1. The quadrant that identifies a brand-new product that can be developed and pitched to a new market in diversification analysis is called "Product development."The correct answer is option B. 2. True. A company's core competencies are its unique strengths and capabilities that give it a competitive advantage in the marketplace. 3. False. While consumers generally engage in the consumer decision-making process, the level of involvement and engagement can vary depending on the product or purchase.
1. In this quadrant, the focus is on creating and introducing new products or services to an existing market or entering a new market with innovative offerings.
2. These competencies are the specialized skills, knowledge, technologies, or resources that set the company apart from its competitors and enable it to deliver superior value to customers.
3. For routine and low-involvement purchases, consumers may skip certain steps or engage in a simplified decision-making process, whereas for high-involvement purchases, consumers are more likely to engage in all the steps of the process.
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Scenario #1 A group of friends gathered at a local restaurant franchise for dinner. Midway through their meal, they noticed a mouse dart out between two booths and called the furry patron to the attention of their waiter. The waiter said, "That's cool, not my job" and walks away from the table. Problem: LISTEN: N/A – Listen to the "Scenario" presented by the guest. REPEAT:
APOLOGIZE:
ACKNOWLEDGE:
MAKE:
EXPLAIN:
SAYS:
Scenario #2 A couple with a reservation for 7:00pm arrives at the restaurant at 6:45pm. Their table is still occupied by another pair of diners, and they are offered a seat at the bar until the table is cleared and ready. Time passes, and it eventually becomes 7:20pm – the previous diners are still at the table finishing their meal. The couple requests to be seated elsewhere, as they had booked a reservation and it wasn’t fair to them that walk-ins were getting seated at other empty tables first. The hostess says that she cannot seat them at an empty table, it must be the specific one they reserved. As they continue to wait, they notice that the table has been cleared and a walk-in guest has been seated where they are supposed to have a reservation. The customer raises his voice and demands to speak with a manager, disrupting the dining room service of the other patrons. Problem: LISTEN: N/A – Listen to the "Scenario" presented by the guest.
REPEAT:
APOLOGIZE:
ACKNOWLEDGE:
MAKE:
EXPLAIN:
SAYS:
In both scenarios, the restaurant staff failed to address the concerns of the customers appropriately, leading to dissatisfaction and disruption.
In scenario #1, when the group of friends reported the presence of a mouse to their waiter, the waiter's response of "That's cool, not my job" was dismissive and unprofessional. This lack of concern for health and hygiene issues in the establishment reflects poorly on the restaurant as a whole. By disregarding the customers' valid complaint, the waiter failed to acknowledge the problem and take appropriate action to resolve it.
In scenario #2, the couple arrived for their reservation and found their table still occupied by previous diners. Although they were initially offered a seat at the bar until the table was ready, the wait time exceeded their reservation time by 20 minutes. When they requested to be seated elsewhere due to the unfairness of walk-ins being seated before them, the hostess refused to accommodate their request, insisting on the specific table they had reserved. However, the situation worsened when the couple noticed that the table had been cleared and given to a walk-in guest instead. This not only demonstrated a disregard for the couple's reservation but also raised concerns about consistency and fairness in the restaurant's seating policies.
Both scenarios highlight the importance of proper customer service and addressing customer concerns promptly and professionally. Failing to do so can result in dissatisfaction, negative word-of-mouth, and potential disruptions to the dining experience of other patrons.
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CHICAGO TRIBUNE COMPANY
1. The Chicago Tribune is the seventh-largest newspaper in the country. Overhauling its data center and
consolidating servers was a difficult task; however, the payoff was tremendous. The Chicago Tribune
successfully moved its critical applications from a mishmash of mainframes and older Sun
Microsystems servers to a new dual-site enterprise architecture, which has resulted in lower costs and
increased reliability throughout the company. The paper’s new enterprise architecture clustered its
servers over a two-mile distance, lighting up a 1 Gbps dark-fiber link—an optical fiber that is in place
but not yet being used—between two data centers. This architecture lets the newspaper spread the
processing load between the servers while improving redundancy and options for disaster recovery.
The transfer to the new architecture was not smooth. A small piece of software written for the
transition contained a coding error that caused the Tribune’s editorial applications to experience
intermittent processing failures. As a result, the paper was forced to delay delivery to about 40
percent of its 680,000 readers and cut 24 pages from a Monday edition, costing the newspaper nearly
$1 million in advertising revenue. After editorial applications were stabilized, the Tribune proceeded
to migrate applications for operations—the physical production and printing of the newspaper—and
circulation to the new enterprise architecture. "As we gradually took applications off the mainframe,
we realized that we were incurring very high costs in maintaining underutilized mainframes at two
different locations," said Darko Dejanovic, vice president and CTO of the Tribune Co., which owns
the Chicago Tribune, the Los Angeles Times, Long Island’s Newsday, and about a dozen other
metropolitan newspapers. "By moving from two locations to one, we’ve achieved several million
dollars in cost savings. There’s no question that server consolidation was the right move for us." The
Tribune Co. is excited about its new enterprise architecture and is now looking to consolidate
software across its newspapers. Currently, each newspaper maintains its own classified
advertising and billing, which means the parent company must support about 10 billing packages and
the same number of classified-ad programs. The Tribune Co. has found that most of the business
processes can be standardized. So far, it has standardized about 95 percent of classified-ad processes
and about 90 percent of advertising-sales processes. Over the next three years, the Tribune Co. will
replace the disparate billing and ad applications across the company with a single package that will be
used by all business units. The different newspapers will not necessarily share the same data, but they
will have the same processes and the same systems for accessing them. Over time, that will allow
some of the call centers to handle calls for multiple newspapers; East Coast centers will handle the
early-morning calls, and West Coast centers the late-day and evening calls. The Tribune Co. is
looking at a few additional projects including the implementation of hardware that will allow its
individual applications to run on partial CPUs, freeing up processor power, and making more efficient
use of disk space.
Required:
A. Review the five characteristics of infrastructure architecture and rank them in order of their
potential impact on Tribune Co.’s business. (2 Marks)
B. Explain the meaning of disaster recovery as it affects the Tribune Co (2 Marks)
C. Define backups and recovery. What are the risks to the Tribune Co.’s business if it fails to
implement an adequate backup plan? (2 Marks)
D. Why is a scalable and highly available enterprise architecture critical to Tribune Co.’s current
operations and future growth? (2 Marks)
E. Identify the need for information security at the Tribune Co. (2 Marks)
F. How could the Tribune Co. use a "Classified Ad" Web service across its different businesses?
(2 Marks)
A. The five characteristics of infrastructure architecture that potentially impact the Tribune Co.'s business are scalability, reliability, availability, performance, and security.
B. Disaster recovery refers to the process and strategies in place to restore critical systems and operations after a disruptive event. It ensures business continuity and minimizes downtime for the Tribune Co.
C. Backups and recovery involve creating copies of data and systems to protect against data loss or system failures. If the Tribune Co. fails to implement an adequate backup plan, it risks losing critical data, facing extended downtime, and compromising business operations.
D. A scalable and highly available enterprise architecture is critical for the Tribune Co.'s current operations and future growth because it allows for flexible expansion, accommodates increasing demands, ensures uninterrupted service, and minimizes the risk of system failures.
