Questions
What would a potential new price/payment method be that could be revolutionary? If a company is...

  1. What would a potential new price/payment method be that could be revolutionary?
  2. If a company is operating at a deficit, but has happy customers, what would the best strategy be to make money?
  3. Why should a company’s pricing strategy reflect their core values ?
  4. Should consumers make it a point to review a company’s core values before investing?

Product pricing is one of the most important determinants of company success. A product’s market price must account for numerous competitive factors, including research and development costs, target market size, lifetime customer value, marketing and acquisition costs, and competitive positioning. Yet for all the complexity involved in determining ideal pricing, a Chargebee and ProfitWell survey of software founders and executives found that companies spend an average of just 12 hours on their pricing. Not 12 hours for each product — just 12 hours total in the history of the company.

One reason for the disconnect between pricing’s impact and the time invested could be difficulty in understanding pricing strategies. As recently explained in a guide by Cobloom, the software as a service market employs a variety of pricing models (e.g., flat rate, usage based and tiered), strategies (e.g., free trials) and psychological pricing tactics that impact how buyers process pricing information. Such psychological tactics include tricks like charm pricing (featuring amounts that end in nine, such as $39 instead of $40) and decoy pricing that places an obviously less desirable option among three bundled packages to increase the perceived value of the other options.

While these strategies might seem obvious or purposefully deceptive, they continue to be used, because they work. Research has found that decoy pricing generates additional revenue. And if you think no one falls for charm pricing, guess again. A famous study by researchers at the University of Chicago and MIT found that an item of clothing marked $39 outsold identical items priced at $44 or even $34.
As CFO, I focus on developing pricing that supports customer acquisition and long-term fiscal stability. But as part of a purpose-driven leadership team, our product pricing is also viewed through the lens of our corporate values considering shared customer value and sustainability. While we are absolutely driven by revenue, we also gut check our decisions against core company values. Below are some of these values and how they can help your company’s own pricing strategy.

1. Put customer value first.

Many of the widely used technology pricing strategies focus heavily on company revenue and internal metrics rather than end-user value. As an example, many companies take the simplified approach of calculating their product development and production costs and then adding their desired margin, and they use that information to set pricing. Unfortunately, this model is based entirely on internal metrics that have no connection to customer preference, price sensitivity or even competitive pricing. Another widely used example is pay-per-feature pricing. This model relies on a core set of features to entice new customers and adds charges as users evolve and want more advanced functionality. While it offers companies a reliable growth channel, this kind of pricing tends to create resentment with users who are paying for a product and can’t access all of its features.

Putting customer value first requires an innovative, research-based approach to understanding how end users will be using your product, as well as flexibility in designing pricing structures to take into account different product usage rates and feature consumption between departments and locations. Some examples of innovation in pricing include companies such as Amazon Web Services, Uber or Airbnb with prices based on actual usage. The only drawback to this approach is it can lead to higher-than-expected bills when customers need to add capacity or service during popular or “surge” time frames. And while these strategies might work for the vendor, research indicates consumers and technology buyers prefer the simplicity and predictability of flat-rate pricing
2. Keep your pricing promises.

In 2011, Netflix lost 800,000 customers after an unexpected price hike and service change. Based on backlash, the company quickly reversed the change. Earlier this year, history repeated itself as new subscriber acquisition slowed and Netflix announced a new price increase, followed immediately by a stock price plummet and the loss of more than 126,000 subscribers. Customers usually don’t react well to paying more without a significant increase in features, usability or overall value — a lesson many freemium-driven companies are finding out the hard way. Although there are some success stories, such as Spotify’s impressive freemium-to-paid conversion rate, sticking with your pricing strategy in the long term can be as important as the strategy itself when it comes to customer retention.

3. Lead; don’t follow.

Most new companies founded today will enter a market with existing competition. As a leader focused on consumer value, I would challenge you to do your customer research and set your initial pricing based entirely on your unique offering and reason for being. Only then look at the rest of the market and determine how your choice will support or ensure success. When our company launched conference-calling services more than 20 years ago, there was significant competition in the space charging hundreds of dollars per month to deliver services to big corporate clients. Our founder looked at the market from the consumer point of view and found a way to deliver services for free while still generating revenue from carrying calls on our network. Other examples of pricing leadership include Slack, one of the pioneers of charging based on active users, and Creately’s albeit-short-lived “pay whatever you want” experiment.

