In the early 2000’s, DHL expanded its worldwide air express package delivery service to the US market in direct competition with UPS and FedEx. After several years and more than one billion dollars in losses, DHL admitted defeat in 2008 withdrawing from most US markets while shedding some 15,000 US jobs.

Think back to DHL announcement of its intention to enter the US market. Various stakeholders would greet the prospect of increased competition differently.

In this discussion forum, address the following:

Choose two of the following stakeholder groups, preferably with opposing views, and explain from their perspective why you oppose or support the entry of DHL in the US domestic market:

• Federal, state and/or local governments
• FedEx and UPS management
• FedEx and UPS employees
• DHL management
• DHL employees
• Labor unions representing FedEx and UPS employees
• Small package shippers

QUESTION 1:

The University of Chicago's General Social Survey (GSS) is the nation’s most important social science sample survey. The GSS asked a random sample of adults their opinion about whether astrology is very scientific, sort of scientific, or not at all scientific. Here is a two-way table of counts for people in the sample who had three levels of higher education degrees:

Give three 95% confidence intervals, for the percents of people with each degree who think that astrology is not at all scientific.

QUESTION 2:

Sample surveys on sensitive issues can give different results depending on how the question is asked. A University of Wisconsin study divided 2400 respondents into 3 groups at random. All were asked if they had ever used cocaine. One group of 800 was interviewed by phone; 167 said they had used cocaine. Another 800 people were asked the question in a one-on-one personal interview; 195 said "Yes." The remaining 800 were allowed to make an anonymous written response; 223 said "Yes."

Are there statistically significant differences among these proportions?

Carry out a chi-square test for association between education level and opinion about astrology. Test H0:H0: the proportion of people who admit cocaine use is the same for all three interview methods versus Ha:Ha: the proportions are not the same (interview type makes a difference). Use α=0.01α=0.01.

χ2(±0.0001)=χ2(±0.0001)=

P(±0.0001)=P(±0.0001)=

Chapter 7:  

Central University of Illinois has a newly appointed president, Catherine Husker. This has been a challenging budget year due to the difficulties of getting a state budget passed in the State Legislature. It appears from all reports that the budget that may get passed will be only 90% of last year’s state appropriations for the University. This means the University will have to cut their own operating budget for next year because of the State’s expected reduction in appropriations to higher education.

Husker just had a meeting with the athletic director of the university, Gareth Connor, to discuss the budget for the athletic department. Central University has been a men’s football and basketball powerhouse for the last several decades. However, the women’s athletic program has had less success. Last year, though, the women’s basketball team was one of the team’s selected to participate in the NCAA Women’s Basketball Competition through an “at-large bid” due to their outstanding season.

Connor and Husker discussed the 2018 Athletic Department budget, which Connor believed was the final draft. The meeting did not go well. In fact, it went terribly.   Husker discussed four grave concerns she had about the Athletic Department budget and requested Connor to review and revise the budget in light of her concerns below. Draft II of the budget is due in two weeks time.

Concern 1: The Athletic Department is budgeting a loss of over $3 million. Given the tight fiscal position of the university, this outcome is unacceptable to Husker. A budgeted loss of $1 million is the most she will tolerate for 2018. By 2019 the Athletic Department has to operate with a balanced budget. She tells Connor this is nonnegotiable.

Concern 2: The low allocation of money to the women’s athletic program. Fox Valley News, a tabloid television show, recently ran a program titled “It’s a Man’s World at Central University Athletics’ Program.” Husker said Connor is treating woman athletes as “third-class citizens.”

Concern 3: The low academic performance of the men’s football athletes, many of whom have full scholarships. She notes that the local TV news recently ran an interview with three football-team students, only one of which “exemplified the high academic credentials she wants Central to showcase to the world.” As for the other two students, she calls one student “incoherent” and another “incapable of stringing sentences together.”

Concern 4: The outrageous salary paid to “Bull” Mason, the football coach. She notes it is twice that of the highest paid academic person on campus, a Nobel Prize winner. Moreover, Mason receives other payments from his “Football the Central Way” summer program for high school students.