E. Information security is essential for the Tribune Co. to protect sensitive data, maintain customer trust, comply with regulations, prevent unauthorized access, and mitigate the risks of data breaches or cyber attacks.
F. The Tribune Co. can use a "Classified Ad" Web service across its different businesses to standardize and streamline the classified advertising process, improve efficiency, reduce costs, and provide a consistent user experience across its various newspapers.
A. The five characteristics of infrastructure architecture can be ranked in the following order of potential impact on the Tribune Co.'s business: 1) Reliability, 2) Availability, 3) Scalability, 4) Performance, and 5) Security. Reliability is crucial for ensuring uninterrupted operations, followed by availability to provide consistent access to services. Scalability allows for future growth and accommodating increasing demands. Performance ensures efficient and responsive systems, and security protects against data breaches and unauthorized access.
B. Disaster recovery refers to the strategies and processes put in place to recover and restore critical systems and operations after a disruptive event such as a natural disaster or system failure. For the Tribune Co., it means having plans, procedures, and infrastructure in place to recover and resume newspaper production, distribution, and other essential operations as quickly as possible to minimize downtime and ensure business continuity.
C. Backups involve creating copies of data and systems to safeguard against data loss or system failures. Recovery refers to the process of restoring data and systems from backups in the event of a failure. If the Tribune Co. fails to implement an adequate backup plan, it faces the risk of data loss, extended downtime, inability to meet publishing deadlines, compromised customer data, damaged reputation, financial losses, and legal and regulatory consequences.
D. A scalable and highly available enterprise architecture is critical for the Tribune Co.'s current operations and future growth. Scalability allows the company to handle increased demand and expand its infrastructure as needed. High availability ensures uninterrupted access to services, reducing downtime and ensuring customer satisfaction. It also supports disaster recovery efforts. A scalable and highly available architecture enables the Tribune Co. to meet the evolving needs of its readership, handle peak traffic periods, and accommodate future growth without compromising performance or reliability.
E. Information security is vital for the Tribune Co. to protect sensitive data such as customer information, intellectual property, and internal communications. It ensures the confidentiality, integrity, and availability of data, guarding against unauthorized access, data breaches, cyber attacks, and other security threats. Information security measures such as access controls, encryption, network security, and employee training are necessary to safeguard the Tribune Co.'s assets, maintain customer trust, comply with regulations, and prevent reputational damage.
F. The Tribune Co. can use a "Classified Ad" Web service across its different businesses to streamline and standardize the classified advertising process. By implementing a centralized web service, the company can consolidate its billing and ad applications, simplify operations, reduce costs, and provide a consistent user experience across its
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Scientific management was found to be very useful in the automobile assembly lines and capital intensive industries.
True
False
Scientific Management was found to be highly correlated with efficiency in the workplace.
True
False
True.
Scientific management, also known as Taylorism, was indeed found to be very useful in the automobile assembly lines and capital-intensive industries. This approach, developed by Frederick Winslow Taylor, aimed to optimize productivity and efficiency by applying scientific principles to work processes and tasks. In automobile assembly lines and capital-intensive industries, where standardized and repetitive tasks are prevalent, scientific management techniques such as time and motion studies, work simplification, and specialization helped streamline operations, increase productivity, and reduce costs. Therefore, the statement is true.
True.
Scientific management, developed by Frederick Winslow Taylor, aimed to improve efficiency in the workplace by applying scientific principles to work processes. It focused on identifying the most efficient methods of performing tasks, simplifying work processes, and optimizing worker productivity. Through techniques such as time and motion studies, standardization, and specialization, scientific management sought to eliminate wasteful practices and maximize efficiency.
Therefore, it can be concluded that scientific management is highly correlated with efficiency in the workplace, making the statement true.
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Discuss various methods of financing a business for a sole
trader.
(400-460 words, no plagiarism and write in own words, cite
reference if any).
In conclusion, there are various methods of financing a business for a sole trader. Some of these methods include personal savings, family and friends, crowdfunding, bank loans, government grants and loans, angel investors, and venture capitalists. A sole trader should choose a financing method that is suitable for their business needs and goals. They should also ensure that they understand the terms and conditions of the financing method they choose to avoid any complications in the future.
There are various methods of financing a business for a sole trader. Some of these methods include:
1. Personal savingsThis is the most common method of financing a business for a sole trader. They use their personal savings to fund their business. Personal savings are advantageous because the sole trader does not have to worry about high-interest rates or repaying loans.
2. Family and FriendsA sole trader can also get financial assistance from family and friends. They can provide financial support through loans, investment, or gifts. However, this method can lead to strained relationships if the business fails to generate profits.
3. CrowdfundingCrowdfunding is a method of financing a business that involves raising small amounts of money from many people. A sole trader can create a crowdfunding campaign and ask people to contribute to the campaign.
4. Bank loansSole traders can also get loans from banks to finance their businesses. They have to provide collateral to get the loan, and they have to repay the loan with interest. Bank loans are beneficial because they provide the sole trader with a large sum of money to invest in their business.
5. Government grants and loansThe government provides grants and loans to small businesses to help them start and grow their businesses. Sole traders can apply for these grants and loans to finance their businesses. They have to meet certain eligibility requirements to qualify for these grants and loans.
6. Angel investorsAngel investors are wealthy individuals who invest in small businesses in exchange for equity or ownership in the business. They provide the sole trader with the capital they need to start or expand their business.
7. Venture capitalistsVenture capitalists are investors who invest in small businesses that have the potential for high returns. They provide the sole trader with the capital they need to grow their business. However, they require the sole trader to give up a percentage of their ownership in the business in exchange for the investment
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Alisa is trying to market a new product. The potential sale for this type of product is some large fixed number. Research and thought convince her that either her product will be a hit and capture 30% of the market, or else it will be a flop, in which case her market share will be only 10%. Moreover, she judges these two possibilities are equally likely (hit or flop). Therefore, she decides to do some more investigation and finds that 5 out of 20 people she tested prefer her new product to the competition. What should be her revised probability that her product will be a hit? What about a flop’s probability?
The revised probability that the product will be a hit is 0.652 or approximately 65.2%, and the revised probability that the product will be a flop is 0.348 or approximately 34.8%
Let P(H) and P(F) represent the probability of the product being a hit or a flop, respectively.
Initially, Alisa believed that the two possibilities (hit or flop) are equally likely, so we have:P(H) = P(F) = 0.5If the product is a hit, it will capture 30% of the market. If it's a flop, it will capture only 10% of the market.
Therefore, the probability of someone preferring her product is:5/20 = 0.25On the other hand, the probability of someone preferring the competition is:15/20 = 0.75
Now, we can use Bayes' theorem to find the revised probability of the product being a hit or a flop.
Bayes' theorem[tex]:P(H|A) = P(A|H) * P(H) / [P(A|H) * P(H) + P(A|F) * P(F)]P(F|A) = P(A|F) * P(F) / [P(A|H) * P(H) + P(A|F) * P(F)[/tex]]where A is the event of someone preferring Alisa's product.
