The following table presents financial data from 2018 annual reports of six pharmaceuticals companies. The market value of equity for five companies is also given. All numbers are in millions of dollars. Novartis had a book value of $1,349 million in 2017. In addition, Novartis had 4,900 million shares outstanding throughout the year.

Using these numbers:

1. Calculate relevant multiples.                                                                              [6 marks]
2. Estimate a value for Novartis.                                                                            [2 marks]
3. What should be the value per share of Novartis? If the stock of Novartis is now traded at $1.10 (per share), should you buy this stock?                             [2 marks]

In order to compare the satisfaction of customers of 2 competitor companies of , 174 customers of company A and 355 customers of company B were chosen randomly. Customers were required to rate the companies from level 1 (least satisfaction) to 5 (maximum satisfaction). The results are included below. Check whether the difference in the mean level of customers' satisfaction of the two companies is statistical important at 1%. The results are included below:

Company A   Company B
Sample Size   174   355
Sample mean   3.51   3.24
Sample Standard Deviation (S)   0.51   0.52

1. A taste-testing experiment has been designed so that four brands of Colombian coffee are to be rated by nine experts. To avoid any carryover effects, the tasting sequence for the four brews is randomly determined for each of the nine expert tasters until a rating on a 7-point scale (1=extremely unpleasing, 7=extremely pleasing) is given for each of the following four characteristics: taste, aroma, richness, and acidity. The following table displays the summated ratings-accumulated over all four characteristics.

1. State a null and alternative hypothesis to determine if a difference exists between four different brands for a parametric and a nonparametric test.
2. Check the necessary conditions.
3. Give your conclusion from both tests and a final conclusion. Use .

2. Suppose a company is looking at the time between computer failures in 3 different locations. The data are given below:

1. Test for Normality
2. State a null and alternative hypothesis to determine if a difference exists between three different locations for a parametric and a nonparametric test.
3. Give your conclusion from both tests and a final conclusion. Use .

international marketing The Euro Yo-Yo

Since the inception of the European Monetary Union (EMU) on January 1, 1999, the ups and downs of the euro have created challenges and opportunities for global companies. The euro’s volatility has also compounded the economic problems of the 12 countries in the euro zone. The euro began its life as an electronic medium with an exchange rate set at €1 equal to $1.161. Then, the unexpected happened: The euro’s value plunged relative to the currencies of Europe’s major trading partners. The lowest point came in October 2000, when one euro was worth only about 83 cents. By December, the euro has strengthened to about 97 cents; it then plunged again in mid2001. Euro coins and bills began to circulate on January 1, 2002, after which the euro began to steadily gain strength. By mid-2003, as the war in Iraq and the ballooning deficit raised concerns about U.S. economy, the euro’s value had strengthened to a monthly average of $1.17. The euro’s volatility forces businesses that export to Europe to think carefully about business strategies and policies. One such company is Markel Corp, a Philadelphia-based manufacturer of cable-control tubing and insulated wire used in the automotive and appliance industries. About 40 percent of Markel’s $26 million in sales is generated in Europe; important euro zone customers are located in Spain, the Netherlands and Germany. In an effort to build up market share, company president Kim Reynolds aim to hold prices steady for Markel’s euro zone customers; contracts with euro zone customers call for payment in euros. The strategy is paying off; today, Markel commands about 70 percent of the global market for high-performance tubing. This success came at a cost, however; as the euro plunged in value, Markel’s losses mounted. In 2000, the company suffered a currency loss of $650,000; losses in 2001 and 2002 amounted $400,000 and $225,000 respectively. However, Reynolds hedges his exchange risk by buying forward contracts that guarantee him a set number of dollars for each euro his customers pay. Even so, Reynolds was forced to institute pay cuts for salaried employees and cancel year-end bonuses and dividends to shareholders. The situation has changed dramatically as the euro has gain strength again; in 2003, Reynolds expects a currency gain of up to $500,000. Policy makers in the 12 euro zone nations are also facing challenges. Here too, an analysis of the Euroland economy must begin by addressing issues related to the currency’s volatility. Twelve nations make up Euroland: Germany, France, Spain, Portugal, Luxembourg, the Netherlands, Ireland, Italy, Austria, Finland, Belgium and Greece. Sweden voted in late summer of 2003 to retain the Krona. No doubt the volatility of the euro was a consideration, as was the desire to preserve Sweden’s generous social welfare system. There is more support for the euro in the remaining two holdouts. According to Eurobarometer, an EU public opinion poll, 53 percent of the citizens of Denmark now favour the common currency. By contrast, in the United Kingdom, only 24 percent support a change to the euro. It is possible that both countries will wait until 2006 to put the euro to a vote again. Given the challenges faced by companies such as Markel and the governments in the euro zone, it is fair to ask whether the euro experiment has been a success or a failure. Is there a bright future ahead for the new currency zone or will the old problems of an inflexible labor market and slow growth continue to plague Europe? European economic success will depends on a strong American economy. Trade with the United States will create economic growth in Europe. Increasingly stressed relations resulting from American export tax relief and European Union preferential tariffs work to limit free trade and growth. 2 | P a g e M K T G 3 4 1 0 / J u n e 2 0 2 0 Enlargement of the European Union is sustaining the drive toward open free trade and competitiveness that began with the coal and steel communities, but Europe needs to wake up to the fact that globalization has passed enlargement by. Global capital flows, global sourcing of products and global movement of people are facts of modern economic life. While Europe goes about the business of building its federal nation state, it must also go about the business of building institutions and attitudes that are necessary to accommodate the global market.

