Questions
The Scenario Imagine that you have graduated and are working for a large manufacturer in the...

The Scenario Imagine that you have graduated and are working for a large manufacturer in the United States. One of your firm’s largest departments is Customer Service. Approximately 475 people located in 5 cities in the United States are employed in the Customer Service Department. Upper management in your firm is considering relocating at least half of the positions (not the people) to India. If the firm chooses to relocate these jobs in Customer Service, approximately 250 people in the United States will be laid off. However, the company will be able to cut the costs of operating the Customer Service Department by 1/3. This is a significant saving for the firm! You have been appointed to a cross-functional team of managers to make three recommendations regarding this proposal. There are 5 managers on the team. They come from the following departments: Accounting, Human Resources, Customer Service, Production and Marketing. Your answer must be divided into 3 clearly marked sections: Critical Thinking; Business Ethics; Team Building 1. Did you offer a specific principle? 2. Did you explain an approach rather than a solution? 3. Is the principle clearly stated? 4. Did you elaborate on how the principle would be used?

In: Economics

Suppose steel manufacturers in the United States earned a rate of return on capital of 4%....

Suppose steel manufacturers in the United States earned a rate of return on capital of 4%. Pretend that there are many producers of steels, steel is a homogenous product and there is free entry an exit into the steel industry. Further suppose that the average rate of return on capital for ALL manufacturing was 10%. a) What would you expect to happen to the number of firms in the steel industry? Explain why. Now, suppose that the US bans all imports of steel into the United States. b) What would you expect to happen to the price of steel in the US? Explain why. What would you expect to happen to the profitability of steel manufacturers in the US? Explain why. What would you expect to happen to the number of steel manufacturers in the US? Explain why. Now, suppose after a few years, the ban on the imports of steel into the United States is lifted. c) What would you expect to happen to the price of steel in the US? Explain why. What would you expect to happen to the profitability of steel manufacturers in the US? Explain why. What would you expect to happen to the number of steel manufacturers in the US? Explain why.