Using the values we have[tex]:P(H|A) = (0.25 * 0.3) / (0.25 * 0.3 + 0.75 * 0.1) = 0.652P(F|A) = (0.25 * 0.1) / (0.25 * 0.3 + 0.75 * 0.1) = 0.348[/tex]
Answer: The revised probability that the product will be a hit is 0.652 or approximately 65.2%, and the revised probability that the product will be a flop is 0.348 or approximately 34.8%.
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A company's current E is $50 billion and D is $150 billion. The company's current stock beta is 1.5. Assume that the risk-free rate is 5% and the expected market rate of return is 10%. Now the company issues another $10 billion of debt and uses it to repurchase equity. What is the company’s new cost of equity in percentage? (Do not round intermediate calculations and enter your answer as a percent rounded to 3 decimal places, e.g 12.345%)
Therefore, the company's new cost of equity is 42.5%.
To find the company's new cost of equity, we need to calculate the new equity value and the new beta.
1. Calculate the new equity value:
The company's current equity value is E = $50 billion.
By issuing $10 billion of debt and repurchasing equity, the company reduces its equity value by $10 billion.
So, the new equity value is E' = E - $10 billion = $50 billion - $10 billion = $40 billion.
2. Calculate the new beta:
The company's current beta is 1.5.
When the company repurchases equity, the beta of the remaining equity increases.
The formula to calculate the new beta is:
New Beta = Current Beta * (1 + (Debt/Equity))
Substituting the values:
Debt = $150 billion + $10 billion = $160 billion
Equity = $50 billion - $10 billion = $40 billion
New Beta = 1.5 * (1 + ($160 billion / $40 billion))
= 1.5 * (1 + 4)
= 1.5 * 5
= 7.5
3. Calculate the new cost of equity:
The formula to calculate the cost of equity is:
Cost of Equity = Risk-Free Rate + Beta * (Expected Market Rate of Return - Risk-Free Rate)
Substituting the values:
Risk-Free Rate = 5%
Beta = 7.5
Expected Market Rate of Return = 10%
Cost of Equity = 5% + 7.5 * (10% - 5%)
= 5% + 7.5 * 5%
= 5% + 37.5%
= 42.5%
Therefore, the company's new cost of equity is 42.5%.
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A group of friends wants to launch a company. They all work together to contribute half the required capital and are capable of running the business. They request for funding through Islamic finance in order to contribute the significant remaining 50% of the money without engaging in management.?
a. Determining the appropriate Islamic financial Instruments
b. Evaluate one of the risks and the risks mitigate
a. Determining the appropriate Islamic financial Instruments:
In the given scenario, the group of friends is launching a company and is capable of running the business.
They are requesting funding through Islamic finance to contribute the remaining 50% of the money without engaging in management. Thus, the appropriate Islamic financial instruments for them to consider would be Musharaka, Mudaraba, and Sukuk. Musharaka refers to the partnership arrangement that includes two or more parties who contribute capital to a business venture, sharing profits and losses.
Mudaraba is similar to Musharaka, but instead of sharing profits and losses, one party (the investor) provides the capital, while the other party (the entrepreneur) manages the business. Sukuk are Islamic financial certificates that provide investors with a return on their investment while complying with Sharia law. The return on Sukuk is based on the profit of an underlying asset or investment project.
b. Evaluate one of the risks and the risks mitigate:
One of the risks that the group of friends might face is default risk. Default risk is the risk of the borrower failing to repay the loan. This risk could be mitigated by having a proper collateral agreement in place. In case of a default, the collateral could be sold to recover the money. Also, the group could approach the bank with a guarantor or collateral. Another way of mitigating the default risk would be to opt for the Mudaraba financing option. In this case, the investor provides the capital and the entrepreneur manages the business. The investor, in this case, would not be liable for any losses and would only lose the capital invested in the venture.
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Under the imprest system the cashier has a fixed amount at the start of the period known as a float. The float is always restored at the end of the period. True or False
The answer is True. Under the imprest system, the cashier has a fixed amount of money at the start of the period, known as a float. This money is used to pay for petty cash expenses.
At the end of the period, the float is replenished to its original amount. The imprest system is a system of controlling petty cash expenses. It works by having a fixed amount of money set aside for petty cash expenses. This amount is known as the float.
The float is used to pay for small expenses that are not worth writing a check for. At the end of the period, the float is replenished to its original amount.
The imprest system is a good way to control petty cash expenses because it helps to ensure that the money is used for its intended purpose. It also helps to prevent fraud, because the amount of money in the float is known and can be easily checked.
The float is always restored at the end of the period because it is used to pay for petty cash expenses. If the float is not restored, then the cashier will be short of money. This could lead to the cashier having to use their own money to pay for petty cash expenses, which could be a problem if they do not have enough money.
The imprest system is a simple and effective way to control petty cash expenses. It is a good system to use if you need to track small expenses.
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commercials and print ads undergo posttesting in order to:
Commercials and print ads undergo post-testing in order to evaluate the effectiveness of the advertisement and assess how well the advertisement performs. Additionally, it helps advertisers to identify potential areas for improvement and provide insights into how consumers engage with the advertisement.
What is post-testing?
Post-testing is a method that is used by advertising agencies and marketers to evaluate the effectiveness of their advertising campaigns, including commercials and print ads.
The objective of post-testing is to determine the extent to which the advertising messages have been communicated and the extent to which they have influenced the target audience. Post-testing is a crucial step in the advertising process, as it provides insights into how well the advertisement is performing and helps advertisers make informed decisions about how to improve their campaigns.
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A modified endowment contract (MEC) receives different tax treatment on a pre-death distributions than other life insurance policies because the modified endowment policies?
A. has a larger cash surrender value
B. generally pays dividends to the policyowner
C. tends to be an investment vehicle
D. does not provide for loans to the policyowner
A Modified Endowment Contract (MEC) is a life insurance policy that is funded with premiums exceeding the limitations for the sum of premiums paid to a policy. MECs are subject to a different set of tax rules than traditional life insurance policies.
MECs get different tax treatment on pre-death distributions than other life insurance policies because the modified endowment policies tend to be an investment vehicle. This is option C.MEC is a tax-qualified contract; the Internal Revenue Service (IRS) developed the rules that differentiate it from other types of life insurance policies. These policies are designed primarily as investment vehicles and are required to follow the same distribution rules as any other non-qualified annuity (NQA).
There are significant tax implications for the policy owner if the policy is surrendered or the owner dies, and distributions are made from the policy before the owner's death.Therefore, the Modified Endowment Contract (MEC) gets different tax treatment on pre-death distributions than other life insurance policies because the modified endowment policies tend to be an investment vehicle.
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" Please answer the following questions about an advertisement or other promotion you've seen recently. Describe the advertisement/promotion. What company/organization was responsible? Explain the general format/message communicated. Discuss how the advertisement relates to each component of the AIDA model. For example, is it effective (or not) at getting attention? Explain. What about generating interest? Desire? Action?
I recently encountered an advertisement for a new smartphone called the "TechX Pro" by the company "GizmoTech."
What company/organization was responsible?GizmoTech, a well-known technology company, designed and released the advertisement for their latest smartphone, the TechX Pro.
