In May 2005, FACEBOOK was in use at over 800 colleges and universities and received $12.7 million in investment from venture capital firm Accel Partners. 4 High school and international school networks were added in the fall of 2005. By year’s end, Facebook had achieved $9 million in revenue and accumulated six million monthly active users (MAUs). 5 The following year was another strong one for the company. In addition to launching Facebook Mobile, it hit 12 million MAUs and earned $48 million in revenue. In April of 2006, Greylock Partners, Meritech Capital Partners, and PayPal co-founder Peter Thiel invested $27.5 million in Facebook. By September, anyone with a verifiable e-mail address could sign up, which paved the way for exponential user growth. More features were added over the next several years to further enhance the site’s user functionality, including a developer platform, chat capabilities, the Like button, and an e-commerce payment feature, among other things. The global footprint Facebook had achieved by 2012 was astronomical. Facebook tracks the number of monthly active users (MAUs) and daily active users (DAUs) as a means to assess users’ engagement. Users who have logged into Facebook within a 30-day period are counted as monthly active users. In the same way, daily active users measure the number of users who have logged in within a 24-hour period. In addition to 1.06 billion monthly active users (MAUs), Facebook had 618 million daily active users (DAUs), a 30 percent increase over December 2011. Exhibit 1 shows the MAUs, DAUs, and mobile MAUs from 2009 to 2012. Approximately 80 percent of the site’s users live outside the U.S. and Canada, and the website is available in more than 70 languages. 6 Globally, there were, on average, 2.7 billion likes and comments per day and over 100 billion friend connections by the end of 2011. In 2012, Facebook brought in $5.09 billion in sales, a 37 percent increase over 2011 ( Exhibit 3 ). The company generated 84 percent of its revenue through advertising services and collected the rest through social gaming fees charged to platform developers. Facebook’s ad revenues are predicted to rise to $7.64 billion in 2014 (see Exhibit 4 ), but there is still plenty of room for Facebook to grow. 9 Google and Yahoo make nearly $88 per user of their search engines, whereas Facebook makes only $15 per user account. Mark Zuckerberg’s Graph Search announcement on January 15, 2013, launched the third pillar of Facebook’s social ecosystem. The three pillars consist of News Feed, Timeline, and Graph Search.  NEWS FEED Released in September 2006, News Feed quickly became a core feature of Facebook. It is at the heart of a user’s homepage and provides regular updates of friends’ posts, photos, events, group memberships, and so on. TIMELINE An updated version of the profile page, called Timeline, was launched in September 2011. It allows each user to paint a complete life story on his or her profile. Users can select what information to share and with whom to share it.  GRAPH SEARCH Zuckerberg calls the network of connections between people the social graph. Facebook, as a product, is an attempt to map the global social graph in the form of a massive database. Graph Search is a search bar that hovers at the top of every Facebook page.

CREATING VALUE FOR DEVELOPERS Approximately 15 percent of Facebook’s revenue is generated through its developer platform, which was first launched in May 2007 with 85 developers and 65 apps. 49 The platform is a set of development tools and application programming interfaces (APIs) that enables software and web developers to create innovative experiences for the Facebook community. Facebook’s f8 conferences, held near-annually, bring together developers, entrepreneurs, and innovators to collaborate on new websites, apps, and devices that take advantage of the Facebook platform. 50 Zynga, creator of the game FarmVille and many other wildly popular games, is currently the largest developer; the fees collected from Zynga accounted for 12 percent of Facebook’s revenue in 2011, but declined in 2012 51 as the popularity of Zynga’s games declined. 52 Other examples of developer integration using the platform include the ability for users to listen to music on Spotify, read news and sports Through products such as Open Graph, Social Plugins, and Payments, Facebook offers significant value to developers.

Facebook’s Initial Public Offering (IPO) Facebook’s IPO on May 18, 2012, was one of the largest in U.S. history, dwarfing even that of Google in 2004. 85 With an IPO price set at $38 per share, Facebook was valued at $104 billion and planned to raise approximately $18.4 billion through its IPO. 86 Facebook valuations historically have been optimistic. Before its IPO, Facebook was valued by several companies—Yahoo offered $1 billion for the company, Microsoft invested in October 2005 at a valuation of $15 billion, Accel Partners sold its stake at a $35 billion valuation in November 2010, and Goldman Sachs led funding at a $50 billion valuation in January 2011. These valuations and the hype around Facebook’s IPO made it one of the most anticipated public offerings to date (see Exhibit 13 ). In 2011, Facebook had earned $3.71 billion in revenue and $1 billion in net income. These recent earnings, combined with Facebook’s lofty valuation, equated to a high P/E of 104 for Facebook. In comparison, other large-cap NASDAQbased companies have much lower P/Es: Apple has a ratio of 18.2, Google sits at 21.33, and Microsoft is at 11.33. To match these expectations, Facebook knew it would have to grow its earnings quickly in 2013 and beyond.

