In the following situations, decide whether you would use a personal interview, telephone survey, or self-administered questionnaire. Give you reasons. a. A survey of the residents of a new subdivision on why they happened to select that area in which to live. You also wish to secure some information about what they like and don not like about life in the subdivision. b. A poll of students at Metro University on their preferences among three candidates who are running for president of the student government. c. A survey of 58 wholesale grocery companies scattered over the eastern United States, on their personnel management policies for warehouse personnel. d. A survey of financial offers of the Fortune 500 Corporations to learn their predictions for the economic outlook in their industries in the next year. e. A study of applicant requirements, job tasks, and performance expectations as part of a job analysis of student work-study jobs on a college campus of 2,000 students, where 1,500 are involved in the work-study program.

Shirts-R-Us sells blouses in Florida. Blouses are imported from Pakistan and sold to customers in their stores. Salespeople are paid a base salary and a commission of $14 on each blouse they sell. The invoice cost of the blouse to the company is $36 per blouse. In addition, Shirts-R-Us pays rent of $160,000 a year, salaries total $140,000 a year and advertising is $300,000 a year. The blouses are sold for $80 each. The breakdown of the costs and revenues are given in the table. Revenues $80 per blouse Variable Costs Invoice cost $36 Commission $14 Fixed Costs Rent $160,000 Advertising $300,000 Salaries $140,000 a) Compute the breakeven point in units and dollars for Shirts-R-Us. b) Suppose that the company sells 18,500 blouses for the year. What price would Shirts-R-Us have to charge in order to breakeven? c) Suppose that Shirts-R-Us decides to increase salaries by $214,000 and eliminates the commission on sales. What is the new breakeven point in units and dollars?

Your client, a US multinational company, is planning to transfer intangible assets, including trade names and trademarks to a low tax offshore subsidiary. This subsidiary would charge royalties to the US and foreign subsidiaries for the use of the intangibles. The company also plans to ship products manufactured by its international subsidiary to various worldwide customers.

A) Briefly summarize the current transfer pricing implications and tax reporting considerations your client should consider for both transactions.

B) What other information would you request from your client?

Boys & Girls (a new e-dating service) undertakes two different online dating events that are popular items in the online-dating market: Hot (H) and Cool (C).  The profit margin on (Hot) H is $ 300; on C is $ 200.  For each couple that signs up with Hot (H), it takes the firm 6 hours of back-up checks (B), 4 hours of data entry (D), and 5 hours of interview (I). For each couple that signs up with Cool (C), it takes the 3 hours of B (back-up checks), 6 hours of D (data entry), and 5 hours of interview (I).  If 54 hours are available for B, 48 hours for D, and 50 hours for I, then how many slots of Hot (H) and Cool (C) should the company make available for potential customers.  Obviously, the company wants to maximize profits.              

Use this space to graph the constraints and derive the feasible set.  If you want you can scan the image and paste it here, or you can upload it in BB as another document.  Or the simplest is to copy and paste my figure from Unit 11 and relabel and change the entries on the axes.

Now you are employed as the public relations officer of an information technology company . The company is going to promote a new product at early in November, 2020. Being the PR officer, your assignment is to propose a press conference for the promotion of the new product at the end of October, 2020.

Your assignment should include:

1. Introduction/background of the company (under 100 words)
2. Brief description of the new product with news value (under 70 words)
3. Illustration of the press conference including the objectives, target audiences and the three stages from preparation to after the event. (about 730 words in essay forms)
4. Conclusion (under 100 words)

Condensed financial data of Concord Company for 2020 and 2019 are presented below.

ONCORD COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2020

Sales revenue

$6,860

Cost of goods sold

4,710

Gross margin

2,150

Selling and administrative expenses

920

Income from operations

1,230

Other revenues and gains

   Gain on sale of investments

80

Income before tax

1,310

Income tax expense

530

Net income

780

Cash dividends

260

Income retained in business

$520

Additional information:

During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2020.

Prepare a statement of cash flows using the direct method.

Smith, a U.S. citizen, has been working as an executive of a telecommunication company in U.S., and her annual salary in 2014 was US$150,000. Her salary was expected to remain unchanged if she continued to work in the company. At the end of the year 2014, however, she was recruited by a media company in Brazil, so she started working in Brazil from January 2015, making an annual salary of US$210,000. Assuming that the amount of her salary equals the amount of her contribution to the production in the company she works for, how much the annual U.S. GDP and GNP in 2015 was changed due to her job relocation? Clearly show the reasoning for your answer.     

Suppose you are a U.S. based company and exports goods from the United Kingdom. In 90 days, you expect to receive payment for a shipment of goods from the UK worth 100,000 British pounds (settlement). The US risk free discrete rate is 2.6% and the UK risk free discrete rate is 4.0%, and the current FX spot rate is $1.23 per pound.

A. You expect the UK pound currency to decrease against the US dollar over next 90 days. Please explain, whether you should buy or short a forward contract on the FX currency to hedge the foreign exchange risk?

B. What is the no-arbitrage profit “Interest Rate Parity” forward price to enter a forward contract expiring in 90 days?

C. After 30 days since the US company entered into a forward contract agreement the FX spot price for USD per pound is now, $1.19 per pound. The US risk free and UK risk free interest rates have stayed the same. What is the value of the US company’s position in the Forward contract at this 30-day mark of the 90-day forward contract?

D. At expiration of the forward contract (at 90 days), assuming forward price agreed was “Interest Rate Parity” price, and the USD per pound currency spot price is $1.23 per pound, what is the value of the US Company’s forward contract position?

ABC Pty Ltd is an Australian resident private company and on 1 July 2019 its franking account balance was $35,000. ABC paid PAYG instalments of income tax during the year ended 30 June 2020 as follows: 21 July 2019 -- $35,000 21 October 2019 -- $35,000 21 January 2020 -- $35,000 21 April 2020 -- $26,000 A refund of income tax of $22,500 was received by ABC from the ATO on 1 April 2020. ABC paid GST of $65,000 on 28 October 2019 and FBT of $57,000 on 30 April 2020. ABC received a fully franked dividend of $21,000 on 1 November 2019 and an unfranked dividend of $33,000 on 12 December 2019. ABC paid a 75% franked dividend of $120,000 on 1 February 2020and a 50% franked dividend of $70,000 on 1 June 2020. Prepare a franking account for ABC for the year ended 30 June 2020.

You are the CEO of a privately held company. Your company has a project regarding the development and marketing of a new product. The project requires an initial investment (at t=0) of $100m, and will generate a payoff only during the following period, t=1. The payoff at t=1 is random, and depends on your marketing strategy at that time. In particular, you will be able to follow either a conservative strategy (strategy C) or an aggressive strategy (strategy A). Payoffs under the two strategies are given by:

Payoff from strategy C: 150m (probability 50%) 110m (probability 50%)
Payoff from strategy A: 200m (probability 50% 30m (probability 50%)

The strategy you will choose remains private information to you. You have 20m cash, and you must raise the $80m required for the initial investment with outside financing. The appropriate discount rate for this project is the risk-free rate, which is zero.

You first consider a bank loan. What is the promised payment F (principal plus interests) that a rational banker, aware of your incentives, will ask to loan you the $80m you need? (Hint: you need determine which strategy the firm will follow if it is debt-financed…) Before signing up for a loan, you also check with an investment banker about issuing equity in an IPO. The banker advises you that if you wish to issue equity in an IPO you should expect to sell shares at 20% discount with respect to their fair market value. What fraction of the firm must you sell to receive the desired $80m financing?

Which alternative do you prefer: the bank loan or the IPO? Explain your results. How your answer would change if you are able to sell equity in the IPO at a 10% discount?