West Company acquired 60 percent of Solar Company for $328,500 when Solar’s book value was $428,500. The newly comprised 40 percent noncontrolling interest had an assessed fair value of $219,000. Also at the acquisition date, Solar had a trademark (with a 10-year life) that was undervalued in the financial records by $74,000. Also, patented technology (with a 5-year life) was undervalued by $54,000. Two years later, the following figures are reported by these two companies (stockholders’ equity accounts have been omitted): West Company Book Value Solar Company Book Value Solar Company Fair Value Current assets $ 634,000 $ 314,000 $ 334,000 Trademarks 274,000 214,000 294,000 Patented technology 424,000 164,000 164,000 Liabilities (404,000 ) (134,000 ) (134,000 ) Revenues (914,000 ) (414,000 ) Expenses 486,000 314,000 Investment income Not given Problem 4-16 (LO 4-2) What is the consolidated trademarks balance?

1. the political environment in india has proven to be critical to company performance for both pepsico and coca-cola india. what specific aspects of the political environment have played key roles? could these effects have been anticipated prior to market entry? if not, could developments in the political arena have been handled better by each company? 2. timing of entry into the indian market brought different results for pepsico and coca-cola india. what benefits or disadvantages accrued as a result of earlier or later market entry? 3. the indian market is enormous in terms of population and geography. how have the two companies responded to the sheer scale of operations in india in terms of product policies, promotional activities, pricing policies, and distribution arrangements? 4. “global localization” (glocalization) is a policy that both companies have implemented successfully. give examples for each company from the case.

1. all other things equal, according to the law of demand, when the price of a good falls, the demand for the good falls the demand for the good rises the quantity demanded of the good falls the quantity demanded of the good rises 2. when a market is in equilibrium, the quantity of the good that buyers are willing and able to buy exactly equals the quantity that sellers are willing and able to sell cannot be determined is less than the quantity that sellers are willing and able to sell is greater than the quantity that sellers are willing and able to sell 3. which of the following factors does not influence the demand for a good or service? consumer (buyer) income the price of related goods the number of sellers buyer expectations 4. when the number of sellers in a market increases, demand rises supply rises the price rises, all else equal the number of buyers falls

Brandt enterprises is considering a new project that has a cost of $1,000,000, and the cfo set up the following simple decision tree to show its three most likely scenarios. the firm could arrange with its work force and suppliers to cease operations at the end of year 1 should it choose to do so, but to obtain this abandonment option, it would have to make a payment to those parties. how much is the option to abandon worth to the firm?