UNDER SCRUTINY Discussions over the declining stock prices put Morgan Stanley, the NASDAQ exchange, and Facebook executives under great public scrutiny. Morgan Stanley and Facebook’s CFO have been criticized for making changes to the price and number of shares just before the offering. These shares and prices were set at the far upper end of the limit for the company. 93 As a result, the NASDAQ faces a review of its systems and procedures by the SEC. 94 Perhaps the sharpest criticism may have been offered against Mark Zuckerberg, whom many have perceived as an untested CEO.

DEFENSIVE MEASURES After a disappointing start, concerns about Facebook’s stock price deepened in the fall of 2012, as investors prepared for the release of a large portion of public shares scheduled to hit the market in late November (see Exhibit 15 ). Zuckerberg and other company executives had indicated on September 5, 2012, that they would not sell more shares than were necessary to cover their tax liabilities. This measure was taken as a statement of faith in the company’s future. Facebook also sought to protect its stock prices by buying back 101 million shares before the lockup periods expired and more shares become available for sale.

A New Business Model? Facebook’s IPO has put tremendous pressure on Sandberg and the Facebook team to come up with a strategy to justify Facebook’s $100 billion valuation in the stock market. Sandberg needs to come up with a business model that will generate sufficient income to justify this valuation. She sees competitors like LinkedIn using a combination of freemium and subscription business models. Google’s revenue stream, in contrast, relies on advertising more than anything else; it generates $88 in advertising revenue per user. 102 For Facebook to follow such a path, it would need to increase its advertising revenue per user, which currently sits at $15, substantially. Facebook is also pushing to expand to other countries. These markets have vast numbers of potential users, but revenues per user are lower than in the U.S. Can the market size make up for the lower per-user revenues? What effect might local competitors have in foreign markets? And what about Instagram? Is there a way to monetize that acquisition to a larger degree? Are there other acquisitions that Facebook should make? Sandberg remembers how quickly MySpace lost its first-mover advantage after focusing too much on monetization. She wants to ensure that Facebook does not encounter a similar fate. The clock is ticking. What business model and monetization strategy should she propose?

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What is the case about?

What are the important events that occurred in the case?

What can we learn from reading the case?

What advice do you have for the leaders in the case and/or company in the case?

1. The owner of a restaurant that serves continental food wants to study characteristics of his customers. He decides to focus on two variables: the amount of money spent by customers and whether customers order dessert. The results from a sample of 60 customers are as follows:

• Amount spent ( =$38.54, S= $7.26)

• 18 customers purchased dessert.

1. Construct a 95% confidence interval estimate of the population mean amount spent per customer in the restaurant.      _____________
2. Construct a 90% confidence interval estimate of the population proportion of customers who purchase dessert.             ____________

2.             A computer information systems professor is interested in studying the amount of time it takes students enrolled in the Introduction to Computers course to write and run a program in Visual Basic. The professor hires you to analyze the following results (in minutes) from a random sample of nine students: 10, 13, 9, 15, 12, 13, 11, 13, 12. At the 5% level of significance, is there any evidence that the population mean is greater than 10 minutes. Do the test of hypothesis in detail?

H₀ ________H₁ ________      Graph _________________________, Critical Value(s) ___________Computed Value(s) __________

Decision _____________________________

3) Long-distance telephone calls are normally distributed with mean equal to 10 minutes and standard deviation equal to 2 minutes. If random samples of 25 calls were selected

a)             What proportion of the sample means would be between 9.80 and 10.2 minutes                 __________

b)             What proportion of the sample means would be below 9.5 and above 10 minutes               __________                                            _

c)             What should the size of n be if sampling error is within + 6 and α=.10                                ___________

4)          (mean)                                                                                                                     $ 46                                       $29                                      

         S     (Standard Deviation)                                                                                               $ 9                                           $ 8

         X_i (number of students who are making >$30,000 annually)                                     10                                            9

         n     (Sample Size)                                                                                                         37                                           26

a) Is there any evidence of a difference in the average between the two groups?

H₀ ________H₁ ________      Graph _________________________, Critical Value(s) ___________Computed Value(s) __________

Decision

b) Is there any evidence of a difference in the proportion between the two groups?