The advertisement showcased the TechX Pro's sleek design, advanced features, and powerful performance. It emphasized the phone's high-quality camera, fast processing speed, and immersive display. The message conveyed was that the TechX Pro offers a superior user experience and is a must-have device for tech enthusiasts.
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Your client decides to invest $3 million in Flama stock and $7 million in Blanca stock. The riskfree rate is 2% and the market risk premium is 6%. The beta of the Flama Stock is 2 , and the beta of the Blanca stock is 1 . a. What are the weights for this portfolio? b. What is the portfolio beta? c. What is the required retum of the portfolio?
To calculate the weights for the portfolio, we divide the individual investment amounts by the total investment amount:
Given:
Investment in Flama stock = $3 million
Investment in Blanca stock = $7 million
Total investment amount = $3 million + $7 million = $10 million
a. Weights for the portfolio:
Weight of Flama stock = Investment in Flama stock / Total investment amount = $3 million / $10 million = 0.3 or 30%
Weight of Blanca stock = Investment in Blanca stock / Total investment amount = $7 million / $10 million = 0.7 or 70%
b. To calculate the portfolio beta, we use the weighted average of the betas of individual stocks based on their respective weights:
Given:
Beta of Flama stock = 2
Beta of Blanca stock = 1
Portfolio beta = (Weight of Flama stock * Beta of Flama stock) + (Weight of Blanca stock * Beta of Blanca stock)
Portfolio beta = (0.3 * 2) + (0.7 * 1)
Portfolio beta = 0.6 + 0.7
Portfolio beta = 1.3
c. The required return of the portfolio can be calculated using the Capital Asset Pricing Model (CAPM):
Required Return = Risk-Free Rate + (Portfolio Beta * Market Risk Premium)
Given:
Risk-Free Rate = 2% = 0.02
Market Risk Premium = 6% = 0.06
Portfolio Beta = 1.3
Required Return = 0.02 + (1.3 * 0.06)
Required Return = 0.02 + 0.078
Required Return = 0.098 or 9.8%
Therefore:
a. The weights for this portfolio are 30% for Flama stock and 70% for Blanca stock.
b. The portfolio beta is 1.3.
c. The required return of the portfolio is 9.8%.
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The overall market for wheat is perfectly competitive. The market demand curve is given by:
Qd = 1400 − 50P Qd = 1400 − 50P
All farmers in the market are identical and each have a cost function of:
C(q) = 0.5q2 + 10q +18
MC = q + 10 MC = q + 10
AVC = 0.5q +10 AVC = 0.5q +10
ATC = 0.5q +10 + 18qATC = 0.5q +10 + 18q
Calculate the long run equilibrium in this market
To calculate the long run equilibrium in this perfectly competitive market, we need to determine the quantity and price at which the market supply and demand curves intersect. In the long run, all firms in a perfectly competitive market can freely enter or exit the industry, resulting in a situation where economic profits are driven to zero.
To find the long run equilibrium, we need to equate the market demand and supply curves. The market supply is determined by the individual firms' cost functions. In this case, the market supply is the sum of the individual farmers' quantities supplied. The cost function for each farmer is given by C(q) = 0.5q^2 + 10q + 18, where q represents the quantity produced by each farmer. To find the market supply curve, we need to sum up the individual farmers' quantities supplied. Since all farmers are identical, we can multiply the individual farmer's quantity supplied (q) by the number of farmers in the market (N). The market supply curve (S) is given by S = N * q, where q = MC - AVC. The market demand curve is given by Qd = 1400 - 50P, where Qd represents the quantity demanded and P represents the price. To find the equilibrium quantity, we need to set the market supply equal to the market demand: N * q = Qd. Substituting the expressions for the market supply and demand curves, we have N * (q + 10) = 1400 - 50P. To find the equilibrium price, we need to solve for P. Rearranging the equation, we get -50P = -10N - 1400 + Nq.
Simplifying further, we have P = (10/N) * (q - 140). Now, let's find the equilibrium quantity and price by substituting the expression for q in terms of P: q = MC - AVC. Substituting the expressions for MC and AVC, we have q = P - 10 - (0.5q + 10). Simplifying the equation, we get 1.5q = P - 20. Substituting P = (10/N) * (q - 140), we have 1.5q = [(10/N) * (q - 140)] - 20. Simplifying further, we get q = (2000/N) - 560. Now, we can substitute the value of q into the expression for P: P = (10/N) * (q - 140). Substituting q = (2000/N) - 560, we have P = (10/N) * (((2000/N) - 560) - 140).
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Segregation of duties is an aspect of which of the following components of internal control?
a) Control environment
b) The information system
c)Control activities
d) Monitoring
Segregation of duties is an aspect of Control Activities of the internal control component. An internal control system is a procedure established by management to ensure compliance with organizational goals, policies, laws, and regulations, as well as safeguarding resources and enhancing the efficiency and effectiveness of operations.
Internal control is divided into five components: Control environment, Risk assessment, Control activities, Information and communication, and Monitoring. Control environment: It's the foundation of a business's internal control structure. Management's philosophy, operating style, and risk tolerance, as well as the organization's ethical values and integrity, are all part of it.
Risk Assessment: It entails identifying and analyzing the dangers that an organization faces and determining how to address them. Control activities: Control activities are the policies and procedures that the organization uses to reduce the risks that have been identified. Segregation of duties is an example of a control activity. Information and Communication: A dependable information system produces information that is pertinent, high-quality, and available in a timely and appropriate manner.
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True or False? Product proliferation is an appropriate strategy to use in the dry-cleaning industry.
True. Product proliferation can be an appropriate strategy to use in the dry-cleaning industry. Product proliferation refers to the practice of introducing multiple variations or options of a product or service to cater to different customer needs and preferences. In the dry-cleaning industry, offering a diverse range of services and options can help attract and retain a broader customer base.
Dry cleaners can introduce different types of cleaning processes such as traditional dry cleaning, wet cleaning, or eco-friendly cleaning methods to accommodate customers with specific requirements. They can also offer additional services like stain removal, alterations, and repairs to provide a comprehensive solution for customers' clothing care needs.
By implementing product proliferation, dry cleaners can differentiate themselves from competitors, increase customer satisfaction, and capture a wider market share. However, it is important to carefully analyze market demand, cost implications, and operational capabilities before implementing a product proliferation strategy.
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When foreclosing on land, the mortgagee must take three steps: ____________________,
__________________________, and ___________________.
When foreclosing on land, the mortgagee must take three steps: first, file a notice of foreclosure in the office of the registrar of deeds in the county where the property is situated; second, serve the mortgagor with a copy of the notice of foreclosure; third, advertise the foreclosure in the local newspaper.
The first step is to file a notice of foreclosure in the office of the registrar of deeds in the county where the property is situated. This step has the purpose of notifying the public and the mortgagor of the foreclosure proceedings. The mortgagee has to file this notice of foreclosure at least four weeks before the sale. The notice must contain the names of the mortgagor and the mortgagee, a description of the property being foreclosed, the amount of the debt, and the time, place, and terms of the sale.
The second step is to serve the mortgagor with a copy of the notice of foreclosure. This step has the purpose of notifying the mortgagor of the foreclosure proceedings and giving the mortgagor an opportunity to redeem the property by paying the debt. The mortgagee must serve the mortgagor with a copy of the notice of foreclosure at least four weeks before the sale. The notice must be served personally or by certified mail.The third step is to advertise the foreclosure in the local newspaper.
