TechMedia, Inc. is a U.S. firm that is planning to build a new production facility in either the USA or China. The initial cost to build the facility will be $8.2 million if built in the USA or ¥45 million if built in China. In either location, the project will require an initial investment of $225,000 in net working capital. Net working capital at the end of each of years 1 through 4 will be $65,000. Net working capital will be $0 at the end of the fifth (final) year of the project. The current exchange rate between the two currencies is 6.75 ¥/$. The risk-free rate in the U.S. is 0.8% and the risk-free rate in China is 6.1%. TechMedia, Inc. pays a 35% tax rate on its taxable income. The firm’s current and target debt-equity ratio is 0.6. Its cost of debt is 6.5% and its cost of equity is 11.5%. The facility will be fully depreciated over five years (straight line) with no salvage value. The facility is expected to impact the firm’s operating revenues and expenses as shown below. USA Location China Location Year Additional Revenue ($) Additional Expense ($) Additional Revenue (¥) Additional Expense (¥) 1 $4,000,000 $1,500,000 ¥20,000,000 ¥7,000,000 2 $4,000,000 $1,500,000 ¥25,000,000 ¥8,000,000 3 $5,000,000 $1,750,000 ¥30,000,000 ¥9,000,000 4 $6,500,000 $2,000,000 ¥35,000,000 ¥9,000,000 5 $6,500,000 $2,000,000 ¥40,000,000 ¥8,000,000 Which location, if either, should TechMedia, Inc. choose?
In: Finance
Rajab has a bookstore near a sea shore, which is insured for €150,000 under a commercial property insurance policy. The policy contains an 80 percent coinsurance clause. Rajab’s bookstore suffered a loss worth €100,000 due to tsunami. If the replacement cost of the bookstore at the time of loss is €250,000, how much will he collect from his insurer? Rajab will collect €Answer for the loss from his insurer.
In: Finance
Company Z had the following transactions in its first year of operations:
(1) On January 15, purchased 5,000 units of inventory for $20 each
(2) On March 1, purchased 10,000 units of inventory for $22 each
(3) On March 30, sold 7,000 units of inventory for $48 each
(4) On June 20, purchased 9,000 units of inventory for $25 each
(5) On August 10, sold 12,000 units of inventory for $50 each
(6) On September 3, sold 1,000 units of inventory $49 each
Company Z records transactions using a perpetual system. Calculate the cost of goods sold and ending inventory using (1) average cost, (2) FIFO, and (3) LIFO.
Company Z asks you to advise them on which inventory method to use. What method would you choose if the company wants to take out a loan from a bank in the near future that requires the company to meet a large threshold for its current assets’ value? What method would you choose if the company has a near-term investment opportunity that requires more cash on hand? Explain your answers.
In: Accounting
There is a walled city that is circular with radius R. Assume that when the population if this city is N, the benefit per person is ((π(R^2))/N)^2. The cost of defending is given by (b2πR)/N. Walls for defense were already built a long time ago, so people in the city do not have to bear the cost of building walls. Since there is a risk of epidemic, its cost is (C(N/πr)^2). Because this city still has much capacity, the government can control the population of the city by accepting immigrants or increasing birth rates.
a. Describe the net social benefit (NSB) that the government wants to maximize.
b. Find the optimal population.
In: Economics
Describe the externalities associated with a football stadium
compared with
an amusement park. Which would have greater positive externalities?
Which
would have greater negative externalities?
In: Economics
Please answer each question in 350-500 words.
If you were running the organization(Hotel Management Group), what changes would you make and why?
In: Operations Management
1-Explain the difference between promotion and advertising.
2-Why might it make sense for a hotel chain to shift some of its advertising dollars to public relations?
In: Operations Management
Please answer each question in 350-500 words.
If you were running the organization(Hotel Management Group), what changes would you make and why?
In: Operations Management
The following linear regression model can be used to predict ticket sales at a popular water park (the correlation is significant).
Ticket sales per hour = -631.25 + 11.25(current temperature in °F)
Choose the statement that best reflects the meaning of the slope in this context.
Group of answer choices
The slope is slippery.
The slope tells us that a one degree increase in temperature is associated with an average increase in ticket sales of 11.25 tickets.
The slope tells us that if ticket sales are decreasing there must have been a drop in temperature.
The slope tells us that high temperatures are causing more people to buy tickets to the water park.
In: Statistics and Probability
A study of the career paths of hotel general managers sent questionnaires to an SRS of 250 hotels belonging to major U.S. hotel chains. There were 129 responses. The average time these 129 general managers had spent with their current company was 10.33 years. (Take it as known that the standard deviation of time with the company for all general managers is 2.1 years.)
(a) Find the margin of error for an 85% confidence interval to estimate the mean time a general manager had spent with their current company: _____ years
(b) Find the margin of error for a 99% confidence interval to estimate the mean time a general manager had spent with their current company: _____ years
In: Statistics and Probability