Swellingham is a fishing port near the Fishy Banks. There are N fishermen and potential fishermen in Swellingham, and N is very large On any given day, M is less than or equal to N fishermen. take their boats out to Fishy Bankes to fish. The catch per boat per day is 100/M tons of fish. The price of fish on the world market is $100 per ton. The cost to take a boat out on a particular day: fish or do not fish. The payoff to "do not fish" is always 0. Let M be the state variable for this problem.

A. Determine how the profit (per day) of a representative fisherman varies as M changes. This is the payoff to the strategy "fish"

B. On a coordinate graph, draw the curve or line representing the payoff to an agent who fishes as a function of the state variable M. On the same graph, draw the curve or line representing the payoff to a nonfisher.

C. Determine whether the two curves intersect, and if so where; and draw conclusions with respect to the value to the state variable.

As Brunello Cucinelli attempts to ‘go digital’ in the near future, how can it manage the change process successfully? What are the major forces for change, and the forces against change for Brunello Cucinelli? Use Lewin’s force field theory of change to suggest a change process (towards going digital) for the organization.

Case Study: Humanistic Capitalism at Brunello Cucinelli

Near the end of 2017, the management of DJS Sports Co., a merchandising company, prepared the following estimated balance sheet for December 31, 2017. DJS SPORTS CO. Estimated Balance Sheet December 31, 2017 Assets Liabilities and Equity Cash 36,000 Accounts Payable $ 360,000 Accounts Receivable 525,000 Bank Loan Payable 15,000 Inventory 150,000 Taxes Payable (due 3/15/17) 90,000 Total Current Assets $ 711,000 Total Liabilities $ 465,000 Equipment 540,000 Common Stock 472,500 Less: Accum Depreciation (67,500) Retained Earnings 246,000 Net Equipment 472,500 Total Stockholder's Equity 718,500 Total Assets $ 1,183,500 Total Liabilities and Equity 1,183,500 To prepare a master budget for January, February, and March of 2018, management gathers the following information.

a. DJS Sport's single product is purchased for $25 per unit and resold for $50 per unit. The expected inventory level of 6,000 units on December 31, 2017, is more than management's desired level for 2018, which is 20% of the next month's expected sales (in units). Expected sales are: January, 8,000 units; February, 9,000 units; March, 10,000 units; and April, 11,000 units.

b. Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 60% is collected in the first month after the month of sale and 40% in the second month after the month of sale. For the December 31, 2017, accounts receivable balance, $125,000 is collected in January and the remaining $400,000 is collected in February.

c. Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the December 31, 2017, accounts payable balance, $80,000 is paid in January and the remaining $280,000 is paid in February.

d. Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $60,000 per year.

e. General and administrative salaries are $144,000 per year. Maintenance expense equals $2,000 per month and is paid in cash.

f. Equipment reported in the December 31, 2017, balance sheet was purchased in January 2017. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter: January, $36,000; February, $96,000; and March, $28,800. This equipment will be depreciated under the straight-line method over eight years with no salvage value. A full month's depreciation is taken for the month in which equipment is purchased.

g. The company plans to acquire land at the end of March at a cost of $150,000, which will be paid with cash on the last day of the month.

h. DJS Sports has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $25,000 in each month.

i. The income tax rate for the company is 40%. Income taxes on the first quarter's income will not be paid until April 15.

Required: Prepare a master budget for each of the first three months of 2018; include the following component budgets (show supporting calculations as needed, and round amounts to the nearest dollar): 1. Monthly sales budgets (showing both budgeted unit sales and dollar sales). 2. Monthly merchandise purchases budgets. 3. Monthly selling expense budgets. 4. Monthly general and administrative expense budgets. 5. Monthly capital expenditures budgets. 6. Monthly cash budgets. 7. Budgeted income statement for the entire first quarter (not for each month). 8. Budgeted balance sheet as of March 31, 2018.

Vapor Pressures of a solid and liquid ammonia near the triple point are given by: log P solid/ torr=10.00-1630 K/T log P liquid / torr=8.46-1330 K/T Calculate the ratio of the slopes of the sublimation and vapor pressure curves at the triple point.