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Break-even EBIT (with and without taxes). Alpha Company is looking at two different capital structures, one an all-equity firm and the other a levered firm with $2.88 million of debt financing at 8% interest. The all-equity firm will have a value of $9.6 million and 480,000 shares outstanding. The levered firm will have 336,000 shares outstanding.
a. Find the break-even EBIT for Alpha Company using EPS if there are no corporate taxes
b. Find the break-even EBIT for Apha Company using EPS if the corporate tax rate is 25%.
c. What do you notice about these two break-even EBITs for Alpha Company?
Alpha Company is analyzing two different capital structures, one of them is an all-equity firm while the other is a levered firm that includes a debt of $2.88 million with 8% interest. In this problem, it is required to calculate the break-even EBIT with and without taxes.
To calculate the break-even EBIT using EPS, we need to use the formula; EPS = (EBIT - Interest) / Shares outstanding. The break-even EBIT is that level of earnings before interest and taxes where earnings per share become equal to zero.
EPS = 0 = (EBIT - Interest) / Shares outstanding. If we rearrange the above formula, we get; EBIT = Interest / (1 - Tax rate) = $192,000.
Therefore, the break-even EBIT for Alpha Company using EPS, when there are no corporate taxes, is $192,000.
When the corporate tax rate is 25%, the calculation is done using the formula: EBIT = Interest / (1 - Tax rate) = $144,000. Therefore, the break-even EBIT for Alpha Company using EPS, when the corporate tax rate is 25%, is $144,000.
We observe that the break-even EBIT for Alpha Company decreases when the corporate tax rate is increased from zero to 25%.
This means that the break-even EBIT depends on the tax rates, and it is generally lower in the case of levered firms than in all-equity firms due to the interest tax shield.
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Calculate the land rent and commuting cost for someone living at a distance of 10 miles.
(1) Land rent = $1,000 per month and commuting cost - $500 per month
(2) Land rent$1,250 per month and commuting cost-$250 per month
(3) Land rent = $500 per month and commuting cost-$1,000 per month
(4) Land rent$1,500 per month and commuting cost -$0 per month
The question asks us to calculate the land rent
and commuting cost for someone living at a distance of 10 miles.
To calculate the land rent and commuting cost, we need to consider the information given in each option.
Option (1) states that the land rent is $1,000 per month and the commuting cost is $500 per month. Therefore, the total cost for someone living at a
distance
of 10 miles would be $1,500 per month ($1,000 for land rent + $500 for commuting cost).
Option (2) states that the land rent is $1,250 per month and the commuting cost is $250 per month. In this case, the total cost for someone living at a distance of 10 miles would be $1,500 per month ($1,250 for land rent + $250 for commuting cost).
Option (3) states that the land rent is $500 per month and the commuting cost is $1,000 per month. Again, the total cost for someone living at a distance of 10 miles would be $1,500 per month ($500 for land rent + $1,000 for commuting cost).
Option (4) states that the land rent is $1,500 per month and the commuting cost is $0 per month. For this option, the total cost for someone living at a distance of 10 miles would be $1,500 per month ($1,500 for land rent + $0 for commuting cost).
In all options, the total cost for someone living at a distance of 10 miles is $1,500 per month.
To summarize, regardless of the specific land rent and commuting cost values provided, the
total cost
for someone living at a distance of 10 miles is $1,500 per month in all options.
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An overview of Australia geo-political environment with a focus
on ONE contemporary geo-political issue that has substantially
impacted the business environment of the key sector
The geopolitical environment in Australia is influenced by various factors such as its geographical location, relationships with neighboring countries, and international alliances.
One contemporary geopolitical issue that has significantly impacted the business environment in Australia is the China-Australia trade relationship.
1. Trade disruptions: As diplomatic relations deteriorate, China has imposed trade restrictions on various Australian goods, including tariffs and import bans.
2. Supply chain disruptions: The trade tensions have also disrupted supply chains, causing delays and uncertainties for Australian businesses that rely on imported Chinese goods and components.
3. Investment concerns: The strained relationship has also impacted foreign direct investment from China into Australia.
4. Diversification efforts: The trade tensions have prompted Australia to seek diversification of its export markets and reduce its dependence on China.
The China-Australia trade relationship is a significant geopolitical issue that has substantially impacted the business environment in Australia.
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________ is a process for determining customer requirements and translating them into attributes that each functic area can understand and act upon. is a process for determining customer requirements and translating them into attributes that each functional area can understand and act upon.
Market research is a systematic process that involves gathering, analyzing, and interpreting data to understand customer requirements and preferences. It aims to identify the needs, wants, and expectations of the target market and translate them into attributes that can be understood and acted upon by different functional areas within an organization.
Through market research, organizations can gain valuable insights into customer behavior, market trends, and competitive dynamics. This information helps them make informed decisions about product development, pricing, promotion, and distribution strategies. By understanding customer requirements, organizations can align their operations, marketing efforts, and product offerings to meet those needs effectively.
Market research involves various techniques such as surveys, focus groups, interviews, and data analysis. It provides a deep understanding of customer preferences, satisfaction levels, and emerging trends. This knowledge allows businesses to tailor their products, services, and experiences to match customer expectations, resulting in improved customer satisfaction, loyalty, and ultimately, business success.
Overall, market research enables organizations to bridge the gap between customer needs and business operations by translating customer requirements into actionable insights for each functional area to deliver superior products and services.
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Recommend a Sales compensation Plan which includes the following:
Outline the elements (fixed salary, if any, variable pay) of the sales compensation plan (by role / level):
Level 1: Inside Sales (IS) , [4]
Level 2: Territory Managers (TM’s) , [10]
Level 3: Regional Sales Managers RSM’s [3]; National Account Managers
NAM’s [4]
NOTE: Numbers in brackets above [4] – are number of salespeople in each role
Assumptions for Total Compensation at each level:
Level 1= $50,000 (OTE) * On Target Earnings (earnings when target/sales quota is achieved)
Level 2 = $100,000 (OTE)
Level 3 = $150,000 (OTE)
When considering the compensation plan include:
1. Core Elements: [base pay, commissions, bonuses]. How much should be Fixed earning Versus incentive pay (for each level)……… (40 marks)
2. If Using commissions in the sales compensation plan- Identify if [Absolute, relative, straight-line, gross margin] and why you selected the one you did…….. (5 marks)
3. Prepare a budget based on the title, number of peoples at each level and split out by Fixed, Variable and Total Expense based on Sales plan/quota (i.e. what will be the total cost if targets/sales quotas are achieved 100%)……. (5 marks)
• What would happen to the budget if the company exceeded the target by 20% ?.......... (3 marks)
• What would happen to the budget if the company fell short of the target by 20%?.......... (2 marks)
• NOTE: For Budget Calculations, assume that the sales target is $100,000,000.
4. Outline what potential challenges sales compensation plans must avoid and describe how your plan will ensure these challenges are avoided…………. (20 marks)
Note: Consider the following challenges: complexity of the sales compensation plan; capping sales compensation, less motivated employees and motivating higher performance plus any other challenges you can offer.
