Describe related models to explain why cities exist. Give an example for each model. ( 50 marks)

i. Model 1: Backyard production – a region without cities

ii. Model 2: Trading city

iii. Model 3: Factory town

Which curve shifts, and in what direction, when the following events occur in the local burrito shop market?

a. College students arrive back into town for the fall semester

b. Two more Chipotle restaurants open

c. Several pizza shops open

The Fleming Foundation is a charitable organization founded by Gaylord Fleming and Sandy Fleming. The Flemings intended for the charity to provide programs in health care for the elderly, particularly those in poverty. The two main program divisions of the foundation are mental health for the elderly and housing for the elderly. In addition to these programs, the Foundation also provides health care educational programs and has a significant fund-raising effort to help the Foundation grow and accomplish the goals of the founders. The Foundation is organized into two operating departments—education and program management. These departments are supported by two service departments—information technology (IT) and administration. To summarize, there are four departments (two service departments and two operating departments) and two programs (mental health and housing for the elderly). The service department costs are allocated to the operating departments, and then the operating department costs are allocated to the programs. There are $420,000 of costs directly traceable to each of the four departments. An additional $42,000 of indirect costs is shared among the four departments—$22,500 of which is allocated to the departments based on labor hours and $19,500 of which is allocated to the departments based on the number of personnel (head count) in the departments. The cost, labor hours, and head count in these departments in the most recent year are as follows: Departments Direct Cost Labor Hours Head Count Information technology $ 7,000 2,000 1 Administration 128,000 2,000 4 Education 118,000 4,000 4 Program management 167,000 2,000 3 $ 420,000 IT serves education, administration, and program management 20%, 20%, and 60% of its time, respectively. Administration serves education, IT, and program management 40%, 10%, and 50% of its time, respectively. The costs of the two operating departments (education and program management) are allocated to the two programs (mental health and housing) as follows: the costs in Education are allocated on the basis of labor hours in the programs, while the costs in program management are allocated using the head count used in the two programs. The following table shows the labor hours and head count consumption by the two programs. Labor Hours Head Count Mental health 1,000 1 Housing 1,000 2 Labor hours in education 2,000 Head count in program management 3 Required: Determine the costs allocated to the mental health and housing programs using the (a) direct method, (b) the step method (assuming that IT goes first), and (c) the reciprocal method. (Round percentage calculations to 4 decimal places (e.g., 33.3333%). Do not round intermediate calculations. Round your final answer to nearest whole dollar amount.)

The Fleming Foundation is a charitable organization founded by Gaylord Fleming and Sandy Fleming. The Flemings intended for the charity to provide programs in health care for the elderly, particularly those in poverty. The two main program divisions of the foundation are mental health for the elderly and housing for the elderly. In addition to these programs, the Foundation also provides health care educational programs and has a significant fund-raising effort to help the Foundation grow and accomplish the goals of the founders. The Foundation is organized into two operating departments—education and program management. These departments are supported by two service departments—information technology (IT) and administration. To summarize, there are four departments (two service departments and two operating departments) and two programs (mental health and housing for the elderly). The service department costs are allocated to the operating departments, and then the operating department costs are allocated to the programs.

There are $260,000 of costs directly traceable to each of the four departments. An additional $46,500 of indirect costs is shared among the four departments—$25,500 of which is allocated to the departments based on labor hours and $21,000 of which is allocated to the departments based on the number of personnel (head count) in the departments.

The cost, labor hours, and head count in these departments in the most recent year are as follows:

IT serves education, administration, and program management 20%, 20%, and 60% of its time, respectively. Administration serves education, IT, and program management 40%, 10%, and 50% of its time, respectively.

The costs of the two operating departments (education and program management) are allocated to the two programs (mental health and housing) as follows: the costs in Education are allocated on the basis of labor hours in the programs, while the costs in program management are allocated using the head count used in the two programs. The following table shows the labor hours and head count consumption by the two programs.

Required:

Determine the costs allocated to the mental health and housing programs using the (a) direct method, (b) the step method (assuming that IT goes first), and (c) the reciprocal method. (Round percentage calculations to 4 decimal places (e.g., 33.3333%). Do not round intermediate calculations. Round your final answer to nearest whole dollar amount.)