In: Economics

2. Please read the following excerpt from James Galbraith’s The Predator State (Free Press, 2008: pp....

2. Please read the following excerpt from James Galbraith’s The Predator State
(Free Press, 2008: pp. 197-200).
QUOTE
Is the United States a fully open economy? Well, of course it is: it is certainly
fully open to trade and capital, it certainly trades in a highly unbalanced way, and it
certainly borrows on a phenomenal scale. And yet precisely because the United States
operates in global capital markets in a way open to no other country, the rules as they
apply to the United States are different from what they are for anyone else. To put it
crudely, the United States is not subject to the normal rules of the world system. It
does not have to accept the terms and discipline of the capital markets. Rather, it is in
a position, up to a point, to make the rules, impose them on others, and exempt itself
from their harshest implementation. This is hardly fair, to be sure. But it is the way the
system has worked.
How did the United States get into this position?
The answer goes back to the dominant fnancial role the United States played in both world wars and in the construction of the postwar fnancial order and the cold
war. In World Wars I and II, the United States was far more than a military ally: it was
also the “arsenal of democracy,” and in addition to that, democracy’s banker. Both wars
strengthened America’s fnancial position, moving the world’s stock of gold to our
shores and ultimately permitting us to dictate the terms of the postwar monetary
order. As agreed at Bretton Woods in 1944, that order would be centered on the
dollar as the anchor currency, to which the value of all the others would be pegged.
Underlying that agreement, there was an implicit bargain between the United
States and the anticommunist, democratic governments of Europe and (eventually)
Japan. We provided and would continue to provide military security, including the
nuclear umbrella represented by U.S. strategic forces. (At the beginning, we would also
supply steel, machinery, and credit to get European and Japanese recovery under way.)
Those countries in turn accepted a subordinate diplomatic and fnancial role, and
continued to accept it long after their own economies had fully recovered from the
war. Indeed, they continued to accept it long after they had gone on to create new
areas of industrial and technological advantage, even dominance on world markets, and
despite the fact that in the 1970s, their currencies, especially the yen and the mark,
were in increasing demand on world markets. In much of the developing world as well,
particularly through Latin America, Africa, and Southeast Asia, friendly governments –
anticommunist but not always democratic – put themselves under American
protection. And the United States assisted them in repressing both external subversion
and internal dissent, whether real or imagined, legitimate or otherwise. This bargain –
security for seigniorage, defense for dollars, in effect – defned the global economics of
the cold war.
Thus for a half-century the United States led a world community centered on
a common defense of managed capitalism…The American trade defcit is nothing
more, or less, than the normal consequence of that system, and particularly what
emerged after the formal mechanisms of international fnancial management and
exchange rate stabilization were abandoned between 1971 and 1973.
Bretton Woods still partook of the idea, rooted in ancient practice and folk
wisdom, that every country in the world had to run a balanced current account – a
rough parity of imports and exports – over time. Under the discipline of the gold standard, foreign accounts before 1913 had to be settled in precious metal. If you ran a
defcit for too long, gold would drain away. Eventually your domestic prices would fall
(because there was not enough gold in the system to support the economy at current
prices) or your domestic output would collapse (because credit could not be had at
any cost), or you would fnd that you could not pay your import bills on your
contractual debts (often, if you were a small country in debt to a larger one, a cause for
war). Bretton Woods created a peaceful and orderly means for easing those trade
adjustments that might be necessary from time to time, but it did not obviate the need
to adjust. Faced with a defcit, a country could in the frst instance borrow from the
IMF. If the defcit proved intractable, it could devalue – adjusting the parities of the
world currency system. Eventually, the theory had it, a general pattern of trade balance
would return.
By putting the dollar at the center of the system, Bretton Woods had
removed the possibility that the dollar could devalue, and at the same time insulated
the United States alone from the need to adjust to a defcit in our trade. But not
entirely. As noted, central banks retained the option of demanding trade settlement in
gold. And as tensions within the system built in the 1960s, notably over Vietnam, they
increasingly did so.
The contradiction in the system for the United States was that unlike other
countries, it could not adjust its trade defcit using devaluation; devaluation by the
currency to which other currencies were tied was a system-breaking move. Thus if
other countries were not prepared to tolerate U.S. defcits at high employment, the
United States could either retreat from full employment at home or break the system.
In 1969-1970, Richard Nixon had tried the frst course of action, to near political
disaster. In 1971-1972, he took the second course, ensuring his own reelection at the
expense of plunging the world economy into turmoil. For a time, in consequence, the
future of the world fnancial system was very uncertain; many thought that the dollar
might fail and be replaced by some combination of currencies, including the German
deutsche mark, the Japanese yen, the British pound and the Swiss franc. The entire
decade from that point forward was fnancially unstable, and the United States itself
paid part of the price in the form of infation and periodic recessions.
Reagan’s macroeconomics ended the uncertainty – and resolved the contradiction. And although monetarism and supply-side economics wrecked major
sectors of American industry, drove up the rate of unemployment, and made the nation
far more unequal, they also fundamentally reestablished American fnancial power. The
same high interest rates that did so much damage to Ohio and Michigan were even
more devastating outside the country than within. And, in the relations between the
United States and the rest of the world, they turned the fnancial tide, creating a new
dollar-based system that became the foundation of the world economy. From a purely
national perspective, this would lead to huge benefts to the United States, at everyone
else’s expense. For now, most countries came to protect themselves against the
worldwide fnancial instability, itself often generated from within the United States, by
holding fnancial reserves, which consisted mainly of U.S. Treasury bonds.
Now the Prometheus was truly unbound; even the largely self-imposed
macroeconomic and trade discipline of the Bretton Woods period became a thing of
the past. The post-1981 position of the dollar meant not only that Americans could
import much more than we export; actually, it meant that we must import more than
we export. We routinely cover the difference with nothing more than a note and a
promise to pay interest down the road. The extent to which we can do this – the
extent to which we must do this --- is determined, entirely and exactly, by the
willingness and desire of other countries to hold the bonds. As the world economy
grew, and particularly as China emerged as a global fnancial player with reasons of its
own for holding dollar bonds, that extent appeared to have few practical limits.
As a result, the United States has been running trade defcits continuously.
And every year as the world economy grows, they grow larger. At this writing, they are
greater than 6 percent of annual GDP, more than $800 billion. To repeat, the main
reason for this is that other countries, for reasons of their own, have wanted to anchor
their fnancial portfolios in U. S. Treasury bonds. We could not do it otherwise, and we cannot avoid doing it, given those desires.