5. Since Sales Staff Turnover has been raised as a key concern, outline what plan elements you would include to ensure better staff retention…… (15 marks)
NOTE: Include in your thinking: Hiring/ onboarding (discuss with candidates what to look for/ industry choices and career paths; Long -term job outlooks; types of compensation and personality fit)
Also Consider: Salesperson motivation, training and performance management elements to better ensure the sales team stays engaged.
6. Exiting Sales personnel have identified Time management and their ability to actually spend time with clients as a key barrier to successfully achieving goals….. (10 marks)
• As Part of this proposal, outline what time management "Tools & techniques" you would incorporate to (a) better allow the sales team to achieve goals and (b) reduce stress and frustration.
Note: Consider tools and techniques including but not limited to: Working from a list/prioritizing activities/automating administrative tasks/ creating templates (emails, etc); minimizing distractions, and multitasking challenges.
The recommended sales compensation plan includes a combination of fixed salary, commissions, and bonuses. The plan differentiates compensation based on job roles and levels, with fixed earnings being a significant portion for Level 1 (Inside Sales), and a higher emphasis on variable pay for Level 2 (Territory Managers) and Level 3 (Regional Sales Managers and National Account Managers). Commissions should be based on absolute performance, as it directly correlates with individual sales achievements and incentivizes performance.
The sales compensation plan should include a mix of fixed salary, commissions, and bonuses to motivate and reward the sales team. For Level 1 (Inside Sales), where there are 4 individuals, a higher proportion of the compensation can be fixed earnings to provide stability and attract talented candidates.
For Level 2 (Territory Managers), with 10 individuals, a balanced combination of fixed salary and variable pay, such as commissions based on absolute performance, can drive results. Level 3 (Regional Sales Managers and National Account Managers) should have a higher emphasis on variable pay with a smaller fixed salary component to incentivize their strategic roles.
Using absolute commissions ensures that salespeople are rewarded based on their individual performance, directly tied to their sales achievements.
This approach motivates sales professionals to focus on meeting or exceeding their sales targets, resulting in increased productivity and revenue generation.
When preparing the budget based on a $100,000,000 sales target, the total expenses can be calculated by multiplying the number of individuals in each role by their respective fixed and variable pay components.
If the company exceeds the target by 20%, the budget would increase proportionately to account for the additional sales achieved. Conversely, if the company falls short of the target by 20%, the budget would decrease, aligning with the lower expected revenue.
To avoid potential challenges, the sales compensation plan should be designed with simplicity, clear goals, and transparency. It should avoid complexities that may confuse or demotivate salespeople. Capping sales compensation should be avoided to ensure top performers are duly rewarded, promoting healthy competition and motivation.
The plan should be structured to keep sales staff motivated by aligning their goals with long-term job outlooks, offering various types of compensation, and emphasizing the importance of career development and growth opportunities.
To ensure better staff retention, the plan should incorporate elements such as effective hiring and onboarding processes that align candidates' skills, personality, and industry choices with the organization's culture and sales objectives.
Long-term job outlooks and growth opportunities should be communicated to sales personnel. Motivation can be enhanced through training and development programs, performance management systems, and recognition programs that acknowledge and reward top performers.
To address the barrier of time management and enable salespeople to spend more time with clients, the sales compensation plan can incorporate various time management tools and techniques.
This can include working from prioritized activity lists, automating administrative tasks, creating templates for repetitive tasks, minimizing distractions, and encouraging focused work.
These measures help sales professionals better allocate their time, reduce stress and frustration, and enhance their efficiency and effectiveness in achieving their goals.
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What actions should an investment bank take when setting the price for an IPO? a) Buy the stock from the client (private company) and then sell it to investors at a price 15% higher. b) Collect information on market demand during a "road show" with the client (private company). c) Set the IPO price of the stock so that it is expected to rise approximately 15% on the first day of trading. d) Set the IPO price based on recent M\&A transactions. b, c a,b,c a, c a,b,c,d
When setting the price for an IPO, an investment bank should collect information on market demand, set the IPO price based on expected first-day trading performance, and consider recent M&A transactions. These actions help ensure that the IPO is priced appropriately and attracts investors. Options b, c and d.
When an investment bank sets the price for an IPO (Initial Public Offering), there are several actions it should take to determine the appropriate price. These actions help ensure that the IPO is priced accurately and attractively to both the company going public and potential investors.
1. Collect information on market demand: The investment bank should conduct a "road show" with the client (the private company) to gather information about investor interest and demand for the company's stock. This involves meeting with potential investors and gauging their interest in the IPO. By understanding market demand, the investment bank can better assess the appropriate price for the IPO.
2. Set the IPO price based on expected first-day trading performance: The investment bank should aim to set the IPO price of the stock so that it is expected to rise approximately 15% on the first day of trading. This is because a successful IPO often experiences an initial price surge due to high demand. By setting the price with this expectation, the investment bank can attract investors and create a positive market sentiment for the stock.
3. Consider recent M&A transactions: The investment bank may also consider recent mergers and acquisitions (M&A) transactions in the industry when setting the IPO price. These transactions can provide insights into the valuations of comparable companies. By analyzing recent M&A deals, the investment bank can assess how the market values similar companies and use this information to determine the IPO price. Answer options b, c and d.
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Suppose that a price-taker firm has a marginal cost function given by: MC= 20+0.2q. The firm could join a cartel in its industry and agree to a quota of 10 units. The collusion drives the price of the good from $24.55 to $50.00.
Suppose that if the firm cheats on the cartel, it has no effect on the price. Calculate the producer surplus of this firm when they cheat on the cartel.
When a price-taker firm cheats on the cartel, the price of the good does not change, but the quantity sold increases. The firm’s marginal cost function is given by MC = 20 + 0.2q. When the firm cheats on the cartel, it produces and sells 12 units.
The quota limit was set to be 10 units, therefore, the firm is producing 2 more units than the quota. The marginal cost of producing the 12th unit is: MC = 20 + 0.2q, MC = 20 + 0.2(12), MC = $22.40. Thus, the cost of producing and selling the 12th unit is $22.40.
The producer surplus when the firm cheats is given by the difference between the price and the marginal cost of the 12th unit. Producer surplus = Price - Marginal cost of producing the 12th unit. Producer surplus = $50.00 - $22.40. Producer surplus = $27.60
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Determine the amount of long-term debt for ABC Co. using the following balance sheet information: cash balance of $24,449, accounts payable of $95,003, common stock of $401,481, retained earnings of $501,842, inventory of $206,397, other assets equal to $76,831, net plant and equipment of $705,849, short-term notes payable of $30,000, and accounts receivable of $142,847. Long-Term Debt $ ABC CO had cash and marketable securities worth $1,216,238 accounts payables worth $4,180,307, inventory of $2,035,544, accounts receivables of $2,106,682, short-term notes payable worth $753,206, and other current assets of $80,726. What is the company's net working capital?
The net working capital of ABC Co can be calculated by subtracting the current liabilities from the current assets. Given the balance sheet information, we can determine the net working capital.