1. What are the business implications due to the volatility of the euro?

2. Why 74 percent of citizens of United Kingdom are not support the euro?

3. Why Markel Corp suffers from currency losses?

Question:

Many companies publicly describe their performance using terms such as “EBITDA” or “earnings purged of various expenses” because they believe these terms more effectively reflect their companies’ performance than GAAP-defined terms such as net income. What ethical issues might arise from the use of such terms and what challenges does their use present for the governance of the company by stockholers and directors?

Many companies publicly describe their performance using terms such as “EBITDA” or “earnings purged of various expenses” because they believe these terms more effectively reflect their companies’ perfor-mance than GAAP-defined terms such as net income. What ethical issues might arise from the use of such terms and what challenges does their use present for the governance of the company by stockhold-ers and directors?

During 2019, Pacific, Inc. (PI) had the following transactions with its clients (customers).

1. Feb 1, 2019 PI received cash of $6,400 from clients in payment of their account balances from Dec 31, 2018.

2. On Nov 1, 2019, PI received $3,400 cash as payments in advance for services to be performed in 2020.

3. PI received a total of $20,000 in cash for services that were performed in 2019.

4. PI sent bills totaling $5,400 to customers for services performed during 2019; this amount was unpaid as of Dec 31, 2019.

What is the amount of Service Revenue that will be reported on the accrual basisincome statement for the year 2019?

Question 4 options:

You run a game-day shuttle service for parking services for the local ball club. Suppose you are compensated $16 per customer, per ride. In other words, your marginal revenue is $16. Your costs for different customer loads are summarized in the following table. For each customer load, calculate both the marginal cost and the average cost. Then answer the question that follows. Note: Round your answers to the nearest cent. Customers Total Cost Marginal Cost Average Cost ($) ($ per customer) ($ per customer) 1 $30 $ $ 2 $34 $ $ 3 $42 $ $ 4 $54 $ $ 5 $70 $ $ 6 $90 $ $ 7 $114 $ $ 8 $142 $ In order to maximize profits, you should carry customers per load.

