Profit or loss may be d +ivy1 using the basis a canting equation assets = liabilities +equity). Equity at 1/1/Yr 1 was US $90,000$210,000 of liabilities). Equity at 12/31/Yr 1 was US $99,000$270,000 - $171,000). Because owner transactions decreased assets by US $3,000$72,000 Investment- $75,000 withdrawals), profit must have been US $12,000 [$99,000 -$90,000 - $3,000)].

Simulation is a technique for experimenting with mathematical models using a computer. Monte Carlo simulation is a technique to generate the individual values for a random variable. A random number generator is used to produce numbers with a uniform probability distribution. The second step of the Monte Carlo process then transforms the random numbers into values consistent with the desired distribution. The performance of a model under conditions of uncertainty may be investigated by randomly selecting values for each of the variables in the model based on the probability distribution of each variable and then calculating the value of the solution. Advantages of Monte Carlo simulation are that time can be compressed, alternative policies can be considered, and complex systems can be analyzed.

Providing subsidies to military weapons manufacturers is an example of the essential industry argument. The government protects essential domestic industries during peacetime so that a country is not dependent on foreign sources of supply during war.

When the equity method is used, the investment is initially recorded at cost on the entity's books. The carrying amount is subsequently adjusted to recognize the profits or losses of the associate after the date of acquisition. Dividends received from an associate reduce the carrying amount.