Why does Galbraith write that “the rules as they apply to the United States are
different from what they are for anyone else?”

 Galbraith describes the classical gold standard and the workings of the price-specie
flow model. Where does he do that?

 According to Galbraith, what replaced the gold standard as the international
monetary system?

What historical factors led to the current system? How does it
operate?

 Galbraith writes in the last paragraph quoted that “other countries, for reasons of
their own, have wanted to anchor their financial portfolios in U. S. Treasury bonds.”
What countries do you think he has in mind? What do you suppose are some of the
reasons of their own? Why does this choice by other countries mean that the U.S.
“cannot avoid” running a trade deficit?

In: Economics

2. Consider the following data on salaries and experience. Persons 2,4,6,8,and 9 have MBA degrees. All...

2. Consider the following data on salaries and experience. Persons 2,4,6,8,and 9 have MBA degrees. All others only have undergraduate degrees.

  1. Calculate the regression of Salary on Experience within a model that controls for whether a person has an MBA or not.

b. Print the data set that allows you to do this regression. Sketch the graph the estimated regression that clearly indicates the impact of a MBA degree on Salary.

c. What is the market value of the MBA degree?

Person           Salary              Experience

1                   $130,468            10 Years

2                       62,250              1

3                       50,000              2.3

4                     140,000              9

5                     110,000              8

6                      80,050              2.8

7                      95,772              7

8                     110,000              6

9                       87,752              4.2

10                     79,290              5

In: Statistics and Probability

Question 2 (15 marks) Gamma Ltd. acquired a tract of land with a building for $600,000....

Question 2 Gamma Ltd. acquired a tract of land with a building for $600,000. The closing statement indicated that the land’s assessed tax value was $400,000 and the building’s value was $200,000. The land was acquired as a site for Gamma's new office building and immediately after acquisition the building was demolished at a cost of $60,000. Gamma Ltd. constructed a new building, for $900,000 plus the following costs: Building design $ 20,000 Construction foreman salary 40,000 Imputed interest on retained earnings used during construction 30,000 Since Gamma has no debt, and a surplus of cash, all amounts were paid with cash.

a) Calculate the cost of the land. b) Calculate the cost of the building. c) Assume your answer to b) above was $1,000,000. Gamma Ltd. has a December 31 yearend. The building was completed and occupied on September 30, 2020. The estimated useful life of the building is 20 years, the residual value is estimated to be $100,000, and double-declining-balance depreciation is used. Calculate depreciation expense for 2020 and 2021. d) Assume your answer to b) above was $1,000,000. The building was completed and occupied on January 1, 2020. The estimated useful life of the building is 20 years and the residual value is estimated to be $100,000. On January 1, 2020, Gamma received a government grant of $400,000 to assist in the cost of the building. Prepare the journal entries required during 2020 related to the government grant and depreciation of the building. Assume straight-line amortization.

In: Accounting

Your friend is the accountant for Jackrabbit Inc., a computer server startup company. The friend asks...

Your friend is the accountant for Jackrabbit Inc., a computer server startup company. The friend asks you if accelerated depreciation would help Jackrabbit reduce the tax liability on a recent hardware purchase. What are some advantages of accelerated depreciation as compared to a straight-line method, and which method would benefit a startup company like Jackrabbit?

