There is a new amusement park under construction in town and the manager of the project has hired
you to design a "Zero-Gravity" room.
(a) Based on your knowledge of nature of electric charge and electric forces, how will you design
such a facility? Comment on components of the room, and explain how it will work for walk in
customers? What would be the safety concerns and measures?
(b) Assume that your design has been approved and facility has been constructed. Your manager has
asked you to demonstrate the operation of the room. You decided to show him weightlessness
using your own body. In your design of part (a), what parameters will you set for this demon-
stration? (You should choose the parameters to counter the value of your weight, for simplicity
you can approximate your body as a point like particle).

An unconscious woman was found partially clothed in a city park that was not illuminated by lighting. The ambulance brings her to your ED. She has no purse and no identification. She is bleeding profusely from a head laceration and the ED physician calls for two units of blood. While this order is being made, a ward clerk whispers to a nurse that the patient looks familiar and may a member of the city’s Jehovah’s Witness group, but the ward clerk is not sure. The nurse immediately calls for a “Time Out” and relays this information to the team. What are the legal and ethical issues for consideration? What should happen?

Sunburst Veggies is a vertically-integrated company which both grows[1] and processes organic vegetables. Their company-grown vegetables are canned and then sold wholesale to grocery stores. The company began their operations in San Marcos, Texas in the mid-1990s and the corporate headquarters remain there. Sunburst grows a wide variety of organic (non-GMO) vegetables in greenhouses, some of which cover more than 200 acres. The vegetables are shipped from manufacturing facilities near the greenhouses. This assures the vegetables are processed as quickly as possible after being picked which inspired the company’s marketing tag line: “fresh from the field.”

Consumer demand for organically-grown vegetables has increased tremendously since Sunburst began operations 10 years ago. Gross revenues have increased 500% since year 1. The firm now has five greenhouses and processing plants in locations near the following cities: Sacramento, CA; San Marcos, TX; Baton Rouge, LA; Montgomery, AL; and Jacksonville, FL. They employ nearly 600 people.

Potential Sites: Sunburst is at maximum capacity in all locations and must add another greenhouse and processing plant in order to continue their sales growth to new customers (and to assure they have no out-of-stock issues for existing customers). Both the greenhouse operations for growing the vegetables and the canning facility require large volumes of fresh water. It is essential to locate near an interstate highway because all shipments are shipped via semi-trucks.

Two sites are being considered near the towns of Gulfport, Mississippi and Little Rock, Arkansas. Because of extensive damage caused in Gulfport by Hurricane Katrina in August 2005 (and more recently by Hurricane Harvey), the cost of real estate in that area is significantly lower than in Little Rock.

Estimated Operating Costs: Estimates of operating costs for the two locations are as follows:

                                                                                        Gulfport             Little Rock

         Life of greenhouse & processing plant                        50 years                  50 years

         Expected annual sales (# cases)                                   300,000                  300,000

         Selling price (average per case)                                         $90                         $90

         Variable costs (average per case)                                  $60.00                    $60.00

         Fixed Costs (annual):

       Salaries & fringe benefits (labor is higher in L.R.)   $1,300,000              $1,500,000

       Depreciation* (see calculations on pg. 2)                   $455,000                $485,000        

       Other fixed costs                                                      $655,000                $655,000

         Total Fixed Costs                                                  $2,410,000              $2,640,000

*Straight-line depreciation on buildings is over 50 years, based on the initial investment with -0- salvage. Equipment is depreciated using straight-line over 20 years with -0- salvage value. Land is not depreciated. Calculations have been simplified more than would be in business (only for use in this problem).

Estimated Capital Investment: Sunburst owns some used greenhouse equipment that they could transfer from one of their existing locations to either Gulfport or Little Rock. The book value of that equipment is $1,900,000 and requires some modifications up-front (cost of $300,000) to get it ready for use in either location. They already own some used manufacturing equipment that can be transferred to either new location; this has a book value of $1,000,000 (and, does not require any modification). Both types of equipment have been sitting idle (unused) for the past year. There is no other alternate use for the equipment.    The summary of estimated initial capital investment in each of the two locations follows:

                                                                               Gulfport                      Little Rock

         Land                                                            $4,000,000                       $7,500,000

         Greenhouse Buildings                                   $3,500,000                       $4,000,000

         Manufacturing Building                              $10,000,000                     $11,000,000

                    Sub-total for Buildings                     $13,500,000                     $15,000,000

         Greenhouse Equipment (used):

              Book value (transferred)                           $1,900,000                       $1,900,000