No single decision can have a more far-reaching effect on company success than pricing. But pricing decisions should always be considered holistically as part of a long-term, value-based model. Pricing strategies that leverage who you are as a company and what you value create a foundation of mutual benefit that helps everyone from your customers and partners to your shareholders and employees.

In: Operations Management

On January 1, 2020, Mr. Wild formed a corporation to provide services to clients. Information about...

On January 1, 2020, Mr. Wild formed a corporation to provide services to clients. Information about the first year of operation follows:
Jan. 1 Investors provided $1,500,000 in cash in exchange for stock of The Wild Corporation.
Jan. 1 Purchased equipment in exchange for $100,000 cash and a $1,900,000 note payable at an annual rate of 5%, payable every 6 months.
Jan. 1 Purchased $45,000 of insurance that will cover the next 3 years. This was recorded as prepaid insurance.
Feb. 1 Purchased $5,000 of office supplies on account that will be needed during the upcoming year.
Mar. 15 Paid Salaries of $20,000.
Mar. 31 Billed customers for services in the amount of $500,000.
Apr. 15 Paid the vendor who sold Wild the office supplies on Feb. 1.
Apr. 30 Collected $400,000 on accounts receivable.
June 15 Paid salaries of $40,000.
June 30 Paid $4,000 for employee travel costs.
June 30 Paid $10,000 for a company party.
June 30 Paid the interest due and $400,000 to reduce the balance of the note payable.
July 1 Billed customers for services provided in the amount of $750,000.
Aug 1 Collected $200,000 on accounts receivable.
Aug. 15 Purchased $15,000 of office supplies on account.
Sept. 15 Paid salaries of $40,000.
Sept. 30 Paid $25,000 for a customer appreciation event.
Sept. 30 Paid $40,000 for employee travel costs incurred by staff.
Dec. 1 Collected $300,000 as deposits from customers who contracted for 2021.
Dec. 31 Declared and paid a $50,000 dividend to shareholders.
The Wild Corporation uses the following accounts in it's Chart of Accounts:
Cash
Accounts Receivable
Office Supplies
Prepaid Insurance
Equipment
Accumulated Depreciation
Accounts Payable
Interest Payable
Unearned Revenue
Notes Payable
Capital Stock
Retained Earnings
Dividends
Service Revenue
Salaries Expense
Meals & Entertainment Expense
Travel Expense
Insurance Expense
Office Supplies Expense
Interest Expense
Depreciation Expense
Income Summary
COMPLETE THE FOLLOWING:
(a) Journalize the listed transactions.
(b) Post the transactions to the appropriate general ledger accounts.
(c) Prepare a trial balance as of December 31.

In: Accounting

Journalize the entries for the following transactions. Refer to the Chart of Accounts for exact wording...

Journalize the entries for the following transactions. Refer to the Chart of Accounts for exact wording of account titles. (Note: The company uses a clearinghouse to take care of all bank as well as non-bank credit cards used by its customers. )

A. Sold merchandise for cash, $34,900. The cost of the goods sold was $24,081.
B. Sold merchandise on account, $267,200. The cost of the merchandise sold was $184,368.
C. Sold merchandise to customers who used MasterCard and VISA, $166,200. The cost of the merchandise sold was $114,678.
D. Sold merchandise to customers who used American Express, $68,700. The cost of the merchandise sold was $47,403.
E. Received an invoice from National Clearing House Credit Co. for $7,840, representing a service fee paid for processing MasterCard, VISA, and American Express sales.