In: Accounting

A resort spa services fund required 324,284 USD. These costs will be funded through a variety...

A resort spa services fund required 324,284 USD. These costs will be funded through a variety of sources, including long-term loan, and personal investment from the owner.

Start-up

Requirements

Startup Expenses

Legal & Registration

$        11,000

Stationaries Etc

$          2,000

Broucher

$          5,000

Insurance

$          7,000

Website & Online Access

$          3,000

Expensed Equipment (sound system,hardware,software)

$      180,000

Others

$          5,000

Total Expenses

$      213,000

Startup Assets

Cash Required

$        50,254

Startup Inventory

$        40,000

Other Current Assets

$        21,000

Long Term Assets

$                -  

Total Assets

$      111,254

Total Requirements

$      324,284

How to Show up the investment from the Owner 200,000$ ?

In: Finance

Do you want to own your own candy store? Wow! With some interest in running your...

Do you want to own your own candy store? Wow! With some interest in running your own business and a decent credit rating, you can probably get a bank loan on startup costs for franchises such as Candy Express, The Fudge Company, Karmel Corn, and Rocky Mountain Chocolate Factory. Startup costs (in thousands of dollars) for a random sample of candy stores are given below. Assume that the population of x values has an approximately normal distribution.

96 173 130 92 75 94 116 100 85

(a) Use a calculator with mean and sample standard deviation keys to find the sample mean startup cost x and sample standard deviation s. (Round your answers to one decimal place.)

x = thousand dollars
s = thousand dollars


(b) Find a 90% confidence interval for the population average startup costs ? for candy store franchises. (Round your answers to one decimal place.)

lower limit     thousand dollars
upper limit     thousand dollars

In: Statistics and Probability

The Wall Street Journal reported that the age at first startup for 25% of entrepreneurs was...

The Wall Street Journal reported that the age at first startup for 25% of entrepreneurs was 29 years of age or less and the age at first startup for 75% of entrepreneurs was 30 years of age or more. (a) Suppose a sample of 200 entrepreneurs will be taken to learn about the most important qualities of entrepreneurs. Show the sampling distribution of p where p is the sample proportion of entrepreneurs whose first startup was at 29 years of age or less. If required, round your answers to four decimal places. np = n(1-p) = E(p) = σ(p) = (b) Suppose a sample of 200 entrepreneurs will be taken to learn about the most important qualities of entrepreneurs. Show the sampling distribution of p where p is now the sample proportion of entrepreneurs whose first startup was at 30 years of age or more. If required, round your answers to four decimal places. np = n(1-p) = E(p) = σ(p) = (c) Are the standard errors of the sampling distributions different in parts (a) and (b)?

In: Statistics and Probability

In an article in the Journal of Advertising, Weinberger and Spotts compare the use of humor...

In an article in the Journal of Advertising, Weinberger and Spotts compare the use of humor in television ads in the United States and the United Kingdom. They found that a substantially greater percentage of U.K. ads use humor. (a) Suppose that a random sample of 366 television ads in the United Kingdom reveals that 141 of these ads use humor. Find a point estimate of and a 95 percent confidence interval for the proportion of all U.K. television ads that use humor. (Round your answers to 3 decimal places.) pˆ = The 95 percent confidence interval is [ , ]. (b) Suppose a random sample of 455 television ads in the United States reveals that 122 of these ads use humor. Find a point estimate of and a 95 percent confidence interval for the proportion of all U.S. television ads that use humor. (Round your answers to 3 decimal places.) pˆ = The 95 percent confidence interval is [ , ]. (c) Do the confidence intervals you computed in parts a and b suggest that a greater percentage of U.K. ads use humor? , the U.K. 95 percent confidence interval is the maximum value in the confidence interval for the U.S.

In: Math