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Pastimes : Austrian Economics, a lens on everyday reality -- Ignore unavailable to you. Want to Upgrade?

To: Wildstar who wrote (151)	1/8/2003 1:46:35 PM
From: Don Lloyd	Respond to of 445

Wildstar, Do you have an "everyday reality" example of the Austrian view of time-preference, and how it differs from the neo-classical view? Sorry, no. Neither. I'll keep my eyes open for something and let you know. Off the top of my head, the preference would have to come down to a present state of subjective satisfaction for having provided for future consumption, not an objective discount rate applied to a future cash balance. However, I am perfectly content talking about discounted present value as it is a nice, clear concept, even if there is no mathematical precision really there. Regards, Don

To: Wildstar who wrote (151)	1/25/2003 1:17:58 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 445

Wildstar, A new accounting puzzle -- The company, The Dawn of a New Century, Ltd., is a wholesale supplier of undetectable counterfeit $100 Federal Reserve Notes to organized crime. Sold only in volume, each counterfeit $100 note produces $50 in revenue when sold at a fifty percent discount to its face value. Since the company is partly owned by organized crime families, accurate accounting is vital, and all profits are distributed to the owners as dividends at the end of the year. In 2002, the company realized $50M in revenue from the sale of 1M counterfeit $100 Federal Reserve Notes. The company has only two categories of costs, materials and labor compensation, both variable costs. Material costs consist of $1 in paper and $1 in ink for every note fabricated. Labor costs consist entirely of allowing the engravers to keep one half of the notes that they produce. Question #1 - How much of the $50M in 2002 revenue is distributed to the owners in dividends? Question #2 - Following GAAP and FASB guidelines, what number is to be entered on the total wage compensation expense line? Regards, Don