Below is Draft I of the Athletic Department budget:

Central University 2017 Athletic Department Budget ($ millions)

Revenues:

         Men’s athletic programs                    $10.350

         Women’s athletic programs                   0.780

         Other (endowment income, gifts)           3.400      $14.530

Costs:

         Men’s athletic programs                    $11.040

         Women’s athletic programs                   2.800

         Other (non-assigned to programs)*         3.700      17.540

Operating Income                                                        $( 3.010)

*Other non-assigned programs include rugby, soccer and volleyball

Men’s Athletic Programs:

                           Football      Basketball       Swimming             Other       Total

Revenues              $8.600        $1.500            $0.100    $0.150   $10.350

Costs                    7.400            2.700              0.300      0.640     11.040

Full Scholarships         37                         21                 6                4       68

Women’s Athletic Programs:

                                             Basketball       Swimming             Other       Total

Revenues                                $0.600            $0.080    $0.100   $ 0.780

Costs                                        1.800              0.200      0.800       2.800

Full Scholarships                            11                 4                2       17

REQUIRED:

Connor will be holding a half-day meeting with key officials of the Athletic Department (of which your team are some of these key officials) to discuss the university president’s concerns. In order for your team of officials to be prepared to discuss the concerns of the president at this meeting, please answer the following questions prior to the meeting.

Questions:

Who are the stakeholders? (Worth 4 pts.)

The Athletic Department is operating at a loss. What are some of the ways the Department can increase revenues? Are there any potential pitfalls or problems with any of your ideas? (Worth 6 pts.)

Are there any ways that the Athletic Department can decrease costs? Are there any potential pitfalls or problems with any of these suggestions? (Worth 6 pts.)

What are some of the gender issues that Husker raised and how would you attempt to address them? (Worth 4 pts.)

Today there are some 14 million only children in American families, representing about 20% of all kids, according to the U.S. Census Bureau. A recent survey of 252 Texas State University students shows 13 do not have siblings in their families.

a. Use the survey data to build the 95% confidence interval for population proportion of Texas State students who do not have siblings.

b. Interpret the interval in terms of the problem. Can you safely conclude that percent of bobcat families with one child is significantly smaller than percent of such families in the general population? Explain.

You are the observer of a peculiar individual that enters a room with two stations: each
station has a coin. Suppose that the coin at station A has a 40% chance of landing on heads,
while the coin at station B has a 50% chance of landing on heads. The individual plays the
following, monotonous game: if the coin lands on tails, he will stay at the station; otherwise,
he will move to the other station.
(a) Recall that a state transition diagram is a graphical representation of nodes and
arrows with the probabilities of moving from one station to another to label those
arrows. Draw a state transition diagram for the above scenario.
(b) Find the probability of moving to station B in one coin flip, given that the individual
is at station A.
(c) You decide to keep track of the stations that the individual has visited through a string
of characters, i.e. 'AAB' is the event that the individual started at A, stayed A, and
then moved to B. What is the probability that the string will read 'ABBAB' in the
next 5 plays of the “game.” You may assume that the individual started at A with
probability 1

You founded your own firm three years ago. You initially contributed $200,000 of your own money and in return you received 3 million shares of stock. Since then, you have sold an additional 2 million shares of stock to angel investors. You are now considering raising capital from a venture capital firm. This venture capital firm would invest $5 million and would receive 4 million newly issued shares in return. Suppose you sold the 2 million shares to the angel investor for $500,000. What was the post-money valuation of your shares immediately following the angel investor's investment?

Consider the following data.   

What is the value returned by this SQL statement?

SELECT COUNT( CLUBID )
FROM STUDENT

Jonna Vella, Inc. is raising $250,000 in early stage money to fund development of their prototype. The company is still in a very early stage, and doesn't feel ready to put a valuation on themselves. So they are raising this round as a convertible debt round with the following parameters: the debt will convert to equity on the first priced round, at the valuation of the firm in that priced round, plus a 20% bonus. The debt will earn 5% per year until conversion. Suppose that the company raises $1 million in a priced round in one year, and that the round values the company at $10 million.

How much will the debt be worth (in dollars) at the time of conversion?

What % ownership of the company will that represent, at the time of conversion?

What % ownership of the company will the new investors want to own for their $1 million?

If the founders own 100,000 shares, how many shares will the new investors receive?

How many shares will the convertible debt holders receive at conversion?

Make a simple table to show the shares owned, and corresponding % ownership, by each of the three groups (founders, convertible debt investors, equity investors) after conversion.

Suppose that the convertible debt investors try to negotiate a larger "bonus" of 25% to their investment (so they would receive an extra 25% share of the company instead of 20%). Who would benefit from this, and who would lose?

Suppose that the convertible debt investors negotiate a valuation "cap" of $5 million. This means that their debt would convert as if the company were worth no more than $5 million, regardless of the valuation from the priced round. Who wins and loses with this valuation cap?

Explain each question