Many fast food restaurant chains like McDonalds and others have some stores which are directly owned by the company (McDonalds) which hires a manager and staff to manage the restaurants, and some stores that they sell a franchise to an outside company/individual who operates the restaurants and pays the company (McDonalds) a franchise fee and keeps the rest of the profits. The franchise fee will have to be paid no matter what the profits of the restaurant may be.
(a) What is the principal - agent problem in the company owned restaurants? Please explain.
(b) What is the principal – agent problem in the franchised restaurant? Please explain. You may assume that the owner is still McDonalds as McDonalds can cancel the franchise agreement if they want to, in which case the former franchisee will no longer be able to use the McDonalds brand to sell their food.
(c) In which case will the principal-agent problem be more severe? Please explain.
In: Economics
M&T Air was founded 10 years ago. The company has manufactured and sold light airplanes over this period, and the company’s products have received high reviews for safety and reliability. The company has a niche market in that it sells primarily to individuals who own and fly their own airplanes. The company has two models: The Birdie, which sells for $53,000, and the Eagle, which sells for $78,000. S&S Air is not publicly traded, but the company needs new funds for investment opportunities. Mark Sexton and Todd Story, the owners of S&S Air, have decided to expand their operations. They instructed their newly hired financial analyst, Chris Guthrie, to enlist an underwriter to help sell $20 million in new 10-year bonds to finance construction. Chris has entered into discussions with Renata Harper, an underwriter from the firm of Crowe & Mallard, about which bond features S&S Air should consider and what coupon rate the issue will likely have.
Although Chris is aware of the bond features, he is uncertain as to the costs and benefits of some features, so he isn't clear on how each feature would affect the coupon rate of the bond issue. You are Renata's assistant, and she has asked you to prepare a memo to Chris describing the effect of each of the following bond features on the coupon rate of the bond. She would also like you to list any advantages or disadvantages of each feature.
a. The security of the bond—that is, whether the bond has
collateral.
b. The seniority of the bond.
c. The presence of a sinking fund.
d. A call provision with specified call dates and call
prices.
e. A deferred call accompanying the preceding call
provision.
f. A floating rate coupon.
In: Finance
S&S Air was founded 10 years ago. The company has manufactured and sold light airplanes over this period, and the company’s products have received high reviews for safety and reliability. The company has a niche market in that it sells primarily to individuals who own and fly their own airplanes. The company has two models: The Birdie, which sells for $53,000, and the Eagle, which sells for $78,000. S&S Air is not publicly traded, but the company needs new funds for investment opportunities. Mark Sexton and Todd Story, the owners of S&S Air, have decided to expand their operations. They instructed their newly hired financial analyst, Chris Guthrie, to enlist an underwriter to help sell $20 million in new 10-year bonds to finance construction. Chris has entered into discussions with Renata Harper, an underwriter from the firm of Crowe & Mallard, about which bond features S&S Air should consider and what coupon rate the issue will likely have. Although Chris is aware of the bond features, he is uncertain as to the costs and benefits of some features, so he isn't clear on how each feature would affect the coupon rate of the bond issue. You are Renata's assistant, and she has asked you to prepare a memo to Chris describing the effect of each of the following bond features on the coupon rate of the bond. She would also like you to list any advantages or disadvantages of each feature.
a. The security of the bond—that is, whether the bond has collateral.
b. The seniority of the bond.
c. The presence of a sinking fund.
d. A call provision with specified call dates and call prices.
e. A deferred call accompanying the preceding call provision.
f. A floating rate coupon.
In: Finance
Briefly describe the history of healthcare delivery and health insurance. Describe who participates in the system. Discuss the strengths and weaknesses of the US healthcare system.