CHART OF ACCOUNTSGeneral Ledger

ASSETS
110 Cash
120 Accounts Receivable
125 Notes Receivable
130 Inventory
131 Estimated Returns Inventory
140 Office Supplies
141 Store Supplies
142 Prepaid Insurance
180 Land
192 Store Equipment
193 Accumulated Depreciation-Store Equipment
194 Office Equipment
195 Accumulated Depreciation-Office Equipment
LIABILITIES
210 Accounts Payable
216 Salaries Payable
218 Sales Tax Payable
219 Customer Refunds Payable
220 Unearned Rent
221 Notes Payable
EQUITY
310 Common Stock
311 Retained Earnings
312 Dividends
REVENUE
410 Sales
610 Rent Revenue
EXPENSES
510 Cost of Goods Sold
521 Delivery Expense
522 Advertising Expense
524 Depreciation Expense-Store Equipment
525 Depreciation Expense-Office Equipment
526 Salaries Expense
531 Rent Expense
533 Insurance Expense
534 Store Supplies Expense
535 Office Supplies Expense
536 Credit Card Expense
539 Miscellaneous Expense
710 Interest Expense

Journalize the entries for the transactions on December 31. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

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5

6

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8

9

10

11

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In: Accounting

The 2019 annual report for a company includes the following items in its footnotes: a. The...

The 2019 annual report for a company includes the following items in its footnotes:
a. The useful life of machinery has been increased from 10 to 15 years.
b. The expected tax rate used to calculate income tax provision has increased from 33% to 38%.
c. The company has started to capitalize small tools purchased beginning in 2006.

For each of the above, determine the effect (higher, lower, or unchanged) of the change on the ratios listed below for the year 2019 and state the reason for the effect (increase(s) and/or decrease(s) in which accounts cause the change):

a. Debt-to-equity
b. Return on assets
c. Cash Flow from operations

In: Finance

this homework should be done in 30 minute Draw a Use Case Diagram based on the...

this homework should be done in 30 minute

Draw a Use Case Diagram based on the following narrative:

A company called Joyful Foods is introducing a system that allows customers to make food orders through their mobile phones. Customers can register new accounts, which include validating credit card information. They can view the menus of various restaurants and they will have the option of checking the restaurants' ratings while doing so. Customers also can rate any restaurant with a rating from 1-10. When they make food orders, they will have the option of paying online. Company staff will have to confirm food orders with the customers by calling them to make sure that the orders are valid. Furthermore, the company hired drivers will be able to view order information to see the location of the customers. Lastly, managers will be able to grant monthly rewards for drivers after checking their performance.

In: Computer Science

1. A researcher wants to know if the typing speed of a secretary in words per...

1. A researcher wants to know if the typing speed of a secretary in words per minute is related to the time in hours that it takes to learn the new word processing program. Below is speed versus hours to learn program. What is the regression equation? Typing speed --48- 74 - 52-- 79-- 83-- 56-- 85-- 63-- 88-- 74-- 90-- 92 Time hrs.----- --7---- 4---- 8 -- 3.5 --2 -- 6 ---2.3-- 5 -- 2.1-- 4.5--1.9- 1.5 Select one: a. y = 0.19 x - 18.7 b. y = 0.354 x - 21.3 c. y= -0.137 X + 14.086 d. y = 0.34 X - 19.8

2. A researcher wants to know if the typing speed of a secretary in words per minute is related to the time in hours that it takes to learn the new word processing program. Below is speed versus hours to learn program. Find the 90 % prediction interval for number of hours it would take an average secretary who has a typing speed of 72 words per minute to learn the word processing program.

Typing speed --48- 74 - 52- 79-- 83- 56- 85- 63- 88- 74- 90- 92
Time hrs.----- --7- ---4--- 8 - 3.5----2 - 6 --2.3- 5 - 2.1- 4.5-1.9- 1.5

Select one:

a. 2.5 < y < 5.4

b. 3.34 < y < 5.1

c. 4.5 < y < 6.25

d. 2.5 < y < 4.8

3. A researcher wants to know if the typing speed of a secretary in words per minute is related to the time in hours that it takes to learn the new word processing program. Below is speed versus hours to learn program. What is the correlation coefficient?

