephew should be 21 years of age. The nephew took Chan's words seriously, and abandoned drinking and smoking. After the nephew celebrated his 21st birthday, he asked Chan to pay the amount promised, Chan refused.

Could the nephew sue Chan for breach of the contract?

How can I get the report about sale quality for each store and each quarter

and the total sale quality for each quarter at year 1993?

You can use the table sales and stores in datatabase pubs.

Table Sales record all sale detail item for each store. Column store_id is the id of

each store, ord_date is the order date of each sale item, and column qty is the

sale qulity. Table stores record all store information.

I want to get the result look like as below:

Output:

stor_name Total Qtr1 Qtr2 Qtr3 Qtr

4

---------------------------------------- ----------- ----------- ----------- -----------

-----------

Barnum's 50 0 50 0 0

Bookbeat 55 25 30 0 0

Doc-U-Mat: Quality Laundry and

Books 85 0 85 0 0

Fricative Bookshop 60 35 0 0 25

Total 250 60 165 0 25

Suppose you are in charge of a toll bridge that is essentially cost free. The demand for bridge crossings Q is given by P=12-2Q.

(a)Draw the demand curve for bridge crossings.

(b)How many people would cross the bridge if there were no toll?

(c)What is the loss of consumer surplus associated with the charge of a bridge toll of ＄6?

Sally Fiedler, CFA, is a portfolio manager for Asipre Investments, Inc. In her spare time Fiedler intends to manage the small endowment fund for her children’s private day school. She believes it will only take a couple of hours each weekend and she will receive a discount on tuition for her two children. According to Standard IV(B) – Additional Compensation Arrangements, Fiedler:

A.must inform her employer of the arrangement but need not get permission as the time commitment is small.

B.must inform her employer and get permission, either verbal or written.

C.must inform her employer of all the details of this arrangement and receive written permission.

D.need not inform her employer because it will be on her own time and there is no actual compensation received.

Sam Company Ltd. produces a range of products and absorbs production overhead using a rate of 168% on direct wages. The absorption rate was calculated from following budgeted figures:

＄

Direct wages 100,000

Fixed production overhead 90,000

Variable production overhead 78,000

Sam is making component W, which is an essential part of product M. The cost of making component W is as follows:

＄

Raw material 10

Direct wages 8

Production overhead 18

36

It is found that component W could be bought from an outside supplier at ＄21. It is unlikely to reduce any production costs even if component W is acquired from outside.

Required:

(a)Determine the overhead absorption rate.

(b)Advise whether the company should continue making component W or buy it from outside.