Difficult Transitions Tony had just finished his first week at Hotel Luxury Incorporated and decided to drive upstate to a small lakefront lodge for some fishing and relaxation. Tony had worked for the previous ten years for the Sun Group Company, but Sun Group had been through some hard times of late and had recently shut down several of its operating groups, including Tony’s, to cut costs. Fortunately, Tony’s experience and recommendations had made finding another position fairly easy. As he drove the interstate, he reflected on the past ten years and the apparent situation at Reece. At Sun Group , things had been great. Tony had been part of the team from day one. The job had met his personal goals and expectations perfectly, and Tony believed he had grown greatly as a person. His work was appreciated and recognized; he had received three promotions and many more pay increases. Tony had also liked the company itself. The firm was decentralized, allowing its managers considerable autonomy and freedom. The corporate Culture was easygoing. Communication was open. It seemed that everyone knew what was going on at all times, and if you didn’t know about something, it was easy to find out. The people had been another plus. Tony and three other managers went to lunch often and played golf every Saturday. They got along well both personally and professionally and truly worked together as a team. Their boss had been very supportive, giving them the help they needed but also staying out of the way and letting them work. When word about the shutdown came down, Tony was devastated. He was sure that nothing could replace Sun Group . After the final closing was announced, he spent only a few weeks looking around before he found a comparable position at the Luxury Hotel. As Tony drove, he reflected that "comparable" probably was the wrong word. Indeed, Luxury Hotel and Sun Group were about as different as you could get. Top managers at Luxury Hotel apparently didn’t worry too much about who did a good job and who didn’t. They seemed to promote and reward people based on how long they had been there and how well they played the never-ending political games. Maybe this stemmed from the organization itself, Tony pondered. Luxury Hotel was a bigger organization than Sun Group and was structured much more bureaucratically. It seemed that no one was allowed to make any sort of decision without getting three signatures from higher up. Those signatures, though, were hard to get. All the top managers usually were too busy to see anyone, and interoffice memos apparently had very low priority. Tony also had had some problems fitting in. His peers treated him with polite indifference. He sensed that a couple of them resented that he, an outsider, had been brought right in at their level after they had had to work themselves up the ladder. On Tuesday he had asked two colleagues about playing golf. They had politely declined, saying that they did not play often. But later in the week, he had overheard them making arrangements to play that very Saturday. It was at that point that Tony had decided to go fishing. As he steered his car off the interstate to get gas, he wondered if perhaps he had made a mistake in accepting the Luxury Hotel offer without finding out more about what he was getting into. Case Questions Task 1. Identify several concepts and characteristics from the field of organizational behavior that this case illustrates. Task 2. What advice can you give Tony? How would this advice be supuported or tempered by behavioral concepts and processes?

Trevor’s furniture company accounts’ information for 2019 is as follows:

near-cash is $500, the amount of money that customers currently owe to the com-
pany for goods that were purchased on credit is $10,000, the amount of accounts

payable is $9,000. Products in inventory are worth $40,000, accumulated deprecia-
tion is 15% of total gross fixed assets. Lands, buildings and equipment were valued

$126,000. 5-Year Debt is $22,950, common stock is $26,000 and retained earnings
at the end of the year is $31,058. Gross profit is $64,000. Fixed cash operating
expenses, variable operating expenses and depreciation are $21,000, $16,000 and

$15,000 respectively. Interest expenses are $6,000 and the tax rate is 21%. Addi-
tionally, regarding stock, the paid in capital in excess of par is $0.75 per common

stock. The number of common stock is 74,000. On the other hand, the cost of
goods sold is half as much as sales. The preferred stock dividend rate is 2% for a
face-value stock value of $9,000. A short-term bank loan of $3,000 is going to be
paid o↵ next month. Finally, promised bonuses for employees (to be paid o↵ soon)
accrue $1,092.

(a) Construct the income statement for this company.
(b) Construct the balance-sheet statement for this company.
(c) Calculate the current ratio and ROE.