Typing speed --48- 74 - 52- 79-- 83- 56- 85- 63- 88- 74- 90- 92
Time hrs.----- --7- ---4--- 8 - 3.5----2 - 6 --2.3- 5 - 2.1- 4.5-1.9- 1.5

4. A researcher wants to know the relationship between the number of cows ( in thousands) in certain counties and the milk production ( in million pounds).
The data is shown below. Estimate the amount of milk if there are 125 million cows in the county. Write answer in millions of pounds (85 if there are 85 million pounds)

Cows (millions) ------70-----3-----194-----12-----46-----65
Milk (Million #)--------115----5-----289-----15-----72-----92

5.

Question text

A researcher wants to know if the typing speed of a secretary in words per minute is related to the time in hours that it takes to learn the new word processing program. Below is speed versus hours to learn program. Predict the number of hours it would take an average secretary who has a typing speed of 72 words per minute to learn the word processing program.

Typing speed --48- 74 - 52- 79-- 83- 56- 85- 63- 88- 74- 90- 92
Time hrs.----- --7- ---4--- 8 - 3.5----2 - 6 --2.3- 5 - 2.1- 4.5-1.9- 1.5

6.

Question text

A researcher wants to know if the typing speed of a secretary in words per minute is related to the time in hours that it takes to learn the new word processing program. Below is speed versus hours to learn program. Find the standard error of estimate for an average secretary who has a typing speed of 72 words per minute to learn the word processing program.

Typing speed --48- 74 - 52- 79-- 83- 56- 85- 63- 88- 74- 90- 92
Time hrs.----- --7- ---4--- 8 - 3.5----2 - 6 --2.3- 5 - 2.1- 4.5-1.9- 1.5

In: Statistics and Probability

Faubert failed to accrue $10,000 of Interest Revenue for interest earned in Year 2. Revenue was recorded when the cash collection was received in Year 3.

Faubert failed to accrue $10,000 of Interest Revenue for interest earned in Year 2. Revenue was recorded when the cash collection was received in Year 3. 

 

In: Finance

The 2015 financial statements for the Ernst and Young companies are summarized here: Ernst Company Young...

The 2015 financial statements for the Ernst and Young companies are summarized here:


Ernst
Company		 Young
Company
  Balance sheet
  Cash $ 42,700 $ 22,000
  Accounts receivable (net) 39,200 31,800
  Inventory 100,200 40,100
  Operational assets (net) 141,500 401,700
  Other assets 84,300 305,800
  
  Total assets $ 407,900 $ 801,400
  
  Current liabilities $ 97,700 $ 48,900
  Long-term debt (9%) 64,700 59,700
  Capital stock (par $10) 149,200 512,000
  Contributed capital in excess of par 29,100 104,300
  Retained earnings 67,200 76,500
  
  Total liabilities and stockholders’ equity $ 407,900 $ 801,400
  
  Income statement
  Sales revenue (1/3 on credit) $ 447,900 $ 802,700
  Cost of goods sold (242,100 ) (398,400 )
  Expenses (including interest and income tax) (16,300 ) (312,600 )
  
  Net income $ 189,500 $ 91,700
  
  Selected data from the 2014 statements
  Accounts receivable (net) $ 19,400 $ 39,400
  Inventory 95,600 45,800
  Long-term debt 61,000 49,600
  Other data
  Per share price at end of 2015 (offering price) $ 24 $ 22
  Average income tax rate 40 % 40 %
  Dividends declared and paid in 2015 $ 34,200 $ 148,300


The companies are in the same line of business and are direct competitors in a large metropolitan area.Both have been in business approximately 10 years, and each has had steady growth. The management of each has a different viewpoint in many respects. Young is more conservative, and as its president has said, “We avoid what we consider to be undue risk.” Neither company is publicly held. Ernst Company has an annual audit by a CPA but Young Company does not.


Required:
1.

Complete a schedule that reflects a ratio analysis of each company. (Round your answers to 2 decimal places. Enter percentage answers rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)

Ratio Earnst Young
Return on equity
Return on assets
Financial leverage percentage
earnings per share
profit margin
Fixed aset turnover
cash to ratio
current ratio
quick ratio
receivable turnover
inventory turnover
debt/equity ratio
price/earnings ratio
Dividend yield ratio

     

In: Accounting

The SAT is required of most students applying for college admission in the United States. This...