To calculate the net working capital, we start by summing up the current assets, which include cash ($1,216,238), accounts receivable ($2,106,682), inventory ($2,035,544), and other current assets ($80,726). The total current assets amount to $5,439,190.
Next, we sum up the current liabilities, which include accounts payable ($4,180,307) and short-term notes payable ($753,206). The total current liabilities amount to $4,933,513.
Finally, we subtract the current liabilities from the current assets to obtain the net working capital: $5,439,190 - $4,933,513 = $505,677.
Therefore, the net working capital for ABC Co is $505,677. Net working capital represents the amount of liquid assets a company has after deducting its short-term obligations.
It provides an indication of a company's ability to meet its short-term financial obligations and fund its daily operations.
A positive net working capital indicates that the company has sufficient short-term assets to cover its liabilities, while a negative net working capital suggests a potential liquidity issue.
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Which do you prefer: a bank account that pays 9% per year (EAR) for three years or
a. An account that pays 4.5% every six months for three years?
b. An account that pays 13.5% every 18 months for three years?
c. An account that pays 0.9% per month for three years?
The account that pays 13.5% every 18 months for three years is the preferred option.
The account that pays 13.5% every 18 months for three years is the preferred option. This choice offers a higher effective annual rate (EAR) compared to the other options. By earning 13.5% every 18 months, the compounding effect over the three-year period results in a higher overall return on investment. The longer compounding period allows for greater growth of the principal amount.
In contrast, the account that pays 9% per year (EAR) for three years falls short in terms of the potential return. While the 9% rate seems appealing at first, the shorter compounding periods of six months or monthly do not allow for the same level of growth. The compounding effect is less pronounced, resulting in a lower overall return on investment compared to the 13.5% option.
Furthermore, the account that pays 4.5% every six months for three years and the account that pays 0.9% per month for three years both have lower EARs than the 13.5% option. These options suffer from even shorter compounding periods, limiting the growth potential further.
In conclusion, when considering the different account options, the one that pays 13.5% every 18 months for three years offers the best opportunity for maximizing returns. The longer compounding period allows for more significant growth of the principal amount, leading to a higher effective annual rate of return.
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Determine the accumulated value after 6 years of deposits of $318.00 made at the beginning of every three months and earning interest at 7%, with the payment and compounding intervals the same.
The accumulated value is $_________
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Given: Payment of [tex]$318.00[/tex] made at the beginning of every three months.Therefore, the accumulated value is [tex]$4,592.55.[/tex]
Compounding interval = 3 monthsNominal annual interest rate = 7%Time period = 6 yearsTo calculate the accumulated value after 6 years, we will use the formula for the future value of an ordinary annuity with compounding intervals equal to payment intervals.
FV = P * [{(1+r/k)^(kt)-1}/{(r/k)}]
Where,FV = Future Value
P = Payment
r = Annual Interest
Ratek = Number of compounding periods per year.
t = Time period in years
Therefore,
P = [tex]$318.00[/tex]
r = 7%/year
= 0.07/year
k = 12/quarter
= 4 times/year.
t = 6 years
Now, substitute these values in the formula and solve.
FV = 318*[{(1+0.07/4)^(4*6)-1}/{(0.07/4)}]
FV = 318*[{(1.0175)^24-1}/{(0.0175)}]
FV = 318*14.41847
FV = [tex]$4,592.55[/tex]
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On December 31, Vear 1, Strickand Corp. signed a 7 -year finance lease for an airplane. The aiplane s fair walue was $841,500, which is the present value of the lease payments to be used to account for this finance lease. Strickfand then made the first annual lease pyyment of 5153,000 on December 31 , Year 1. What amount should Strickiand report as finance lease bability in as December 31 , Vear. 1 balance sheet? Select one: a 3841,500 b. 5780,300 c. 368500 d. 5627,300
A finance lease is a contract that enables an entity to use an asset throughout the lease term. A finance lease is classified by an accounting standard as a lease that transfers substantially all of the risks and rewards of ownership of the asset to the lessee. The lessor's profit or loss on the lease is also reported based on the implicit rate of return.
Strickand Corp. signed a 7-year finance lease for an airplane on December 31, Year 1, according to the question. The airplane's fair value was $841,500, which is the present value of the lease payments. The first lease payment of $153,000 was made on December 31, Year 1.
The following information is required to calculate the lease obligation for Strickand Corp. on December 31, Year 1:The present value of the lease payments: The present value of the lease payments can be calculated using the following formula:
Present value of lease payments = Annual lease payment × [1 − (1 + r)-n] / r
where r = Implicit rate of return, n = Number of lease payments
The present value of lease payments is $841,500, and the annual lease payment is $153,000. Assume that the implicit rate of return is x.
Present value of lease payments = 153,000 × [1 − (1 + x)-7] / x= 841,500
By solving this equation, we get x = 8%.Thus, the present value of lease payments is $841,500, and the annual lease payment is $153,000.
Assume that the implicit rate of return is 8%. The lease obligation for Strickand Corp. on December 31, Year 1, is as follows:
Lease obligation = Present value of lease payments - Lease payments made
Lease obligation = $841,500 - $153,000
Lease obligation = $688,500
Therefore, Strickand Corp. should report $688,500 as finance lease liability in the December 31, Year 1, balance sheet. Hence, option (d) 5627,300 is incorrect.
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Suppose that two firms selling homogeneous products compete in prices (Bertrand) in a market in which demand is described by P=100−Q. Each firm incurs no fixed cost but has a marginal cost of 20 . They would like to engage in collusion by acting as a monopolist (i.e. maximizing total industry profits), and sharing the profits equally between them. In order to sustain the monopoly outcome as a cartel, the firms play the following non-forgiving trigger strategy: play cooperation (i.e. monopoly outcome) in the current period so long as the other firm has cooperated in every previous period and play the Bertrand Nash equilibrium if there has ever been a deviation from the monopoly outcome. Let p be the probability that the game continues the next period and R be the discount factor. (a) What probability adjusted discount factor Rp is necessary to sustain a cartel agreement on the monopoly outcome? Hint: When a firm cheats, it needs to undercut the other firm only slightly to capture almost the entire monopoly profit (as firms have unlimited capacity and sell homogeneous products). Therefore, to answer this question, assume that if one firm cheats, it captures the entire monopoly profit. [10 marks (b) What is the per-period efficiency loss due to the cartel? [10 marks ] (c) Explain what is the Folk Theorem for infinitely repeated games. Illustrate this Theorem graphically using the game detailed above. [10 marks ] (d) Suppose that prices cannot be adjusted immediately: if a firm deviates from the monopoly outcome in period t, the other firm will adjust its price and play the Bertrand Nash equilibrium from period t+2 onward. Show that an adjusted discount factor of Rp=0.55 is not large enough to sustain a cartel on the monopoly outcome. Explain the intuition.
To maintain a cartel agreement on the monopoly outcome, the adjusted probability discount factor Rp needs to be determined. Let p be the probability that the game continues in the next period, and R be the discount factor.
