Strategy Memo In this simulation, you are assigned the role of Senior Vice President for Marketing at Enhanced Analytics, Inc., a provider of marketing and consulting services, with headquarters in Austin, Texas. In this role, you report directly to the CEO of the company and are responsible for decision-making and marketing strategy. You oversee a department with 25 employees at the company. The CEO of the company has informed you at the weekly executive meeting that Premier Drinks of Sofia, Bulgaria - a key client of Enhanced Analytics, Inc. - has reported a drop-in sales, despite an expensive and carefully managed marketing campaign produced by your department. The management of Premier Drinks reports increased competition in the soft drink market in Bulgaria. Two companies - one from Poland and one from Germany - have recently established operations in the country. You were already aware of the trends in the local competitive environment from the periodic reports received from your campaign manager in Bulgaria. You have also studied the marketing efforts of some of your client's competitors and continue to believe that your campaign, particularly the promotional and pricing strategy adopted, is superior. The managers of Premier Drinks suspect that their local competitors have made payments to some of the local officials in exchange for an opportunity to sell their products in local government buildings and at sporting events, many of which have been off-limits to Premier Drinks. This lack of access has put a dent in the sales figures of Premier Drinks, and the company is now seeking guidance from Enhanced Analytics as to how to proceed. The executive team of Enhanced Analytics, led by the CEO, will be meeting to review options, next week. In your own words, prepare a report for the company's executives, containing the following sections (do not worry about being right or wrong; simply offer your perspective on the company’s situation and your recommendation):

1. Situation analysis - an overview of the client's business and the competitive landscape in the soft drink industry in Bulgaria (if you are unable to locate country-specific data, you may research the Eastern European market or the European Union, as a whole)

2. Problem Identification - in one or two paragraphs, clearly identify the problem faced by your client

3. Decision Options - an outline of 4 specific courses of action / decisions that your client can make to solve the problem. The purpose of this section is to get a clear overview of the options available to management. Because the company has limited resources, management will have to pick the best option

4. Decision - a clear recommendation, outlining which one of the 4 options is the best

5. Justification - a clear, concise justification of your decision from #4 Include outside research to support your ideas and recommendation. There is no page limit to this assignment. The assignment will be considered well-done if it contains all the required sections, if it is clearly written and your thoughts and ideas are supported by specific data and research.

Maleficent Company Limited is preparing budget based on the information below.

1. Budget sales revenues:

2. Past experience indicates that customers usually settle their balances as follows:

   • - 60% of a month's credit sales are collected in the month of sale; and

   • - the remaining 40% of a month's credit sales are collected in the following month.

3. All purchases are made on credit, 50% are paid in the month of purchase and 50% will be settled in the month following purchase. Budgeted inventory purchases are:

January $ 550,000

February $460,000

March $575,000

4. Other budgeted cash disbursements:

   1. (i) Purchase of equipment in February for $45,000 in cash;

   2. (ii) Selling and administrative expenses of $28,000 per month; and

   3. (iii) Dividends of $35,000 to be paid in March.

5. The cash balance as at 1 February 2020 was $50,000. It is the company policy to maintain the minimum cash balance at $50,000 at the end of each month. Therefore, the company has a credit arrangement with its bank to borrow at the beginning of any month at 8% annual interest, if necessary. The principal amount together with interest will be repaid when it has enough cash.

Required:

1. (a) Prepare a cash budget for February and March.

2. (b) Budgeting is an important management tool if implemented properly. Identity positive results when budgets are properly used.

3. (c) The CEO of Maleficent Company Limited considers to implement Zero-based budgeting and requires managers of all divisions to examine every cost and budget item in order to create budgets based on perceived needs for the coming period, regardless of what was done in previous years.

   1. (i) How does Zero-based budgeting differ from traditional budgeting?

   2. (ii) What are the possible advantages and disadvantages of adopting Zero-based budgeting approach?

Question 1

A Japanese firm manufactures cars in the US. Assume that each car sells for $20,000 to a consumer in the US. Also assume that on each car the Japanese manufacturer earns $2000 in profits and remits those to the holding company in Japan. Assume that the car is manufactured with US made parts only.

What is the contribution of each car to the US GNP?