Trevor’s furniture company accounts’ information for 2019 is as follows:

near-cash is $500, the amount of money that customers currently owe to the com-
pany for goods that were purchased on credit is $10,000, the amount of accounts

payable is $9,000. Products in inventory are worth $40,000, accumulated deprecia-
tion is 15% of total gross fixed assets. Lands, buildings and equipment were valued

$126,000. 5-Year Debt is $22,950, common stock is $26,000 and retained earnings
at the end of the year is $31,058. Gross profit is $64,000. Fixed cash operating
expenses, variable operating expenses and depreciation are $21,000, $16,000 and

$15,000 respectively. Interest expenses are $6,000 and the tax rate is 21%. Addi-
tionally, regarding stock, the paid in capital in excess of par is $0.75 per common

stock. The number of common stock is 74,000. On the other hand, the cost of
goods sold is half as much as sales. The preferred stock dividend rate is 2% for a
face-value stock value of $9,000. A short-term bank loan of $3,000 is going to be
paid o↵ next month. Finally, promised bonuses for employees (to be paid o↵ soon)
accrue $1,092.
(a) Construct the income statement for this company.
(b) Construct the balance-sheet statement for this company.
(c) Calculate the current ratio and ROE.

The marginal (external) damage cost from air pollutant emission is MD = 20 + Q where Q is the quantity units of pollutants emitted. The marginal control cost associated with pollution cleanup is MC = 200-5Q.

(a) Draw the marginal damage cost and the marginal control cost together.

(b) What is the optimal (or efficient) level of pollution emission? In other words, what is the optimal level of pollution reduction?

(c) Compute the total damage cost and the total control cost at the optimal level of emission.

(d) Suppose the regulator limits the emission at 20 units. Compute the total damage cost and total control cost at that level. Find the sum of the total damage cost and total control cost and compare it to that of optimal emission level. Is the regulator achieving cost-efficiency by limiting pollutants to 20 units?

The fallout from the financial crisis of 2008 included an overheated real estate market, fueled by home purchase incentives, poor lending practices, and securitization through high-risk, mortgage-backed securities, which led to a near collapse of global capital markets. As a consequence, many have argued that if the financial institutions had been required to report their loans (and loan-backed investments) at fair value instead of cost, large losses would have been reported earlier. This would have signaled regulators to the problems in the mortgage markets and therefore minimized the losses to U.S. taxpayers.

Explain how reported accounting numbers might affect an individual’s perceptions and actions. Cite two examples.

In 2018, Caterpillar Inc. had about 665 million shares outstanding. Their book value was $37.0 per share, and the market price was $152.80 per share. The company’s balance sheet shows that the company had $28.50 billion of long-term debt, which was currently selling near par value.

a. What was Caterpillar’s book debt-to-value ratio? (Do not round intermediate calculations. Enter your answer as a decimal rounded to 2 decimal places.)

b. What was its market debt-to-value ratio? (Do not round intermediate calculations. Enter your answer as a decimal rounded to 2 decimal places.)

c. Which measure should you use to calculate the company’s cost of capital?

In 2018, Caterpillar Inc. had about 655 million shares outstanding. Their book value was $30.0 per share, and the market price was $158.30 per share. The company’s balance sheet shows that the company had $17.80 billion of long-term debt, which was currently selling near par value. a. What was Caterpillar’s book debt-to-value ratio? (Do not round intermediate calculations. Enter your answer as a decimal rounded to 2 decimal places.) b. What was its market debt-to-value ratio? (Do not round intermediate calculations. Enter your answer as a decimal rounded to 2 decimal places.) c. Which measure should you use to calculate the company’s cost of capital?

A cinema knows near a university knows that there are two types of consumers: regular people and students. Ordinary people have an aggregate demand curveof? = 10−p/3 while students have an aggregate demand curve of? = 10–2p/3. The marginal cost of the cinema is zero.

a) Suppose students can be separated from other people by their student id, and the cinema charges each group of consumers a different price. What prices would the cinema charge?

b) Suppose the cinema cannot price discriminate. What would be the market price and quantity sold to each group of customers?

c) How much does the cinema gain from price discrimination?

Please show the process to the solution