In: Computer Science
In: Accounting
Today is December 31, 2018. Today, we started the Hilo Tourism Company. To start the business, the owners have invested $25,000 into the business from their own pocket. In addition, the company borrowed $15,000 at a 10 percent simple interest rate. Thus, the company has $40,000 to work with. The company will use $10,000 of this money for operating cash. The company will use the remaining money to purchase a tourism van for $30,000 on December 31st. The company will pay interest only on the loan. The Hilo Tourism Company will contract our services to Royal Cruise Line who has agreed to pay us $160,000 in the year 2019 for providing tours to high-class customers from the Hilo dock to the Volcano. All sales are cash sales. Hilo Tourism Company will have the following expenses in the year 2019. The van will wear out by $5,000 per year. Insurance will cost $12,000 per year. It will cost $20,000 per year for the driver and $16,000 per year for the tour guide. Fuel and repairs combined will cost $40,000 per year. All operating expenses, except depreciation, are cash operating expenses. The company is in a 10 percent tax bracket. One half of the firm’s 2019 net income will be paid out to the owners as a dividend and the other half of the firm’s net income will be retained within the firm. Create a Statement of Cash Flows for the year ending, December 31, 2019. CREATE ONLY A STATEMENT OF CASH FLOWS TO ANSWER THIS QUESTION. I WILL ASK YOU TO PRODUCE ADDITIONAL STATEMENTS IN OTHER QUESTIONS
In: Finance
In: Biology
Which of ollow indi tax return? Should any of these individuals file a return even if filing is no t required? Why or why not? a. Patricia, age 19, is a self-employed single individual with gross income of $5,200 from an unincorporated business. Business expenses amot1nted to $4,900. b. Mike is single and is 67 years old. His gross income from wages was $10,800. c. Ronald is a dependent child under age 19 who received $6,800 in wages from a part-time job. d. Sam is married and files a joint return with his spouse, Lana. Both Sam and Lana are 67 years old. Their combined gross income was $24,250. e . Quinn, age 20, is a full-time college student who is claimed as a dependent by his parents. Quinn reports taxable interest and dividends of $2,500.
In: Accounting
SCENARIO
Textbooks R Us is a small business that was set up 20 years ago to facilitate the physical sale of second-hand textbooks for University students. They would now like to change their business model to an e-business model where they only sell their books online. Its business will run entirely on the Internet and students will be able to sell and purchase books via their website. This will allow the business to increase their market as they will not be restricted to selling books at the one University campus. Textbooks R Us has tasked your team to come up with the requirements for their new system.
Sellers must have an account with Textbooks R Us to sell any books via their website. To create an account, sellers must register and provide various details when setting up their account. These details include their physical address, postal address, name, telephone number, a current email address and banking details for the receipt of money after their books have been sold.
Buyers must also open an account if they wish to purchase a textbook, however they can search for books on the website without having an account. To create an account, buyers must register and provide various details when setting up their account. These details include their physical address, postal address, name, telephone number, a current email address and credit card details. Buyers can purchase as many books as desired in the same transaction or through separate transactions. Books can be purchased via credit card or PayPal.
A seller can list books on the system through completing an online form. The details which must be provided on the form include information on the book to be sold such as: its category, title, author, year of publication, condition and the asking price. An option to upload a photo of the books is also available for buyers to see the condition of the book. A seller may list as many books as desired. A seller may also remove books for sale if they wish or amend the sale price.
The system will maintain a list of all books for buyers to use a search engine to search for books of interest by title, author, category, and keyword.
The system will provide secure access for all users and information is to be maintained on secure servers. Sensitive financial information and private user details are not to be disclosed to other users of the system.
When a purchase is made, Textbooks R Us will send an e-mail notice and/or a text message to the seller of the book that was chosen as well as payment information. The seller will have the option of choosing which method of notification they prefer when setting up their account, i.e. via email and/or via text message to their mobile phone. The system will also mark the book as sold and maintain an open order status until it receives notice that the book has been shipped by the seller.
Once the seller has received the notification that the book has been sold, they must notify the buyer via their chosen notification method (email and/or text message) within 48 hours that the purchase has been accepted and they must ship the order within 48 hours of sending the notification to the buyer. The seller will then send a notification to the buyer (again via their preferred method) and to Textbooks R Us when the shipment is made.
Upon receiving notice that the shipment has been made,Textbooks R Us will change the status of the book order to a shipped status. Buyers will have a 30-day period to receive a refund from Textbooks R Us if the book does not arrive, or to return the book if it does not meet the advertised criteria. Once this 30-day period has lapsed, i.e. the book has been in a shipped status for 30 days, the money received for the book will be transferred to the seller’s nominated account by Textbooks R Us and the book’s order status will be changed to sold.
After receiving an ordered book, buyers will have the option of entering a rating for the seller to indicate a measure on several factors regarding their transaction with the seller. Some sellers have been very active using the current business model and this feature will provide them with an important indicator to other potential buyers.
USE CASES
Identify all the actors who will be using the system.
Prepare a table containing all use cases and a brief use case description (1-2 sentences) for each use case.
Draw a use case diagram for the system representing the actors and use cases identified.
In: Operations Management
Suppose there are two types of people in an insurance market, high and low risks. High risk people are sick 10% of the time and low risk people are sick 5% of the time. The probability any individual is high risk is 40%. Upon getting sick, an individual loses $10,000 in medical expenses. a) What are the actuarially fair premiums for the types? b) If the insurer cannot distinguish between the two types, but the two individuals know their types, then what will be the equilibrium premium? c) Given your answer to part (b), who will exit the market and who will remain in the market? What do we call this? d) What will the premium be if the individuals do not know their type?
In: Economics