An entrepreneur founded a company (ABC) in 2001. Recently, the stock was trading at $42per share. With 850k shares outstanding, EPS were $1.41. The entrepreneur and the members of the board of directors were initially pleased when another firm purchased 50k shares of ABC stock. However, when the purchasing firm bought another 50k shares, the entrepreneur and members of the board became concerned that the purchasing firm might be trying to take over ABC.

The entrepreneur was reminded by the legal staff that ABC had a poison pill provision that took effect when any outside investor accumulated 23% or more of the shares outstanding. Current stockholders, excluding the potential takeover company, were given the privilege of buying up to 500k shares of ABC at 84.04% of current market value. Thus, new shares would be restricted to friendly interests. The legal staff also found that the entrepreneur and “friendly” members of the board currently owned 175k shares of ABC.

In view of the above information, ABC company is in the process of determining the costs described by the following scenarios:

Scenario #1: Takeover firm makes a move

Gets 50% (plus 1 share) of ABC stock at the current market price level, in addition to shares previously accumulated.

Scenario #2: “Friendly” shareholders come to the rescue

Takeover firm exceeds the number of shares determined in the previous scenario, and gets all the way up to 625,000 shares of ABC. Under the poison pill provision, friendly shareholders purchase to prevent a takeover attempt by the acquiring firm, next to what they already own.

Required: In percentage terms, by how much would the poison pill strategy make the purchase more expensive for the takeover firm?

Answer
% Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places (for example: 28.31%).

1. On the other hand, the General Motors went on a different direction. General Motors was founded in 1908 and one hundred years old company.  Following the financial crisis in 2008/2009, General Motors filed for chapter 11 bankruptcy protection.  After support from the US government and restructuring, the business operation was able to re-enter the market.  In your ECON 200 class you learnt the conditions at which the firms enter and exit from the market.  Using a graph describes how and when in a perfectly competitive market the firms that are experiencing economic losses close the operation and reenter to the market. In the graph you may use costs and revenue curves.  (25 Points)

An entrepreneur founded a company (ABC) in 2001. Recently, the stock was trading at $43per share. With 850k shares outstanding, EPS were $1.41. The entrepreneur and the members of the board of directors were initially pleased when another firm purchased 50k shares of ABC stock. However, when the purchasing firm bought another 50k shares, the entrepreneur and members of the board became concerned that the purchasing firm might be trying to take over ABC.

The entrepreneur was reminded by the legal staff that ABC had a poison pill provision that took effect when any outside investor accumulated 30% or more of the shares outstanding. Current stockholders, excluding the potential takeover company, were given the privilege of buying up to 500k shares of ABC at 82.17% of current market value. Thus, new shares would be restricted to friendly interests. The legal staff also found that the entrepreneur and “friendly” members of the board currently owned 175k shares of ABC.

In view of the above information, ABC company is in the process of determining the costs described by the following scenarios:

Scenario #1: Takeover firm makes a move

Gets 50% (plus 1 share) of ABC stock at the current market price level, in addition to shares previously accumulated.

Scenario #2: “Friendly” shareholders come to the rescue

Takeover firm exceeds the number of shares determined in the previous scenario, and gets all the way up to 625,000 shares of ABC. Under the poison pill provision, friendly shareholders purchase to prevent a takeover attempt by the acquiring firm, next to what they already own.

Required: In percentage terms, by how much would the poison pill strategy make the purchase more expensive for the takeover firm?

The Porsche Shop, founded in 1985 by Dale Jensen, specializes in the restoration of vintage Porsche automobiles. One of Jensen's regular customers asked him to prepare an estimate for the restoration of a 1964 model 356SC Porsche. To estimate the time and cost to perform such a restoration, Jensen broke the restoration process into four separate activities: disassembly and initial preparation work (A), body restoration (B), engine restoration (C), and final assembly (D). Once activity A has been completed, activities B and C can be performed independently of each other; however, activity D can be started only if both activities B and C have been completed. Based on his inspection of the car, Jensen believes that the following time estimates (in days) are applicable:

Jensen estimates that the parts needed to restore the body will cost $2000 and that the parts needed to restore the engine will cost $6000. His current labor costs are $500 a day.