              Modifications (up-front)                              $300,000                         $300,000

         Manufacturing Equipment (used):

              Book Value (transferred)                          $1,000,000                       $1,000,000

         Other equipment (to be capitalized)                  $500,000                         $500,000

                    Sub-total for Equipment                     $3,700,000                       $3,700,000        

              Total                                                     $21,200,000                     $26,200,000

Depreciation Calculations (as shown in *total on previous page):

Gulfport Buildings              $13,500,000 / 50 years = $270,000  

Gulfport Equipment              $3,700,000 / 20 years = $185,000

                             Total Depreciation – Gulfport = $455,000

Little Rock Buildings                                                 $15,000,000 / 50 years = $300,000

Little Rock Equipment                                                 $3,700,000 / 20 years = $185,000

                                                                Total Depreciation – Little Rock = $485,000

Other Relevant Information:

Minimum desired rate of return is 11%.

All current locations are earning an average 14% return on sales.

Payback period for all prior capital investments has been not more than 3.75 years.

For simplicity, assume there are no income taxes.

REQUIREMENT #1 - QUANTITATIVE ANALYSIS (MUST be in Excel & use Excel functionality for ALL calculations):

Prepare an Income Statement in the Contribution Margin format for each location.

Identify which of the items on the Income Statement are “relevant” for each location.

Calculate Breakeven Point (in Sales Dollars) for each location

REQUIREMENT #2 – RECOMMENDATION & QUALITATIVE FACTORS: (MUST be in Word and must use 1-inch margins on all sides and Times Roman 12-point font.)

Based on the quantitative analysis, which location would you recommend and why?

Would your recommendation change based on qualitative factors? These might include available workforce, logistical considerations, risk from weather events, potential impact of global warming. Students must do some research of their own to identify the difference in such factors for the two locations. Because qualitative factors cannot be quantified, how would you evaluate the importance of such non-financial items?

Do the qualitative factors impact your recommendation? If “yes,” in what way?

- Dont worry about excel file not being attached. I only need help with qualitative analysis.(#2 of the question).

Julius Berger is the junior portfolio manager of the global equities portfolio at BSC Asset Management based in the City. Akinbowale, a recently hired equity analyst, has been assigned to Julius to assist him with the portfolio.

Julius provided the betas estimated by using the Capital Asset Pricing Model (CAPM) for MSFT (MSFT), Lloyds (LLoyd), and CHevron (CVF) are 1.28, 1.63, and 1.03, respectively. The risk-free rate of return is 2.42 percent and the equity risk premium is 7.15 percent. Julius also considers an equal-weighted portfolio from the three stocks.

A private friend of Julius asked him to educate him about alternative asset pricing models to the CAPM. Julius considers the Fama-French 3-factor model. Akinbowale collated the following information to evaluate the price of 106 and park by using the Fama-French model. Treasury bill rate is 2.42 percent.

Exhibit 1: TerraNova Data

Required:

Calculate the individual required rates of return for the three stocks using the CAPM.

Calculate the required rate of return and beta of the portfolio consists of the stocks.

Compare the Fama-French 3-factor model to the CAPM and explain the differences.

Based on the data in Exhibit 1, calculate and compare the required return for 106 and park ltd      using the CAPM and the Fama–French model.

Describe the expected style characteristics of 106 and park based on its factor sensitivities.

Part 1:

Park Co. is considering an investment that requires immediate payment of $29,500 and provides expected cash inflows of $14,400 annually for four years. What is the investment's payback period?

Part 2:

Park Co. is considering an investment that requires immediate payment of $21,530 and provides expected cash inflows of $6,500 annually for four years. If Park Co. requires a 7% return on its investments.

1-a. What is the internal rate of return? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.)

Part 3:

Peng Company is considering an investment expected to generate an average net income after taxes of $3,400 for three years. The investment costs $50,400 and has an estimated $10,200 salvage value.

Assume Peng requires a 10% return on its investments. Compute the net present value of this investment. Assume the company uses straight-line depreciation. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign.)

Water will be pumped from a reservoir free surface of which is at an elevation of “z1” to reservoir the free water surface of which is at “z2”. Both of the reservoirs’ free surfaces at atmospheric pressures.Design a piping system that transmits water from the lower reservoir to the upper reservoir at a volumetric flow rate of Q (m3 /h).

Q = 200 (m3/h) Za = 10(m) Zb= 60 (m) Zc = 75 (m) L1=200 (m) L2=125 (m) "Pipe material is "Commercial Stainless Steel" "

1) Consider necesssary fittings( valves, elbows….)