1. $ 18,000
2. $20,000
3. $22,000
4. $2,000

Question 2

A Japanese firm manufactures cars in the US. Assume that each car sells for $20,000 to a consumer in the US. Also assume that on each car the Japanese manufacturer earns $2000 in profits and remits those to the holding company in Japan. Assume that the car is manufactured with US made parts only.

What is the contribution of each car to the US GDP?

1. $20,000
2. $18,000
3. $22,000

Question 3

A nation that has been a net receipient of foreing investment is likely to have its GDP exceed its GNP.

1. True
2. False

Question 4

How would the following activity get counted in the GDP?

I purchase a used car from another individual (the car's current owner) for $2000. There are no other parties involved.

1. Since I am a consumer, the entire $2000 will count in the consumption spending of the GDP.
2. Since a car is a good that can be used for several years, the entire $2000 will count in the consumption spending component of the GDP
3. Since a car is an investment, the entire $2000 will count in the investment component of the GDP
4. Since this is a used car, none of the $2000 will count in the GDP.

Question 5

Consider the following scenario:

I purchase a used car from a used car dealer. The car's price is $2000. Out of that $2000, $400 constitutes the profits of the dealer. How would this trade enter the GDP?

1. The entire $2000 gets included in the consumption spending of the GDP.
2. Only the $400 dollar profit of the dealer will enter the GDP in the consumption account.
3. Only the $1600 difference will enter the GDP, the consumption account.
4. Nothing will enter into the GDP

You have just been appointed as an innovation manager in an ambitious medium-sized company designing and producing power tools (such as drills and saws). The company wants to promote breakthrough innovation. One of your first tasks is to think about innovation performance metrics to use. What advice will you give to the CEO regarding the metrics?

Identify the fallacies of insufficient evidence in the following arguments. If no fallacy is committed, write “no fallacy.

9. Either you support preferential treatment for disadvantaged minorities in university admissions, or you’re a racist. But surely, you’re not a racist. Therefore, you support preferential treatment for disadvantaged minorities in university admissions.

11. Students have asked that we extend residence hall visitation hours by one hour on Friday and Saturday nights. This request will have to be denied. If we give students an extra visitation hour on weekends, next they’ll be asking us to allow their boyfriends and girlfriends to stay over all night. Eventually, we’ll have students shacking up in every room.

13. A Saint Bernard is large, cuddly, furry, and makes a great house pet. A baby grizzly bear is also large, cuddly, and furry. Therefore, a baby grizzly bear would make a great house pet, too. 15. You’re not seriously thinking of voting for that bum, are you? Why don’t you wake up and smell the coffee?

You are the auditor of Crane Inc., the Canadian subsidiary of a public multinational engineering company that offers a defined benefit pension plan to its eligible employees. Employees are permitted to join the plan after two years of employment, and benefits vest immediately. You have received the following information from the fund trustee for the year ended December 31, 2020:

Other relevant information:

Prepare a pension work sheet for the company. Assume IFRS is followed.

Prepare the employer’s journal entries to reflect the accounting for the pension plan for the year ended December 31, 2020.

The following information relates to the 2020 debt and equity investment transactions of Pina Colada Ltd., a publicly accountable Canadian corporation. All of the investments were acquired for trading purposes and accounted for using the FV-NI model, with all transaction costs being expensed. No investments were held at December 31, 2019, and the company prepares financial statements only annually, each December 31, following IFRS.

You are the international manager of a Canadian pharmaceutical company that has just developed a new drug that can perform the same functions as the competition’s but costs only half as much to manufacture. Your CEO has asked you to formulate a recommendation for how to expand into Western Europe. You can choose to 1. Export from Canada; 2.License a European firm to manufacture and market the new drug in Europe; or 3.Set up a wholly owned subsidiary in Europe. Which option would you choose and why?

Waymo is a division of Alphabet (Google’s parent company) that is developing the technology for driverless

cars. Waymo CEO John Krafcik is under pressure to offer a commercial driverless taxi service in the Phoenix

area as soon as Fall 2018. Analysis at web-site arstechnica.com suggests that Waymo has by far the most

advanced technology available for this type of service.

Is it likely that being first into this market will give them a large advantage? Is Waymo likely to earn

unusually high accounting profit for a long period of time? Discuss using concepts from this class.