(a)
Clean act: the Act characterizes an "electric utility steam-generating unit" as "any fossil-fuel− terminated burning unit of in excess of 25 megawatts electric that serves a generator that produces electricity available to be purchased." A unit that cogenerates steam and electricity and supplies more than 33% of its potential electric yield limit and more than 25 yield to any utility power appropriation framework available to be purchased is additionally viewed as an electric utility steam-generating unit.
To discuss:
In what places on the financial statements of coal-dependent electric utilities do you expect to observe the effects of this legislation?
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- Classify the following environmental activities as prevention costs, detection costs, internal failure costs, or external failure costs. For external failure costs, classify the costs as societal or private. Also, label those activities that are compatible with sustainable development (SD). 1. A company takes actions to reduce the amount of material in its packages. 2. After the activated carbons useful life, a soft-drink producer returns this material used for purifying water for its beverages to the supplier. The supplier reactivates the carbon for a second use in nonfood applications. As a consequence, many tons of material are prevented from entering landfills. 3. An evaporator system is installed to treat wastewater and collect usable solids for other uses. 4. The inks used to print snack packages (for chips) contain heavy metals. 5. Processes are inspected to ensure compliance with environmental standards. 6. Delivery boxes are used five times and then recycled. This prevents 112 million pounds of cardboard from entering landfills and saves 2 million trees per year. 7. Scrubber equipment is installed to ensure that air emissions are less than the level permitted by law. 8. Local residents are incurring medical costs from illnesses caused by air pollution from automobile exhaust pollution. 9. As part of implementing an environmental perspective for the Balanced Scorecard, environmental performance measures are developed. 10. Because of liquid and solid residues being discharged into a local lake, the lake is no longer fit for swimming, fishing, and other recreational activities. 11. To reduce energy consumption, magnetic ballasts are replaced with electronic ballasts, and more efficient light bulbs and lighting sensors are installed. As a result, 2.3 million kilowatt-hours of electricity are saved per year. 12. Due to a legal settlement, a chemicals company must spend 20,000,000 to clean up contaminated soil. 13. A soft-drink company uses the following practice: In all bottling plants, packages damaged during filling are collected and recycled (glass, plastic, and aluminum). 14. Products are inspected to ensure that the gaseous emissions produced during operation follow legal and company guidelines. 15. Operating pollution control equipment incurs costs. 16. An internal audit is conducted to verify that environmental policies are being followed.arrow_forwardThe following items are listed in an environmental financial statement (issued as part of an environmental progress report): Environmental benefits (savings, income, and cost avoidance): Ozone-depleting substances cost reductions Hazardous waste disposal cost reductions Hazardous waste material cost reductions Nonhazardous waste disposal cost reductions Nonhazardous waste material cost reductions Recycling income Energy conservation cost savings Packaging cost reductions Environmental costs: Corporate-level administrative costs Auditor fees Environmental engineering Facility professionals and programs Packaging professionals and programs for packaging reductions Pollution controls: Operations and maintenance Pollution controls: Depreciation Attorney fees for cleanup claims, and notices of violations (NOVs) Settlements of government claims Waste disposal Environmental taxes for packaging Remediation/Cleanup: On-site Remediation/Cleanup: Off-site 1. Classify each item in the…arrow_forwardEnvironmental Financial Reporting, Ecoefficiency, Improving Environmental Performance The following items are listed in an environmental financial statement (issued as part of an environmental progress report): Environmental benefits (savings, income, and cost avoidance): Ozone-depleting substances cost reductions Hazardous waste disposal cost reductions Hazardous waste material cost reductions Nonhazardous waste disposal cost reductions Nonhazardous waste material cost reductions Recycling income Energy conservation cost savings Packaging cost reductions Environmental costs: Corporate-level administrative costs Auditor fees Environmental engineering Facility professionals and programs Packaging professionals and programs for packaging reductions Pollution controls: Operations and maintenance Pollution controls: Depreciation Attorney fees for cleanup claims, and notices of violations (NOVs) Settlements of government claims Waste disposal Environmental taxes for packaging…arrow_forward
- Environmental Financial Reporting, Ecoefficiency, Improving Environmental Performance The following items are listed in an environmental financial statement (issued as part of an environmental progress report): Environmental benefits (savings, income, and cost avoidance): Ozone-depleting substances cost reductions Hazardous waste disposal cost reductions Hazardous waste material cost reductions Nonhazardous waste disposal cost reductions Nonhazardous waste material cost reductions Recycling income Energy conservation cost savings Packaging cost reductions Environmental costs: Corporate-level administrative costs Auditor fees Environmental engineering Facility professionals and programs Packaging professionals and programs for packaging reductions Pollution controls: Operations and maintenance Pollution controls: Depreciation Attorney fees for cleanup claims, and notices of violations (NOVs) Settlements of government claims Waste disposal Environmental taxes for packaging…arrow_forwardEnvironmental Financial Reporting, Ecoefficiency, Improving Environmental Performance The following items are listed in an environmental financial statement (issued as part of an environmental progress report): Environmental benefits (savings, income, and cost avoidance): Ozone-depleting substances cost reductions Hazardous waste disposal cost reductions Hazardous waste material cost reductions Nonhazardous waste disposal cost reductions Nonhazardous waste material cost reductions Recycling income Energy conservation cost savings Packaging cost reductions Environmental costs: Corporate-level administrative costs Auditor fees Environmental engineering Facility professionals and programs Packaging professionals and programs for packaging reductions Pollution controls: Operations and maintenance Pollution controls: Depreciation Attorney fees for