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All-Canadian, Ltd. is a multiproduct company with three divisions: Pacific Division, Plains Division, and Atlantic Division. The company has two sources of long-term capital: debt and equity. The interest rate on All-Canadian’s $404 million debt is 9 percent, and the company’s tax rate is 30 percent. The cost of All-Canadian’s equity capital is 10 percent. Moreover, the market value of the company’s equity is $606 million. (The book value of All-Canadian’s equity is $434 million, but that amount does not reflect the current value of the company’s assets or the value of intangible assets.)

The following data (in millions) pertain to All-Canadian’s three divisions.

Compute the economic value added (or EVA) for each of the company's three divisions. (Do not round intermediate calculations. Enter your final answers in dollars and not millions.)

1. The proportion of basketball players who have not had a missed shot in MBA last year is 27 out of a sample of top 60 players.

                     (5 marks)

                        Hint: The standard deviation of population and the standard deviation of the sample are unknown, thus you have to use the square root of p(1-p)/n as a best estimate of the standard deviation.

1. Test the hypothesis that the population proportion of basketball players who have not had a missed shot in MBA last year is greater than 0.42 using the critical value approach and a 0.05 level of significance.

2. Test the hypothesis that the population proportion of customers who are completely satisfied is different from 0.5 using the p-value approach and a 0.05 level of significance

A plane delivers two types of cargo between two destinations. Each crate of cargo I is 7 cubic feet in volume and 131 pounds in weight, and earns $20 in revenue. Each crate of cargo II is 7 cubic feet in volume and 262 pounds in weight, and earns $25 in revenue. The plane has available at most 525 cubic feet and 12,576 pounds for the crates. Finally, at least twice the number of crates of I as II must be shipped. Find the number of crates of each cargo to ship in order to maximize revenue. Find the maximum revenue.

abc ltd. revenue for 2012 amounted to $564 000 (2011- $315 000) purchases of inventory for the two years were as follows: 2012 - $303 000 2011 - $182 500 operating expenses were : 2012 $100 000 2011 $78 000 profit before tax at the end of 2012 was $27 500. no dividends had been paid in the last few years. taking into account the above information, the directors decided to change the basis for valuing inventories to weighted average cost as it will result in a more appropriate presentation of events/ transaction in the financial statements of the company.a summary of the closing inventories is provided below: 2009 ($) 2010 ($) 2011 ($) 2012 ($) on the first in, first out method 18 000 19 500 27 000 48 000 on t he wei ght ed aver age cost met hod 19 000 22 900 34 800 51 000required prepare the statement of comprehensive income for abc ltd for the year ended 31 december 2012, applying the new inventory valuation method.

The WIZARD system at Avis

It is possible to rent cars at almost every major airport and city centre in the world, and there is

invariably intense competition to attract and keep customers. Since the hire companies all offer

similar ranges of relatively new vehicles, and the reliability of these cars is taken for granted by

most customers, competition is generally on service and/or price. The most critical service

factor is the availability of the desired category (size and specification) of car, and the speed

with which all the hire contract paperwork can be completed, so that the customer is not

unnecessarily delayed. This depends on the effectiveness of the hire company’s planning and

control system. One of the most important Avis sites in Belgium is the operation at Brussels

National Airport at Zaventem, which deals predominantly with business customers, and hires

out up to 200 cars on a busy day. Avis’s advertisement, targeted at the business market,

emphasizes its ability to process customers quickly and efficiently. The objective is to complete

the transaction in less than two minutes and this is facilitated by Avis’s well-developed

computer system, known as WIZARD, which handles all reservations, preparation of hire

contracts at the service desks, inventory management and invoicing systems. WIZARD is a

globally integrated system, with over 15,000 terminals in Avis branches worldwide, allowing

international reservations to be made with accuracy and certainty, and helping to maximize the

utilization of vehicles throughout the network.

Regular customer surveys and analyses of actual demand patterns are carried out to determine

the customers’ preferences in terms of type and category of vehicles, providing a guide to the

Belgian fleet composition, which is managed from the central ‘clearing house’ at Machelen.

Because each of the Belgian branch offices has access to a pool of cars held at Machelen, their

local buffer stock requirements can be minimized. The requirements for the movement of car

inventory between branches and between countries is centralized in this way, allowing the

branches to concentrate on the task of providing good customer service. Each regular business

customer has a unique reference number in WIZARD, allowing reservations to be made and

rental contracts to be completed quickly, with only three pieces of information: the customer’s

number, the type of car required and the duration of the hire. This type of transaction is usually

completed within two minutes, after which the customer goes directly to the car park and

collects the car.

Questions

1. What do you see as the main planning and control tasks of the Wizard system?

2. How would you evaluate the effectiveness of the planning and control activity at Avis?

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $22.65 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:

Resource consumption is distributed across the activities as follows:

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools.

3. The company recently completed a 600 square foot carpet-cleaning job at the Flying N Ranch—a 51-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N Ranch was $135.90 (600 square feet @ $22.65 per hundred square feet). Calculate the customer margin earned on this job.

If you need more information please ask the cheeg system says there is a bad word in it somewhere and I can't find it.

4. A story in the Wall Street Journal reveals that “Tall Workers Earn More Money”. Ron, the president of a company, wants to know whether the relationship between salary and height exists in his own company, and obtains the following data from the human resources department.

a. Calculate the correlation between salary and height, and describe the relationship between these two variables.

b. How much of the variability in salary can be accounted for by height?

c. Is there a significant correlation between salary and height?

Show all your work. Full marks will not be given unless all steps and all calculations are shown. For all hypothesis tests, include all steps. Remember to provide concluding statements in the proper format.

Case study 4

Three companies were dominant in the skincare market in Oman, battling for the "driver's seat". To get the upper hand the companies followed and implemented many strategies to attract customers and grow in the market.

Manar Professional Skincare Company offered 50% more for the same price for their product 'Bright and Glow's. The company also decided to provide 5% offer on every purchase of the product during summer. Manar Professional Skincare Company offered more quantity than before for the same price.

Latafa Organic Company attracted its customers by providing herbal care. Herbal care was deemed to be healthier by giving good results to skincare and fairness. This increased the trust and loyalty of the customers. The company always focused on the need and want of the customers by conducting regular surveys .The Company introduced new herbal facial creams in three different flavours, like Papaya, Mint and Neem. For each 50 gram of Papaya herbal facial cream the company fixed the price as OMR .999 baiza.

Rayan Beauty Company attracted customers by launching a whole new soap product category that results in healthier and fairer skin. They decided to reach the customers by giving the best quality with a high price. This strategy helped because the soaps were considered to be less harmful than fairness creams. The Rayan Beauty Company‟s motive was to always satisfy the customers.

Question 4

i.

ii.

Comment on the various pricing strategies followed by the Manar Professional Skincare

Company & Rayan Beauty Company in the above case.                              (4 Marks–100 /125 words)

Analyse whether Latafa Organic Company can be successful with its pricing strategy.

(3 Marks–75 / 100 words)

iii.   Did Latafa Organic Company and Rayan Beauty Company follow any evolution of marketing

concepts? Justify your answer with the various stages.                                    (3 Marks–75 / 100 words)