The SAT is required of most students applying for college admission in the United States. This standardized test has gone through many revisions over the years. In 2005, a new writing section was introduced that includes a direct writing measure in the form of an essay. People argue that female students generally do worse on math tests but better on writing tests. Therefore, the new section may help reduce the usual male lead on the overall average SAT score (The Washington Post, August 30, 2006). The data provided is a sample of 60 students and their writing scores on the SAT from last year. The goal of this case study is to analyze the data and make conclusions about the population SAT scores and the difference between male and female scores.

Males Females
620 660
570 590
540 540
580 560
590 610
580 590
480 610
620 650
570 600
610 620
590 630
570 640
610 590
590 640
570 580
550 560
530 570
560 560
620 600
520 600
560 590
620 590
580 590
610 630
530 560
480 600
590 560
620 560
590 560
580 560

Note: Use Excel to solve, including screenshots, and directions on how to solve on excel, construct the Null hypothesis too, Include each answer with its question number (1,2,3)

1.Construct the null and the alternative hypotheses to test if females outscore males on writing tests.  

2.Assuming the difference in scores is normally distributed, calculate the value of the test statistic. Do not assume that the population variances are equal.

3.Implement the test at alpha=0.01 and interpret your results.

In: Statistics and Probability

PoolVac, Inc. manufactures and sells a single product called the “Sting Ray,” which is a patent-protected...

PoolVac, Inc. manufactures and sells a single product called the “Sting Ray,” which is a patent-protected automatic cleaning device for swimming pools. PoolVac’s Sting Ray faces its closest competitor, Howard Industries, also selling a competing pool cleaner. Using the last 30 quarters of production and cost data, PoolVac wishes to estimate its average variable costs using the following quadratic specification:

AVC = a + bQ + cQ 2

The quarterly data on average variable cost (AVC), and the quantity of Sting Rays produced and sold each quarter (Q) are presented in the data file. PoolVac also wishes to use its sales data for the last 30 quarters to estimate demand for its Sting Ray. Demand for Sting Rays is specified to be a linear function as the following:

Qd = d + eP + fM + gPH in which its price (P), average income for households in the U.S. that have swimming pools (M), and the price of the competing pool cleaner sold by Howard Industries (PH).


1.       Run the appropriate regression to estimate the average variable coast function (avc) for sting rays. Evaluate the statistical significance of the three estimated parameters using a significance level of 5 percent. Be sure to comment on the algebraic signs of the three parameter estimates.

Sting Ray-PoolVac, Inc.
Quarter/Year Period (t) AVC Q P M PH
1st/2006 1 109 1647 275 58000 175
2nd/2006 2 118 1664 275 58000 175
3rd/2006 3 121 1295 300 58000 200
4th/2006 4 102 1331 300 56300 200
1st/2007 5 121 1413 300 56300 200
2nd/2007 6 102 1378 300 56300 200
3rd/2007 7 105 1371 300 57850 200
4th/2007 8 101 1312 300 57850 200
1st/2008 9 108 1301 325 57850 250
2nd/2008 10 113 854 350 57600 250
3rd/2008 11 114 963 350 57600 250
4th/2008 12 105 1238 325 57600 225
1st/2009 13 107 1076 325 58250 225
2nd/2009 14 104 1092 325 58250 225
3rd/2009 15 104 1222 325 58250 225
4th/2009 16 102 1308 325 58985 250
1st/2010 17 116 1259 325 58985 250
2nd/2010 18 126 711 375 58985 250
3rd/2010 19 116 1118 350 59600 250
4th/2010 20 139 91 475 59600 375
1st/2011 21 152 137 475 59600 375
2nd/2011 22 116 857 375 60800 250
3rd/2011 23 127 1003 350 60800 250
4th/2011 24 123 1328 320 60800 220
1st/2012 25 104 1376 320 62350 220
2nd/2012 26 114 1219 320 62350 220
3rd/2012 27 133 1321 312 62845 233
4th/2012 28 131 1354 312 62950 233
1st/2013 29 127 1307 312 62950 233
2nd/2013 30 121 1299 307 63025 221

In: Statistics and Probability