8. You manage a real estate investment company. One year ago, the company purchased 10 parcels of land distributed throughout the community for $10 million each. A recent appraisal of the properties indicates that five of the parcels are now worth $8 million each, while the other five are worth $16 million each. Ignoring any income received from the properties and any taxes paid over the year, calculate the investment company's account- ing earnings and its economic earnings in each of the following cases: a. The company sells all of the properties at their appraised values today. b. The company sells none of the properties. c. The company sells the properties that have fallen in value and keeps the others. d. The company sells the properties that have risen in value and keeps the others. e. After returning from a property management seminar, an employee recommends that the company adopt an end-of-year policy of always selling properties that have risen in value since purchase and always retaining properties that have fallen in value. The employee explains that, with this policy, the company will never show a loss on its real estate investment activities. Do you agree with the employee? Why, or why not? 9. Please ignore taxes for this problem. During 2016. Acadia In 10. Jonathan currently is a brew master for Acme Brewery. He really enjoys his job, but is intrigued by the prospect of quitting and starting his own brewery. He currently makes $62,000 at Acme Brewery. Jonathan anticipates that his new brewery will have annual revenues of $230,000, and total annual expenses for operating the brewery, outside of any payments to Jonathan, will be $190,000. Jonathan comes to you with his idea. He believes that he would be equally happy with either option, but that starting his own brewery is the right decision in light of its profitability. Ignoring what might happen beyond the first year, do you agree with him? Why or why not? 12. Below are summary cash flow statements for three roughly equal-sized companies. Net cash flows from operating activities Net cash used in investing activities Net cash from financing activities Cash balance at beginning of year ($ millions) A B C (300) (300) 300 (900) (30) (90) 1,200 210 (240) 150 150 150 a. Calculate each company's cash balance at the end of the year. b. Explain what might cause company C's net cash from financing activ- ities to be negative. c. Looking at companies A and B, which company would you prefer to own? Why? d. Is company C's cash flow statement cause for any concern on the part of C's management or shareholders? Why or why not? had market value of equity of