1. You are horrified when you overhear the president of the company where you are interning boasting how the company made more money last month than any previous month but then quietly confides to the group that the president is not sure how the company is going make payroll in two weeks. How can this be? (The answer is not uncollected A/R or too much inventory.)

2. In the current national debate, some argue that the tax on corporations should be increased so corporations such as Big Oil and Wall Street firms will pay their fair share. Others suggest the corporate tax should be decreased. Who will really pay the corporate income tax? Explain your rational.