On the morning of March 5, 1996, a train with 14 tankers of propane derailed near the center of the small Wisconsin town of Weyauwega. Six of the tankers were ruptured and burning when the 1700 residents were ordered to evacuate the town. Researchers study disasters like this so that effective relief efforts can be designed for future disasters. About half of the households with pets did not evacuate all of their pets. A study conducted after the derailment focused on problems associated with retrieval of the pets after the evacuation and characteristics of the pet owners. One of the scales measured "commitment to adult animals," and the people who evacuated all or some of their pets were compared with those who did not evacuate any of their pets. Higher scores indicate that the pet owner is more likely to take actions that benefit the pet. Here are the data summaries.

Analyze the data and prepare a short report describing the results. (Use α = 0.01. Round your value for t to three decimal places and your P-value to four decimal places.)

State your conclusion.

Reject the null hypothesis. There is not significant evidence of a higher mean score for people who evacuated all or some pets.

Fail to reject the null hypothesis. There is significant evidence of a higher mean score for people who evacuated all or some pets.     

Fail to reject the null hypothesis. There is not significant evidence of a higher mean score for people who evacuated all or some pets.

Reject the null hypothesis. There is significant evidence of a higher mean score for people who evacuated all or some pets.

Near the end of 2017, the management of Dimsdale Sports Co., a merchandising company, prepared the following estimated balance sheet for December 31, 2017.

To prepare a master budget for January, February, and March of 2018, management gathers the following information.

The company’s single product is purchased for $30 per unit and resold for $56 per unit. The expected inventory level of 4,750 units on December 31, 2017, is more than management’s desired level, which is 20% of the next month’s expected sales (in units). Expected sales are: January, 7,250 units; February, 9,500 units; March, 11,250 units; and April, 11,000 units.

Cash sales and credit sales represent 20% and 80%, respectively, of total sales. Of the credit sales, 59% is collected in the first month after the month of sale and 41% in the second month after the month of sale. For the December 31, 2017, accounts receivable balance, $130,000 is collected in January and the remaining $390,000 is collected in February.

Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the December 31, 2017, accounts payable balance, $70,000 is paid in January and the remaining $285,000 is paid in February.

Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $84,000 per year.

General and administrative salaries are $144,000 per year. Maintenance expense equals $2,000 per month and is paid in cash.

Equipment reported in the December 31, 2017, balance sheet was purchased in January 2017. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter: January, $36,000; February, $91,200; and March, $21,600. This equipment will be depreciated under the straight-line method over eight years with no salvage value. A full month’s depreciation is taken for the month in which equipment is purchased.

The company plans to buy land at the end of March at a cost of $170,000, which will be paid with cash on the last day of the month.

The company has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $24,000 at the end of each month.

The income tax rate for the company is 41%. Income taxes on the first quarter’s income will not be paid until April 15.

Required:
Prepare a master budget for each of the first three months of 2018; include the following component budgets:

1. Monthly sales budgets.
2. Monthly merchandise purchases budgets.
3. Monthly selling expense budgets.
4. Monthly general and administrative expense budgets.
5. Monthly capital expenditures budgets.
6. Monthly cash budgets.
7. Budgeted income statement for the entire first quarter (not for each month).
8. Budgeted balance sheet as of March 31, 2018.

Near the end of 2017, the management of Dimsdale Sports Co., a merchandising company, prepared the following estimated balance sheet for December 31, 2017.

To prepare a master budget for January, February, and March of 2018, management gathers the following information.

The company’s single product is purchased for $30 per unit and resold for $55 per unit. The expected inventory level of 5,000 units on December 31, 2017, is more than management’s desired level, which is 20% of the next month’s expected sales (in units). Expected sales are: January, 7,000 units; February, 9,000 units; March, 11,000 units; and April, 10,000 units.

Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 60% is collected in the first month after the month of sale and 40% in the second month after the month of sale. For the December 31, 2017, accounts receivable balance, $125,000 is collected in January and the remaining $400,000 is collected in February.

Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the December 31, 2017, accounts payable balance, $80,000 is paid in January and the remaining $280,000 is paid in February.

Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $60,000 per year.

General and administrative salaries are $144,000 per year. Maintenance expense equals $2,000 per month and is paid in cash.

Equipment reported in the December 31, 2017, balance sheet was purchased in January 2017. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter: January, $36,000; February, $96,000; and March, $28,800. This equipment will be depreciated under the straight-line method over eight years with no salvage value. A full month’s depreciation is taken for the month in which equipment is purchased.

The company plans to buy land at the end of March at a cost of $150,000, which will be paid with cash on the last day of the month.

The company has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $25,000 at the end of each month.

The income tax rate for the company is 40%. Income taxes on the first quarter’s income will not be paid until April 15.

Required:
Prepare a master budget for each of the first three months of 2018; include the following component budgets:

1. Monthly sales budgets.
2. Monthly merchandise purchases budgets.
3. Monthly selling expense budgets.
4. Monthly general and administrative expense budgets.
5. Monthly capital expenditures budgets.
6. Monthly cash budgets.
7. Budgeted income statement for the entire first quarter (not for each month).
8. Budgeted balance sheet as of March 31, 2018.

Near the end of 2017, the management of Dimsdale Sports Co., a merchandising company, prepared the following estimated balance sheet for December 31, 2017.

The company’s single product is purchased for $30 per unit and resold for $55 per unit. The expected inventory level of 5,000 units on December 31, 2017, is more than management’s desired level, which is 20% of the next month’s expected sales (in units). Expected sales are: January, 7,000 units; February, 9,000 units; March, 11,000 units; and April, 10,000 units.

Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 60% is collected in the first month after the month of sale and 40% in the second month after the month of sale. For the December 31, 2017, accounts receivable balance, $125,000 is collected in January and the remaining $400,000 is collected in February.

Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the December 31, 2017, accounts payable balance, $80,000 is paid in January and the remaining $280,000 is paid in February.

Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $60,000 per year.

General and administrative salaries are $144,000 per year. Maintenance expense equals $2,000 per month and is paid in cash.

Equipment reported in the December 31, 2017, balance sheet was purchased in January 2017. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter: January, $36,000; February, $96,000; and March, $28,800. This equipment will be depreciated under the straight-line method over eight years with no salvage value. A full month’s depreciation is taken for the month in which equipment is purchased.

The company plans to buy land at the end of March at a cost of $150,000, which will be paid with cash on the last day of the month.

The company has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $25,000 at the end of each month.

The income tax rate for the company is 40%. Income taxes on the first quarter’s income will not be paid until April 15.

Required:
Prepare a master budget for each of the first three months of 2018; include the following component budgets:

1. Monthly sales budgets.
2. Monthly merchandise purchases budgets.
3. Monthly selling expense budgets.
4. Monthly general and administrative expense budgets.
5. Monthly capital expenditures budgets.
6. Monthly cash budgets.
7. Budgeted income statement for the entire first quarter (not for each month).
8. Budgeted balance sheet as of March 31, 2018.

The CFL: Coming Soon to a Light Socket Near You

In a nation with 4 billion light sockets, one light bulb per household can make a real difference. If every U.S. household

replaced one ordinary incandescent light bulb with a compact fluorescent lamp (CFL), the energy saved would be enough

to light 3 million homes. This single change would be the environmental equivalent of taking 800,000 cars off the road

and preventing 450 pounds of greenhouse gases from reaching the atmosphere. Change a light bulb, help the planet, slash

energy costs

—sounds like a win

-win situation.

Yet since the CFL’s invention more than 30 years ago, it has been slow to catch on. Meanwhile, the incandescent light

bulb, which was commercialized more than a century ago, still accounts for more than 90 percent of all light bulbs sold in

the U.S. Why have CFLs not been more popular?

•

Higher price.

One big reason that CFLs have not been big sellers is because each costs five to seven times more than

an incandescent light bulb does. A

CFL can last up to twelve times as long as an incandescent bulb does, and

installing even a few will make a noticeable difference in a household’s monthly electric bill. However, the initial

outlay has discouraged many people from making the switch.