Ricardo Heavy Hauling has some earth-moving equipment that cost $362,000; accumulated amortization is $241,400. Ricardo traded equipment with another construction company. The fair value of Ricardo’s old equipment is estimated to be $188,500, and the fair value of the equipment being acquired is estimated to be $238,800. Four different possible scenarios are presented below:

1. The new equipment will perform essentially the same tasks as the old equipment. The estimate of the fair value of the new equipment is the more reliable of the two estimates. The exchange is a straight swap and no cash changes hands.
2. The new equipment has very different functions than the old equipment. The new equipment will permit Ricardo to attract new business that it had previously been unable to obtain. The fair value estimate of the new equipment is the more reliable of the two estimates. The exchange is a straight swap and no cash changes hands.
3. In addition to exchanging its old equipment, Ricardo pays $20,200 cash. The characteristics of Ricardo’s operating cash flows will change as a result of the exchange. The fair value of the old equipment is the more reliable estimate.
4. Assume the same facts as in (c) above, except that the exchange will not significantly alter Ricardo’s cash flows.
5. A large truck, which cost Company A $84,200 ($50,500 accumulated depreciation), has a market resale value of $59,000. The truck is traded to a dealer, plus a cash payment of $16,800, for a new truck that will perform essentially the same services as the old truck, but will look a lot nicer to the customers. The new truck has a list price of $79,800, although discounts of 3% to 4% may be negotiable.
6. Rochester Shipping Co. received a new ferry that has a normal purchase price of $1.90 million. In exchange, the company gave the vendor a parcel of land and a building located on the waterfront. The market value of the land and building is $1.72million. The land cost $448,600; the building cost $1,046,800 and is 30% depreciated. The vendor will use the land and building to operate a maintenance facility. The new ferry will enable Rochester Shipping to launch a new ferry service across Lake Ontario. The ferry was available because the buyer for whom it had been built went bankrupt and was unable to take delivery. The boat remained unsold for two years before Rochester was able to negotiate the exchange. Because the boat had been dormant for so long, it needed some upgrading and maintenance. Rochester agreed to pay for the necessary work, which was estimated to cost $450,000.

7 Journal Entries---Transaction List:

• 1. Record the exchange assuming the new equipment will perform essentially the same tasks as the old equipment.

• 2. Record the exchange assuming the new equipment has very different functions than the old equipment, and recognise gain/loss on exchange.

• 3. Record the exchange assuming Ricardo pays $20,200 cash in addition and operating cash flows will change as a result of the exchange, and gain/loss on exchange.

• 4. Record the exchange assuming Ricardo pays $20,200 cash in addition and the exchange will not significantly alter Ricardo’s cash flows.

• 5. Record the exchange assuming a large truck, which cost Company A $84,200 ($50,500 accumulated depreciation), has a market resale the truck is traded to a dealer, plus a cash payment of $59,000, value of $16,800, new truck has a list price of $79,800, although discounts of 3% to 4% may be negotiable.

• 6. Record the exchange assuming Rochester Shipping Co. received a new ferry that has a normal purchase price of $1.90 million, The market value of the land and building is $1.72 million. The land cost $448,600; the building cost $1,046,800 and is 30% depreciated.

• 7. Record the exchange assuming Rochester agreed to pay for the necessary work, which was estimated to cost $450,000.

You work for a business information firm that provides clients with summaries of publicly available information on a range of businesses. Your boss comes to you and says that an increasing number of clients have been asking that the firm develop a catalog of company profiles on businesses that have something to do with the oil and gas industry. The clients want this catalog so that they can quickly identify which companies they may want to carry out additional research on, and possibly have your firm do that research. You’ll need to write company profiles that provide an objective, fact-based summary of:

1. What the company does;
2. How it has performed; and
3. What challenges and/or successes the company has had over the past 3–5 years.

You are to write a profile of either a company that is focused on one activity in the oil and gas industry (e.g., a small exploration and production company, or a small service company whose primary business is drilling wells) or one business unit within a larger company involved in multiple industry activities (e.g., the refining unit of an integrated oil and gas company, or the seismic survey unit of a large, multi-purpose service company).