cleanup claims, and notices of violations (NOVs) Settlements of government claims Waste disposal Environmental taxes for packaging…arrow_forwardEnvironmental Financial Reporting, Ecoefficiency, Improving Environmental Performance The following items are listed in an environmental financial statement (issued as part of an environmental progress report): Environmental benefits (savings, income, and cost avoidance): Ozone-depleting substances cost reductions Hazardous waste disposal cost reductions Hazardous waste material cost reductions Nonhazardous waste disposal cost reductions Nonhazardous waste material cost reductions Recycling income Energy conservation cost savings Packaging cost reductions Environmental costs: Corporate-level administrative costs Auditor fees Environmental engineering Facility professionals and programs Packaging professionals and programs for packaging reductions Pollution controls: Operations and maintenance Pollution controls: Depreciation Attorney fees for cleanup claims, and notices of violations (NOVs) Settlements of government claims Waste disposal Environmental taxes for packaging…arrow_forward
- The following items are listed in an environmental financial statement (issued as part of an environmental progress report): Environmental benefits (savings, income, and cost avoidance): Ozone-depleting substances cost reductions Hazardous waste disposal cost reductions Hazardous waste material cost reductions Nonhazardous waste disposal cost reductions Nonhazardous waste material cost reductions Recycling income Energy conservation cost savings Packaging cost reductions Environmental costs: Corporate-level administrative costs Auditor fees Environmental engineering Facility professionals and programs Packaging professionals and programs for packaging reductions Pollution controls: Operations and maintenance Pollution controls: Depreciation Attorney fees for cleanup claims, and notices of violations (NOVs) Settlements of government claims Waste disposal Environmental taxes for packaging Remediation/cleanup: On-site Remediation/cleanup: Off-site Required: 1. Classify each item in the statement as prevention, detection, internal failure, or external failure. In classifying the items listed in the environmental benefits category, first classify the underlying cost item (e.g., the cost of hazardous waste disposal). Next, think of how you would classify the cost of the activities that led to the cost reduction. That is, how would you classify the macro activity: reducing hazardous waste cost disposal? 2. Assuming ecoefficiency, what relationship over time would you expect to observe between the environmental benefits category and the environmental costs category?arrow_forwardThe table below shows the various levels of a city's pollution cleanup along with the marginal benefit and marginal cost. Pollution Cleanup Marginal Benefit (dollars) $500 400 300 200 100 Quantity of Pollution Cleanup (units) 25 50 100 150 200 Marginal Cost (dollars) $100 200 300 400 500 Instructions: Enter your answers as a whole number. a. Suppose the city decides to undertake a cleanup level of 25 units. The marginal benefit of cleaning up the 25th unit is $ The marginal cost of cleaning up the 25th unit is $ Since the marginal benefit is [(Click select) the marginal cost, the city should clean up (Click to select) b. Suppose the city decides to undertake a cleanup level of 200 units. The marginal benefit of cleaning up the 200th unit is $ The marginal cost of cleaning up the 200th unit is $ Since the marginal benefit is (Click to select) c. The optimal level of pollution cleanup is the marginal cost, the city should clean up units. (Click to select) pollution. pollution.arrow_forwardRefer to the XYZ Company example in the chapter and the results in Panels A and B of Exhibit 12.7. On the basis of this information, management of the company has decided to delay the implementation of the project for 1 year. Those managers are now interested in knowing how sensitive this decision is with respect to the assumptions they’ve made regarding the basic analysis. Therefore, they have asked you to prepare some supplementary analyses regarding Panel B of Exhibit 12.7. Required: 1. Holding everything else constant, what is the expected NPV of the decision if the probabilities for the three scenarios are as follows: high (20%), medium (47%), and low (33%)? 2. Holding everything else constant, what is the expected NPV of the decision if the probabilities for the three scenarios are as follows: high (24%), medium (43%), and low (33%)? 3. Prepare a 5 × 3 table containing the estimated NPV of the decision to delay for each combination of the following: risk-free rate of interest…arrow_forward
- Sunny Nights Inc. is completely powered by the city power grid, but management is considering switching fuel sources in an effort to improve the publics perception of the companys corporate social responsibility. Within the next five years, management wants the company to be completely solar powered and to market this change through company advertising. Upon consulting with Sunny Nights, you have determined that an appropriate course of action is to include this CSR activity as a strategic objective on the companys current balanced scorecard. a. Determine the appropriate performance perspective for the CSR strategic objective. b. Suggest one possible performance metric for the objective. c. Determine an appropriate yearly performance target for the performance metric.arrow_forwardRussell Forest Products Limited needed to upgrade a burner at its sawmill in Cochrane, Ontario, to comply with the new air pollution standards. The new burner, which is used to burn the scrap wood from its sawing operations, will not only reduce the amount of pollution, but will supply heat for the plant facility, including the wood dryer. In order to encourage Russell Forest Products Limited in its compliance with the stan- dards, the Province of Ontario extended an interest-free loan of $400,000 on December 31, 2011. The only conditions in obtaining the interest-free loan are that the loan proceeds be applied directly to the construction costs and that the loan be repaid in full on December 31, 2019. RussellForest Products Limited borrowed the remaining funds from the bank for the construction of the burner and will be paying interest at the rate of 7% per year. Instructions (a) Discuss the issues related to obtaining the interest-free loan from the Province of Ontario. (b)…arrow_forwardWhich one of the following costs is most likely to be deductible? Group of answer choices Fines paid for dumping toxic waste into a City of Denver park. Bribes to a city health inspector to ensure an “A” rating to a restaurant. The telephone bill for the headquarters of an illegal stolen car parts organization. Advertising costs for a Colorado marijuana dispensary.arrow_forward
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