H₀ ________H₁ ________      Graph _________________________, Critical Value(s) ___________Computed Value(s) __________

Decision

c) Set up a 90% C.I.E. for the difference of two averages of two departments

Formula__________________________________,       Critical Values_________________          C.I.E. _________   _________

d) Set up a 90% C.I.E. for the difference of two population proportions

Formula__________________________________,       Critical Values_________________          C.I.E. _________   _________

5) The breaking strength of plastic bags used for packaging produce is normally distributed, with a mean of 5 pounds per square inch and a standard deviation of 1.5 pounds per square inch. What proportion of the bags have a breaking strength of

a. less than 3.17 pounds per square inch?                                                                                                                              __________

b. at least 3.6 pounds per square inch?                                                                                                                                   __________

c. between 5 and 5.5 pounds per square inch?                                                                                                                        __________

d. 95% of the breaking strengths will be contained between what two values symmetrically distributed around the mean? _____ _____           

6) Based on past data, the sample mean of the credit card purchases at a large department store is $35. Assuming sample size is 25 and the population standard deviation is 10.

a)             What % of samples are likely to have between 20 and 30?                                                                                   _________

b)             Between what two values 90% of sample means fall?                                                                                           _________

c)             Below what value 99% of sample means fall?                                                                                                       _________

d)             Above what value only 1% of sample means fall??                                                                                               _________

e)             Within what symmetrical limits of the population percentage will 95% of the sample percentages fall?            ________ _______

1.   A researcher conducted a survey on a university campus for a sample of 64 seniors. The research reported that seniors read an average of 3.12 books in the prior academic semester, with a standard deviation of 2.15 books. Determine the probability that the sample mean is:
   a) above 3.45
   b) between 3.38 and 3.58
   c) below 2.94
2.   Al Gore, the Democratic candidate for President of the USA in the 2000 election, believes that the proportion of voters who will vote for a Democrat candidate in the year 2004 presidential elections is 0.65. A sample of 500 voters is selected at random.
a.   Assume that Gore is correct and p = 0.65. What is the sampling distribution of the sample proportion ? Explain.
b.   Find the expected value and the standard deviation of the sample proportion .
c.   What is the probability that the number of voters in the sample who will vote for a Democrat presidential candidate in 2004 will be between 340 and 350?
3.   A random sample of 10 waitresses in Iowa City, Iowa revealed the following hourly earnings (including tips):

$19   18   15   16   18   17   16   18   20   14

If the hourly earnings are normally distributed with a standard deviation of $4.5, estimate with 95% confidence the mean hourly earnings for all waitresses in Iowa City.
4.   The number of cars sold annually by used car salespeople is normally distributed with a standard deviation of 15. A random sample of 400 salespersons was taken and the mean number of cars sold annually was found to be 75. Find the 95% confidence interval estimate of the population mean. Interpret the interval estimate.
5.   Suppose that in a large city, the annual income of real estate agents is normally distributed with a standard deviation of $7,500. A random sample of 16 real estate agents reveals that the mean annual income is $52,000. Determine the 99% confidence interval estimate of mean annual income of all real estate agents in the city.
6.   A medical statistician wants to estimate the average weight loss of people who are on a new diet plan. In a preliminary study, he guesses that the standard deviation of the population of weight losses is about 10 pounds. How large a sample should he take to estimate the mean weight loss to within 2 pounds, with 90% confidence?

During 2014 to 2025, U.S. population is projected to grow by close to 8.6%, from about 319 million to 346 million. The population under age 18 is projected to grow by only 5%, while the population aged 65 and over is projected to grow by 41%. (The Complexities of Physician Supply and Demand: Projections from 2014 to 2025, Association of American Medical Colleges, Submitted by: IHS Inc. April 5, 2016) In 2011, the baby boom generation, or those people born between 1946 and 1964, which comprises approximately 75 million individuals, will begin to turn 65. By 2030, it is projected that approximately 70 million people, or 20% of the population, will be older than 65 (U.S. Census Bureau, 1996). Older adults, defined as people aged 65 years and older, possess greater cancer incidence and mortality rates compared to younger people. Approximately 60% of all cancers occur in the older adult population, resulting in an incidence rate that is 10 to 11 times higher than in the younger population (Ershler, 2003; Yancik & Ries, 2004). The risk of developing cancer is 8%–9% in people age 40–59, with a dramatic increase in risk of 20%–30% in people older than 60 years of age (Malik, 2004). According to Edwards et al. (2002), if current cancer incidence rates were applied to the population projections for the next five decades, the number of patients with cancer would double from 1.3 million to 2.6 million between 2000 and 2050 because of population growth and aging. These projections have a direct impact on future health care in research, practice, and educational settings (Cancer and the Aging Population, Diane G. Cope, PhD, ARNP, BC, AOCNP) Other facts: Total Oklahoma population: 3,751,351 (Population Demographics for Oklahoma 2017 and 2016 content provided by the US Census bureau for the years 2010, 2011, 2012, 2013, 2014 and 2015, 2016).Number of new cases of cancer (cancer incidence) is 454.8 per 100,000 men and women per year (based on 2008-2012 cases). Question: It appears that the above scenarios present a business opportunity to build a not-for-profit cancer hospital or clinic in Oklahoma. Is it a creative idea - Why or why not?