1. Which project network is correct?
   

   (i)		(ii)
   (iii)		(iv)

   
   
   
2. What is the expected project completion time?
   
   Critical Path:  
   
   If required, round your answer to one decimal place.
   
   Expected time =  days
   
3. Jensen's business philosophy is based on making decisions using a best- and worst-case scenario. Develop cost estimates for completing the restoration based on both a best- and worst-case analysis. Assume that the total restoration cost is the sum of the labor cost plus the material cost.
   
   If required, round non-monetary answers to the nearest whole number. If required, round monetary answers to the nearest dollar.
   
   Best Case (Optimistic Times) = days
   
   Total Cost = $  
   
   Worst Case (Pessimistic Times) =  days
   
   Total Cost = $  
   
4. If Jensen obtains the job with a bid that is based on the costs associated with an expected completion time, what is the probability that he will lose money on the job? If required, round your answer to the nearest dollar.
   
   Bid Cost = $  
   
   If required, round your answer to two decimal places.
   
   The probability is
   
5. If Jensen obtains the job based on a bid of $19,500, what is the probability that he will lose money on the job?
   
   Note: Use Appendix B to identify the areas for the standard normal distribution. If required, round your answer to four decimal places.
   
   The probability of a loss is

An entrepreneur founded a company (ABC) in 2001. Recently, the stock was trading at $45per share. With 850k shares outstanding, EPS were $1.41. The entrepreneur and the members of the board of directors were initially pleased when another firm purchased 50k shares of ABC stock. However, when the purchasing firm bought another 50k shares, the entrepreneur and members of the board became concerned that the purchasing firm might be trying to take over ABC. The entrepreneur was reminded by the legal staff that ABC had a poison pill provision that took effect when any outside investor accumulated 24% or more of the shares outstanding. Current stockholders, excluding the potential takeover company, were given the privilege of buying up to 500k shares of ABC at 77.91% of current market value. Thus, new shares would be restricted to friendly interests. The legal staff also found that the entrepreneur and “friendly” members of the board currently owned 175k shares of ABC. In view of the above information, ABC company is in the process of determining the costs described by the following scenarios: Scenario #1: Takeover firm makes a move Gets 50% (plus 1 share) of ABC stock at the current market price level, in addition to shares previously accumulated. Scenario #2: “Friendly” shareholders come to the rescue Takeover firm exceeds the number of shares determined in the previous scenario, and gets all the way up to 625,000 shares of ABC. Under the poison pill provision, friendly shareholders purchase to prevent a takeover attempt by the acquiring firm, next to what they already own. Required: In percentage terms, by how much would the poison pill strategy make the purchase more expensive for the takeover firm?

Founded in 1906, Rayovac had become, over the course of the twentieth century, one of the best-known battery producers in the U.S. However in 1996, with its market share steadily eroding due to fierce competition from Duracell, Energizer, and Panasonic, it was purchased by the private equity firm Thomas H. Lee and Partners (THL). Over the next decade the firm embarked upon an ambitious acquisitions program which saw it grow from a $400 million annual revenue business in 1996 to an over $2.8 billion annual revenue business by 2005.

In 2003, the global battery market was worth about $24 billion in sales with the U.S. accounting for about one third of global consumption. About 73% of Rayovac’s revenues came from North America. Though the U.S. market was growing at an annual rate of 7.4%, fierce competition in the U.S. led to considerable price discounting and required significant advertising and promotional expenditures. Rayovac, as the number three player in market share behind Duracell (a division of Gillette) and Energizer, competed as a value brand rather than as a premium brand. It sold a high-quality product but at prices 10-15% below its main competitors. With the proliferation of personal electronic devices, Rayovac expected strong growth to continue, especially in emerging markets around the world as income grew there.

Q1: Do a SWOT analysis for Rayovac.

Strengths:

Weakness:

Opportunities:

Threats: