this discussion invites you to consider the validity of this interpretation of political globalization, by reflecting on the current COVID-19 health pandemic and considering what the global response to this crisis tells us about the relative power of individual states, and the role of IGOs like the World Health Organization (WHO). To what extent are we currently living in an era of global governance? To what extent do individual states retain sovereignty? Are all states equally independent? Would a 'real' world government be preferable in the face of this kind of global pandemic? Why or why not? Compare and contrast two countries, the best and worst, to find out how are some states responding to the COVID -19 crisis? At an individual level, what are you doing to flatten the curve?

Janice Underwood, an MBA student in Southeastern University , has been hired as a night manager of Campus Deli and Sub Shop (CDSS), which is located adjacent to the campus. Sales were $ 875,000 last year; variable costs were 60 % of sales; and fixed costs were $ 50,000. Therefore, EBIT totalled $ 300,000. Since the university ‘s enrollment is capped, the store’s EBIT is expected to be constant over time. Since no expansion capital is required, CDSS pays out all earnings as dividends.

CDSS is currently all equity financed, and its 100,000 shares outstanding sell at a price of $ 10 per share. The firm’s tax rate is 34 %. Underwood believes that the firm will be better off if some debt financing is used.She needs some justification for her suggestion. She developed the following estimates of the costs of debt and equity at different debt levels ( in thousands of dollars ):

Amount   borrowed                                    cost of debt                 cost of equity

$     0                                                                  _                               15.0%

   200                                                              10.0%                          15.5

   400                                                              11.0                              16.5

   500                                                              13.0                              18.0

   600                                                              16.0                              20.0

If the firm were recapitalized, the borrowed funds would be used to repurchase stock. Stockholders ,in return, would use the funds provided by the repurchase    to buy equities in other fast food companies similar to CDSS. Underwood needs help in answering the following questions:

1.Calculate CDSS’s expected EPS at debt levels of $0, $ 200,000, $400,000,$ and 600,000. How many shares would remain after recapitalization under each scenario? Assume that shares are repurchased at the current market price of $ 10per share?

2. What would be the stock price under each case defined above?

3.If CDSS’s fixed costs total $ 50,000, what is its degree of operating leverage?

4. What will be CDSS’s degree of financial leverage at a debt level of $ 500,000?

Stocks are a risky investment. Treasury bills are highly liquid and risk free investment whose interest income is not subject to state income taxes. Stocks have significantly outperformed Treasury Bills over the long term. In light of these higher returns, which best explains why an individual would invest in Treasury Bills vs. Stocks?

A. US Treasury Bills are highly liquid; exempt from state and local taxes; and have lower return than stocks

B. Preference for a very low risk investment would result in an individual choosing Treasury Bills over stocks despite lower expected returns.

C. US Treasury Bills are highly liquid and exempt from state taxes.

D. The individual may not want higher returns associated with stocks.

E. Stocks are riskier than Treasury Bills.

Part (a) Consider a firm called Health-R-Us that is a monopoly. How does Health-RUs decide the price to charge and quantity to sell of the good it has a monopoly on? Illustrate your answer using a fully labelled and explained market diagram. Assume Health-R-Us is making monopoly profits and illustrate these on the same diagram. In addition, indicate the area on your diagram that illustrates the efficiency cost (the dead weight loss) of the monopoly, and explain why this dead weight loss arises.

Part (b) Assume Health-R-Us is a legal monopoly: it is a monopoly due to legal protection from the government in the form of a patent issued to the company. Imagine that the government withdraws the legal protection for Health-R-Us such that the market becomes competitive. Will a typical individual firm in this competitive market make economic profit in the long run? Why or why not? Use an appropriate firm-level diagram to illustrate and explain your answer.

Part (c) Your answers to parts 2a and 2b illustrated different levels of profit made by an individual firm in both a monopoly market structure and a competitive market structure respectively. In part 2a you also indicated the dead weight loss of a monopoly.

Assume now that Health-R-Us has discovered a vaccine for coronavirus. Why might the government be willing to grant (and allow to remain in place) a patent to HealthR-Us, despite the dead weight loss and the ensuring monopoly profits caused by such a patent? Explain your answer. For simplicity assume the vaccine is only relevant for the domestic market (i.e., there is no global market for vaccines).

Part (a) Consider a firm called Health-R-Us that is a monopoly. How does Health-RUs decide the price to charge and quantity to sell of the good it has a monopoly on? Illustrate your answer using a fully labelled and explained market diagram. Assume Health-R-Us is making monopoly profits and illustrate these on the same diagram. In addition, indicate the area on your diagram that illustrates the efficiency cost (the dead weight loss) of the monopoly, and explain why this dead weight loss arises.

Part (b) Assume Health-R-Us is a legal monopoly: it is a monopoly due to legal protection from the government in the form of a patent issued to the company. Imagine that the government withdraws the legal protection for Health-R-Us such that the market becomes competitive. Will a typical individual firm in this competitive market make economic profit in the long run? Why or why not? Use an appropriate firm-level diagram to illustrate and explain your answer.

Part (c) Your answers to parts 2a and 2b illustrated different levels of profit made by an individual firm in both a monopoly market structure and a competitive market structure respectively. In part 2a you also indicated the dead weight loss of a monopoly.

Assume now that Health-R-Us has discovered a vaccine for coronavirus. Why might the government be willing to grant (and allow to remain in place) a patent to HealthR-Us, despite the dead weight loss and the ensuring monopoly profits caused by such a patent? Explain your answer. For simplicity assume the vaccine is only relevant for the domestic market (i.e., there is no global market for vaccines)

Part (a)

Consider a firm called Health-R-Us that is a monopoly. How does Health-R-Us decide the price to charge and quantity to sell of the good it has a monopoly on? Illustrate your answer using a fully labelled and explained market diagram. Assume Health-R-Us is making monopoly profits and illustrate these on the same diagram. In addition, indicate the area on your diagram that illustrates the efficiency cost (the dead weight loss) of the monopoly, and explain why this dead weight loss arises.

Part (b)

Assume Health-R-Us is a legal monopoly: it is a monopoly due to legal protection from the government in the form of a patent issued to the company. Imagine that the government withdraws the legal protection for Health-R-Us such that the market becomes competitive. Will a typical individual firm in this competitive market make economic profit in the long run? Why or why not? Use an appropriate firm-level diagram to illustrate and explain your answer.

Part (c)Your answers to parts 2a and 2b illustrated different levels of profit made by an individual firm in both a monopoly market structure and a competitive market structure respectively. In part 2a you also indicated the dead weight loss of a monopoly.

Assume now that Health-R-Ushas discovered a vaccine for coronavirus. Why might the government be willing to grant (and allow to remain in place) a patent to Health-R-Us, despite the dead weight loss and the ensuring monopoly profits caused by such a patent? Explain your answer. For simplicity assume the vaccine is only relevant for the domestic market (i.e., there is no global market for vaccines).

HUAWEI’S INTERNATIONALIZATION STRATEGY

INTRODUCTION

In October 2016, Shenzhen-based networking and telecommunications equipment and services company Huawei Technologies Ltd. (Huawei) unveiled its 14-port and 3-D Hexa-beam antennas to address the challenges associated with the 4.5G and 5G era at the 5th Annual Global Antenna and Active Antenna Unit Forum held in Paris. Commenting on the launch, Zhang Jiayi, president of Huawei’s antenna business unit, said, “Huawei focuses on satisfying the requirements of operators in the MBB (mobile broadband) era.”

Founded in 1987 in Shenzhen by Ren Zhengfei (Ren), a former military engineer in the People’s Liberation Army (PLA) – the unified organization of the armed forces of China, Huawei started as a sales agent for a Hong Kong-based company selling private branch exchange (PBX) switches. Soon, the company innovated and started selling its own PBX switches. Having established its domination over the Chinese telecommunications market, the company entered the global markets of Russia and Africa in 1996 and later mature The origin of Huawei Technologies Ltd. (Huawei) dated back to 1987 when Ren Zhengfei (Ren), a former military engineer in the People’s Liberation Army (PLA), founded the company in Shenzhen with the aim of making it the backbone of China’s communications industry.

The company started as a sales agent for a Hong Kong company selling private branch exchange (PBX) switches with an initial investment of US$ 3400. By 1990, it had acquired enough resources to open its first research laboratory. In the same year, i.e. 1990, the company made its own PBX and started selling the switches to hotel networks at prices lower than those of imported devices

HUAWEI’S INTERNATIONALIZATION STRATEGY

In the mid-1990s, the Chinese domestic telecommunications networking equipment market was dominated by giant international telecom equipment companies. Their dominance led to Huawei having a relatively weaker position in China. Ren believed that the Chinese telecommunications market was the largest and among the most open markets in the world attracting global telecommunication giants to the country. As a result, he felt, “The best food has all been eaten up by the global giants and what we can do is to have those leftovers.” This prompted Huawei to consider entering international markets. Commenting on its international expansion, Ren, said, “We were forced to go into the international market for our very survival.”