Transaction takes place when one party exchanges or promise to exchange good or service with another party for money. Identify the difference between revenue expenditure and capital expenditure and provide the examples

Problem 39:

You have just turned 30 years old, have just received your MBA, and have accepted your first job. Now you must decide how much money to put into your RRSP. Your RRSP works as follows: Every dollar in the plan earns 7% per year. You cannot make withdrawals until your 65th birthday. After that point, you can make withdrawals as you see fit. You decide that you will plan to live to 100 and work until you turn 65. You estimate that to live comfortably in retirement, you will need $100,000 per year starting at the end of the first year of retirement (i.e., when you turn 66) and ending on your 100th birthday. You will contribute the same amount to the plan at the end of every year that you work. How much do you need to contribute each year to fund your retirement?

**please list out step by step actions, please show the formulas used, please DONT USE excel**

Problem 40:

* Problem 39 is not very realistic because most people do not contribute a fixed amount to their RRSP each year. Instead, you would prefer to contribute a fixed percentage of your salary each year. Assume that your starting salary is $75,000 per year and it will grow 2% per year until you retire. Assuming everything else stays the same as in Problem 39, what percentage of your income do you need to contribute to the plan every year to fund the same retirement income?

**please list out step by step actions, please show the formulas used, please DONT USE excel**

Problem 6-2A Calculate ending inventory, cost of goods sold, sales revenue, and gross profit for four inventory methods (LO6-3, 6-4,6-5) [The following information applies to the questions displayed below.] Greg’s Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March. Greg's Bicycle Shop uses a periodic inventory system.

For the specific identification method, the March 5 sale consists of bikes from beginning inventory, the March 17 sale consists of bikes from the March 9 purchase, and the March 27 sale consists of four bikes from beginning inventory and eight bikes from the March 22 purchase.

1. Calculate ending inventory and cost of goods sold at March 31, using the specific identification method.

2. Using FIFO, calculate ending inventory and cost of goods sold at March 31.

3. Using LIFO, calculate ending inventory and cost of goods sold at March 31.

4. Using weighted-average cost, calculate ending inventory and cost of goods sold at March 31. (Round your intermediate and final answers to 2 decimal places.)

5. Calculate sales revenue and gross profit under each of the four methods. (Round weighted-average cost amounts to 2 decimal places.)

A manager at another store wants to know if an add campaign increased her average monthly revenue above $100 (thousand). She has provided you 36 months of data. She wants to know at the 95% condence level and at the 99% confidence level. She will be even more impressed if you can give the exact p-value and accurately describe what it means. Show how you solved this problem then explain what you did in words in the text box below. For example, is this a two-sided or one sided test? How did you proceed from there? You should label some of the cells with words then put the value next to those words. Heres the data: Month Revenue (thousands) 1 102.87 2 107.28 3 100.78 4 96.50 5 97.51 6 98.26 7 104.88 8 103.95 9 107.00 10 106.98 11 106.01 12 101.70 13 98.78 14 98.92 15 99.08 16 102.45 17 95.93 18 101.46 19 105.57 20 103.24 21 100.59 22 104.20 23 99.83 24 105.93 25 102.85 26 102.55 27 104.91 28 106.13 29 95.92 30 97.51 31 107.28 32 95.69 33 99.50 34 95.76 35 95.62 36 101.17

Refer to Notes to Consolidated Financial Statements.

Review Coca-Cola's financial statements and answer the following questions:

1. How are Coke's numbers reported (in what denomination)?

For items 2-4, enter the answers as presented (e.g. $24,088 not $24,088,000).

2. What is Coke's net operating revenue for 2008?
$

3. What is Coke's cost of goods sold for 2008?
$

4. What is Coke’s net income 2008?
$

5. What is Coke’s percent of interest expense to net operating revenue on its 2008 income statement? Rounding your answer to two decimal places.
%

6. What is Coke's percent of increase in net operating revenue from 2007 to 2008? Rounding your answer to one decimal place.
%