•

Not t

he same old light bulb.

A second reason is that CFLs do not work as well as incandescent bulbs do in certain

circumstances, such as in fixtures outfitted with dimmers or in spotlights. Because the two types of bulbs are not

completely interchangeable, cons

umers have to do at least a little research and possibly some experimentation to

determine when they can and cannot install a CFL in place of an incandescent bulb. Instead, most consumers stay

with what they know and keep buying the same type of bulbs they

have always used.

•

Still too new.

Until very recently, few CFLs could be found on store shelves; those that were available had to compete

with rows and rows of incandescent light bulbs. And CFLs were rarely featured in advertising. Despite some

publicity, not everyone was getting the message about the CFL’s energy efficiency and the long

-term cost benefits of

switching from incandescents.

•

Disposal concerns.

Because CFLs contain a minute amount of mercury, they must be handled like hazardous waste

instead of

being thrown away like ordinary light bulbs. Sylvania provides customers with special packaging to return

burnt

-out CFLs for recycling by dropping them off at FedEx Kinko’s or at local post offices. However, even when

consumers know about the benefits of CFLs, they may not know how to dispose of them safely.

Now the CFL is coming into its own amid a growing chorus of campaigns by retailers, manufacturers, utilities, and

government agencies. Wal

-Mart is putting a major marketing push behind CFLs, featuring them in ads and on the Web to

encourage its 100 million customers to buy at least one new bulb. The retailer has even added CFLs to its back-

to-school

shopping list for eco-

friendly products that it has posted on Facebook to reach “green teens.” Utilities such as Pacific Gas

& Electric in California have given away free CFLs or have offered CFLs at reduced prices to encourage customers to at

least try the bulbs.

Major bulb manufacturers like General Electric, Philips, and Sylvania are helping to educate con

sumers about CFLs

through on-

package information and in marketing communications such as ads and media interviews. With new

government standards calling for the phase

-out of regular incandescent light bulbs over the next 10 years, manufacturers

are also testing energy

-efficient lighting alternatives such as low

-heat incandescent bulbs, new halogen bulbs, and light

-

emitting diode (LED) bulbs. Soon light sockets all over America will be lit with CFLs and other new bulbs.

i

Case Questions

1. Would you characterize the CFL as discontinuous, dynamically continuous, or continuous? How does this level of innovation help to explain why CFLs have diffused relatively slowly through the market?

Near the end of 2017, the management of Dimsdale Sports Co., a merchandising company, prepared the following estimated balance sheet for December 31, 2017.

To prepare a master budget for January, February, and March of 2018, management gathers the following information.

The company’s single product is purchased for $30 per unit and resold for $55 per unit. The expected inventory level of 5,000 units on December 31, 2017, is more than management’s desired level, which is 20% of the next month’s expected sales (in units). Expected sales are: January, 7,000 units; February, 9,000 units; March, 11,000 units; and April, 10,000 units.

Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 60% is collected in the first month after the month of sale and 40% in the second month after the month of sale. For the December 31, 2017, accounts receivable balance, $125,000 is collected in January and the remaining $400,000 is collected in February.

Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the December 31, 2017, accounts payable balance, $80,000 is paid in January and the remaining $280,000 is paid in February.

Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $60,000 per year.

General and administrative salaries are $144,000 per year. Maintenance expense equals $2,000 per month and is paid in cash.

Equipment reported in the December 31, 2017, balance sheet was purchased in January 2017. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter: January, $36,000; February, $96,000; and March, $28,800. This equipment will be depreciated under the straight-line method over eight years with no salvage value. A full month’s depreciation is taken for the month in which equipment is purchased.

The company plans to buy land at the end of March at a cost of $150,000, which will be paid with cash on the last day of the month.

The company has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $25,000 at the end of each month.

The income tax rate for the company is 40%. Income taxes on the first quarter’s income will not be paid until April 15.

Required:
Prepare a master budget for each of the first three months of 2018; include the following component budgets:

6. Monthly cash budgets.
7. Budgeted income statement for the entire first quarter (not for each month).
8. Budgeted balance sheet as of March 31, 2018.