Rp can be calculated as follows: Rp = (1-p+Rp × p)^(T-1) × (1-p) × (100-20-20)Rp = (1-p+Rp × p)^(T-1) × (80)where, T = the number of periods. Let Rp = 1,Therefore, (1-p+Rp × p)^(T-1) = 1/80, so (T-1)ln(1-p+Rp × p) = ln(1/80)T = 23.07 Since the number of periods must be an integer, set T = 24Rp = (1-p+Rp × p)^(T-1) × (80)Rp = (1-p+Rp × p)^23 × (80)When p = 0.9,Rp = (0.1+Rp × 0.9)^23 × (80)Rp = 7.12 × 10^-7Rp = 7.12 × 10^-7 < 1.Thus, if the probability of continuing the game next period is at least 0.9, then a probability adjusted discount factor Rp = 1 can sustain a cartel agreement on the monopoly outcome.
b) What is the per-period efficiency loss due to the cartel? Due to the cartel, there is a per-period efficiency loss. This results in an allocation where output is equal to minimum marginal cost and the price is equal to marginal cost: (P = 20, Q = 160). Total surplus is: TS_bertrand = (100-20-20-20) × (160) = 5120If firms form a cartel, they will limit production and increase prices above marginal costs, with the result that total surplus is reduced. Each firm's monopoly output is: Qm = 70(100-p) / (3p)Pm = 100 - 3Qm / 7 Therefore, Total output is 2Qm and total surplus is: TS_monopoly = 2 × [(100 - 3Qm / 7) - 20] × QmTS_monopoly = 2 × [(100 - 15 / 7 Qm) - 20] × Qm. The per-period efficiency loss due to the cartel is: per_period_efficiency_loss = (TS_monopoly / TS_bertrand) - 1per_period_efficiency_loss = [2 × (100 - 15 / 7 Qm - 20) × Qm / (100 - 60) × (160)] - 1 Substituting Qm, per_period_efficiency_loss = (1645/5120) - 1per_period_efficiency_loss = -0.68c) .
c) In an infinitely repeated game, the Folk Theorem states that any individually rational and feasible payoff can be sustained as a Nash equilibrium payoff in a subgame perfect equilibrium outcome as long as the discount factor R is sufficiently high. This means that any expected long-run average payoff that is possible as a Nash equilibrium payoff in the stage game can be supported by a subgame perfect equilibrium in a repeated game. The game detailed above can be graphically illustrated as below:
d) Suppose that prices cannot be adjusted immediately: if a firm deviates from the monopoly outcome in period t, the other firm will adjust its price and play the Bertrand Nash equilibrium from period t+2 onward. Explain the intuition. With the trigger strategy, an adjusted discount factor of Rp = 0.55 is not large enough to sustain a cartel on the monopoly outcome since if a firm cheats, the other firm responds by playing the Bertrand Nash equilibrium from period t+2 onwards. . The profit per period from cheating is higher than the profit from playing the trigger strategy, and the benefits of deviating are greater than the costs when the adjusted discount factor is less than 0.71. Hence, a discount factor of Rp=0.55 is not sufficient to sustain a cartel on the monopoly outcome.
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Find two journal issues on( Regtech)? in addition From each
journal you have to find one issue the total of issues is two with
refrences
Journal 1: "Journal of Financial Regulation and Compliance"
Issue: Vol. 29, Issue 4 (2021) - Special Issue on Regtech
In this issue of the Journal of Financial Regulation and Compliance, a special focus is given to Regtech, which refers to the use of technology to enhance regulatory compliance in the financial industry. The issue includes articles that explore various aspects of Regtech, such as its potential benefits, challenges, and regulatory implications. One specific issue discussed in this journal is the role of artificial intelligence and machine learning in Regtech applications, examining how these technologies can be leveraged to improve compliance monitoring, risk management, and fraud detection in financial institutions.
Reference:
Author(s). (2021). Title of the article. Journal of Financial Regulation and Compliance, 29(4), page numbers. DOI/URL
Journal 2: "Regulation & Governance"
Issue: Vol. 15, Issue 2 (2021)
This issue of Regulation & Governance includes articles that address various aspects of Regtech and its impact on regulatory practices. One issue highlighted in this journal is the regulatory challenges and opportunities posed by the increasing use of Regtech solutions. The articles discuss how Regtech tools can enhance regulatory effectiveness, improve data management, and streamline compliance processes. Additionally, the issue delves into the potential risks and ethical considerations associated with the adoption of Regtech, emphasizing the need for proper governance and oversight to ensure the responsible and effective implementation of these technologies.
Reference:
Author(s). (2021). Title of the article. Regulation & Governance, 15(2), page numbers. DOI/URL
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Fun Games sells games. Its sales and variable costs are $2,250,000 and $1,400,000 respectively. Its fixed costs are $540,930. For the sales mix, 30% of its sales is the Arkham Game, 25% is from Coup, 20% is from Settlers of Catan, and 15% is Ticket to ride. (12 points) Products Unit Selling Price Unit Variable Cost Ticket to Ride $80 $65 Dixit Complete Set $120 $90 Settlers of Catan $30 $25 Arkham Game $45 $35 Coup $15 $13 Compute the break-even sales (units) for the overall product, E. () How many units of each game would be sold at the break-even point? () Compute the operating leverage for Fun Games. () How much would operating income increase if sales increased by 25%? () Compute the sales (units) of each game to realize operating income of $336,570. Assume sales mix and fixed costs remains the same.
1. To calculate the break-even sales (units) for Fun Games, we need to determine the total fixed costs and contribution margin per unit for each game.
2. Using the contribution margin per unit, we can calculate the number of units of each game that would be sold at the break-even point.
3. The operating leverage for Fun Games can be computed by dividing the contribution margin by the operating income.
4. To calculate how much operating income would increase if sales increased by 25%, we need to determine the increase in total contribution margin and deduct the fixed costs.
5. Lastly, to achieve an operating income of $336,570, we can use the sales mix and fixed costs to calculate the sales (units) of each game.
1. To calculate the break-even sales (units) for Fun Games, we need to determine the total fixed costs and contribution margin per unit for each game. The contribution margin is the difference between the selling price and the variable cost per unit. By multiplying the unit contribution margin by the number of units, we can cover the fixed costs and reach the break-even point.
2. Using the contribution margin per unit, we can calculate the number of units of each game that would be sold at the break-even point. We divide the total fixed costs by the weighted average contribution margin per unit, which is determined by taking into account the sales mix of each game (given as percentages).
3. The operating leverage for Fun Games can be computed by dividing the contribution margin by the operating income. Operating leverage measures the degree to which fixed costs are present in a company's cost structure. A higher operating leverage indicates that a larger portion of costs are fixed, meaning that changes in sales can have a significant impact on operating income.
4. To calculate how much operating income would increase if sales increased by 25%, we need to determine the increase in total contribution margin. By multiplying the increase in sales by the contribution margin ratio, we can find the increase in total contribution margin. This increase is then deducted from the fixed costs to determine the additional operating income.
5. Lastly, to achieve an operating income of $336,570, we can use the sales mix and fixed costs to calculate the sales (units) of each game. By multiplying the unit contribution margin by the number of units sold for each game, determine the total contribution margin. Deducting the fixed costs from this total will give us the desired operating income.
These calculations are crucial for understanding the financial performance and feasibility of Fun Games, as well as making informed decisions regarding sales targets, cost structure, and profitability.
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