CHALLENGES IN THE GLOBAL TELECOM MARKETS

Though Huawei achieved huge success in several global markets, the US was a different story altogether. Despite bidding several times since the company first entered America, Huawei failed to win a single big contract from top-tier carriers such as AT&T, T-Mobile, and Verizon. The US telecom companies had had long relationships with home-grown suppliers such as Lucent, Motorola, and Cisco. Moreover, the US telecom majors felt that while the telecom equipment manufactured by Huawei was fine for emerging markets, it was not reliable or suitable for the 24/7 service required by networks in the US. Though by 2011, Huawei had developed some of the most innovative and fastest equipment in the telecom industry, it continued to face resistance in the US.

THE CHALLENGES CONTINUE...

While Huawei was making several efforts to crack the global telecom markets, in July 2015, Malcolm Turnbull, Communications Minister, Australia, stated that amidst security threats, telecom companies in Australia had been barred from using equipment from Huawei and ZTE. This meant that Huawei would lose its existing business in Australia since it provided equipment for consumer devices and backend networks for Vodafone and Optus. There could also be more trouble in store for Huawei with the Pentagon and the US military announcing plans in October 2015 to ban the use of Huawei equipment.....

LOOKING AHEAD

In November 2016, when the US telecom market announced its plans to build the nation’s 5G wireless network, Huawei was also gearing up to roll out its 5G wireless network by 2020. Though Huawei had earlier stated that it had given up on the US market, Ren hinted that the company had not given up on the country permanently and that it planned to make a “glorious” return to the US. However, Huawei stated that it would not focus on the US market currently but would concentrate on other global markets. According to Ken Hu (Hu), Huawei’s CEO-in-rotation, “For our 5G strategy, we currently focus on markets like China and Japan among others. In the US right now, we’re not making significant progress and we don’t have big plans for that market.”

Case study question

In the context of Huawei discuss the strategies for having a global footprint which is followed by companies in an International Business setting.

Record the following ADJUSTING Entries as of Dec 31st 2018 in General Journal Form: a. Office Supplies had a debit balance of $4,250 at the beginning of the year (Jan 1, 2018). During the year, additional supplies were purchased of $5,500. A count of supplies on hand at the end of the year (Dec 31, 2018) totaled $2,650 (Asset Value). Record the supplies use b. us up during 2018. (Hint: $4,250 + $5,500 - $2,650 = Supplies Used Up and needs to be recorded as Supplies Expense) c. Tara Company purchased an Auto on Jan 1, 2018 at a cost of $22,000. During the year, the Auto depreciated $4,000. d. Tara Company prepaid $18,000 for 6 months of her RENT on November 1, 2018. Record the adjustment for expired rent expense at Dec 31, 2018 (Hint: 2 months x $3,000 =Rent Expense needs to be recorded from Prepaid Rent). e. Tara Corp. has unpaid electricity costs of $650 at Dec 31, 2018. f. Tara Company collected revenue in advance of $12,000. At year end Tara determines that 80% was earned during 2018. (HINT: $12,000 x 80% is EARNED and no longer UNEARNED) g. Tara Company earned $4,350 from a customer on Dec 15, 2018 and has not yet sent out a bill or recorded the transaction yet. h. The Tara Company has WEEKLY payroll of $20,000. The year (12/31/18) ended on a Thursday and the employees are paid weekly every Friday. Record an adjustment for the payroll earned and unpaid in 2018.( HINT: $20,000 / 5 Days = $4,000 per day x 4 Days = $16,000 Unpaid Salary Expense NOT yet recorded)

CenTer Realty is a recently founded commercial and residential real estate company. CenTer grossed $3,000,000 in revenues last year, while incurring $1,000,000 in operating expenses and $300,000 in income taxes. CenTer Realty owned and occupied an office building in downtown Kansas City. The building could have been leased to other businesses for $500,000 in lease income last year. The owner of CenTer Realty invested $4,000,000 of his own money that could have earned a 10 percent rate of return on funds invested elsewhere. He also left a job as a realtor, where he earned $200,000 the previous year. Q 1 Question 1 Last year, CenTer Realty’s total explicit costs of using market-supplied resources are $. Q 2 Question 2 CenTer’s total implicit costs of using owner-supplied resources equals $ last year. Q 3 Question 3 CenTer’s accounting profit was $ Q 4 Question 4 Economic profit last year was