2) Given data and cost elements, determine the optimum pipe diameter of the system . In order to do this:

3) Write the energy equation between z1 and z2 by taking the major losses associated with the pipe, minor losses associated with the fittings, sudden contraction, and expansion regions inside the system and the pump total head rise ”hp” into account .

4) The average velocity of the water inside your piping system should be between 0.1 and 5 m/s. 5) Calculate the head rise “hp” that must be provided by the pump.

6) Choose a pump that provides a head rise of ”hp” (that you calculated) near its most efficient working flow rate at your given flowrate Q from the local manufacturer’s catalogues.

7) Find the cost of the pipe per one meter (TL/m) and unit electricity price ( TL/kWh). Neglect cost of the pump or pumps.

8) Calculate the cost of the system for one year: Obtain the graph which shows the variation of the capital cost, the energy cost and the total cost in function of the pipe diameter for working of the pump at a rate of 24 hours/day for one year.

9) If head loss from reservoir to pump inlet is 0.8 m, where should the pump inlet be placed to avoid cavitation for water at 15°C, pv= 1.71 kPa absolute?.

10)Check the absolute pressure at point C.

11) Draw a schematic representation of the system.

12) Give necessary technical drawings of the pipe and give schematic representations of the chosen minor loss elements.

13) Give the performance characteristics chart of the chosen pump and the technical drawing of it.

A resort hotel administrator is assigned to conduct performance reviews of the 47 guest services representatives at the resort, and the length of time that the administrator typically spends doing each of these performance reviews is normally distributed with a mean of 63.9 minutes and a standard deviation of 18.4 minutes. The administrator is scheduled to meet with 7 guest service representatives today.

Standard Normal Distribution Table

a. What is the probability that the administrator will spend an average of less than one hour with each of the representatives?

Round to four decimal places if necessary

b. What is the probability that the administrator will spend a total of more than 7.5 hours with all 7 of the representatives?

Round to four decimal places if necessary

c. Within what range of values will the middle 99% of average times spent with each of the 7 representatives fall?

Range:

to

minutes

Round to one decimal place if necessary

d. What is the maximum total length of time the administrator would expect to spend with all 7 guest service representatives today, with a probability of 0.98?

minutes

Round to one decimal place if necessary

HomeSuites is a chain of all-suite, extended-stay hotel properties. The chain has 24 properties with an average of 200 rooms in each property. In year 1, the occupancy rate (the number of rooms filled divided by the number of rooms available) was 80 percent, based on a 365-day year. The average room rate was $220 for a night. The basic unit of operation is the “night,” which is one room occupied for one night.

The operating income for year 1 is as follows.

In year 1, the average fixed labor cost was $420,000 per property. The remaining labor cost was variable with respect to the number of nights. Food and beverage cost and miscellaneous cost are all variable with respect to the number of nights. Utilities and depreciation are fixed for each property. The remaining costs (management, marketing, and other costs) are fixed for the firm.

At the beginning of year 2, HomeSuites will open four new properties with no change in the average number of rooms per property. The occupancy rate is expected to remain at 80 percent. Management has made the following additional assumptions for year 2.

• The average room rate will increase by 10 percent.
• Food and beverage revenues per night are expected to decline by 25 percent with no change in the cost.
• The labor cost (both the fixed per property and variable portion) is not expected to change.
• The miscellaneous cost for the room is expected to increase by 30 percent, with no change in the miscellaneous revenues per room.
• Utilities and depreciation costs (per property) are forecast to remain unchanged.
• Management costs will increase by 5 percent, and marketing costs will increase by 5 percent.
• Other costs are not expected to change.

The managers of HomeSuites are considering different pricing strategies for year 2. Under the first strategy (“High Price”), they will work to maintain an average price of $230 per night. They realize that this will reduce demand and estimate that the occupancy rate will fall to 70.0 percent with this strategy. Under the alternative strategy (“High Occupancy”), they will work to increase the occupancy rate by lowering the average price. They estimate that with an average nightly rate of $190, they can achieve an occupancy rate of 90 percent. The current estimated profit is $259,025,200.

Required:

a. Prepare a budgeted income statement for year 2 if the “High Price” strategy is adopted.

b. Prepare a budgeted income statement for year 2 if the “High Occupancy” strategy is adopted.

c. Which is the correct pricing strategy for year 2.

Last week we learned more about important concepts in the area of Distribution and about the job of Revenue Manager. Two of the most heavily negotiated points in the distribution channel agreements are Last Room Availability and Rate Parity. Which of these do you feel is the most beneficial to the hotel, and why?