2 Franchise Value

a) Suppose that Mark Cuban wants to purchase the Mavericks in 2000 (call this year 0), and he expects to receive $400,000 in profits in years 1, 2, and 3 (each year). Now suppose that value of the Mavericks in year 3 is $500 million and that the interest rate is 4%. What is price that Mark would pay to make him break even in 3 years (i.e. that makes E[B] – p =0)?

b) Now, suppose that Mark Cuban plans to purchase the Mavericks in 2000 for $285 million and he expects to receive $400,000 in profits in years 1, 2, and 3 (each year). Now suppose that the interest rate is 4%. What would be the value of the Mavericks in 3 years that would make Mark break even?

c) Finally suppose Mark plans to purchase the Mavericks at $285 million in 2000. The value of the mavericks will be $500 million in 3 years and the interest rate is 4%. Suppose the expected profits for years 1, 2, and 3 is x (i.e. Mark expects to receive x in year 1, x in year 2, and x in year 3). What is value of x that would make Mark break even?

Assume that due to some human resources problems, Frostburg Wires has to reduce the capacity of one of its four working stations by 1500 hours. Which working station can Frostburg Wires choose in order to minimize the impact of this change on its profit? USE EXCEL SOLVER

HERE IS ORGINIAL SCENARIO:

Case #1 – Sun Microsystems – Questions (pp. 92-95)

Sun Microsystems (trends, ratios stock performance) (LO3) Sun Microsystems is a leading supplier of computer-related products, including servers, workstations, storage devices, and network switches.*

In the letter to stockholders as part of the 2001 annual report, President and CEO Scott G. McNealy offered the following remarks:

Fiscal 2001 was clearly a mixed bag for Sun, the industry, and the economy as a whole. Still, we finished with revenue growth of 16 percent—and that’s significant. We believe it’s a good indication that Sun continued to pull away from the pack and gain market share. For that, we owe a debt of gratitude to our employees worldwide, who aggressively brought costs down— even as they continued to bring exciting new products to market.

The statement would not appear to be telling you enough. For example, McNealy says the year was a mixed bag with revenue growth of 16 percent. But what about earnings? You can delve further by examining the income statement in Exhibit 4. Also, for additional analysis of other factors, consolidated balance sheet(s) are presented in Exhibit 5 on page 94.

1. Referring to Exhibit 4, compute the annual percentage change in net income per common share-diluted (second numerical line from the bottom) for 1998–1999, 1999–2000, and 2000–2001.
2. Also in Exhibit 4, compute net income/net revenue (sales) for each of the four years. Begin with 1998.
3. What is the major reason for the change in the answer for Question 2 between 2000 and 2001? To answer this question for each of the two years, take the ratio of the major income statement accounts to net revenues (sales).

Cost of sales

Research and development

Selling, general and administrative expense

Provision for income tax

4. Compute return on stockholders’ equity for 2000 and 2001 using data from Exhibits 1 and 2.

Comprehensive Problem 2 (Continued)

Exhibit 4

5. Analyze your results to Question 4 more completely by computing ratios 1, 2a, 2b, and 3b (all from this chapter) for 2000 and 2001. Actually, the answer to ratio 1 can be found as part of the answer to question 2, but it is helpful to look at it again.

What do you think was the main contributing factor to the change in return on stockholders’ equity between 2000 and 2001? Think in terms of the Du Pont system of analysis.

6. The average stock prices for each of the four years shown in Exhibit 4 were as follows:

1998                11¼

1999                16¾

2000                28½

2001                9½

1. Compute the price/earnings (P/E) ratio for each year. That is, take the stock price shown above and divide by net income per common stock-dilution from Exhibit 4.
2. Why do you think the P/E has changed from its 2000 level to its 2001 level?

A brief review of P/E ratios can be found under the topic of Price-Earnings Ratio Applied to Earnings per Share in Chapter 2.

SMITH FAMILY'S 2018 TAX SCENARIO Joseph L. Smith (age 45, Social Security number 145-26-9210) and Rita M. Smith (age 43, Social Security number 142-46-5108) are husband and wife. They live at 1650 Belmont Avenue, Chicago, IL 60615. David is a self-employed CPA and Rita is a third grade teacher. They have two children: Blake (age 5, Social Security number 310-51-2108) and Amelia (age 3, Social Security number 314-62-8924). In 2018, Joseph earned $182,000 and Rita earned $46,000. The Smith family has medical coverage through the school system for which Rita works. As an employee, Rita had $9,500 of federal tax withheld, $2,300 of IL state tax withheld, and the required Social Security and Medicare taxes. Joseph has an office with business expenses for 2018 as follows: Item Amount Office Rent $24,000 Office Supplies $8,000 Internet Charges $1,2000 Phone System Charges $4,800 Advertising Expenses $1,800 Postage Charges $1,500 Audit/Tax Software Charges $20,000 Business Gifts $400 The advertising expenses included local newspaper advertisements, digital marketing, and direct marketing flyers. The business gifts were $40 gift certificates given to his 10 largest clients in appreciation for their business. Joseph purchased a 2017 Honda Civic in 2017. In 2018, he drove 24,000 business miles and 6,000 personal miles, and uses the standard mileage method for tax purposes. In 2018, Joseph made estimated quarterly federal tax payments of $18,000/quarter and estimated quarterly IL state tax payments of $3,000. All the payments were made within calendar 2018. Joseph also contributed $8,000 to his SEP account. Rita bought various supplies for her classroom, but did not closely track expenditures and thus only wants to take the allowed educator expenses deduction. Her teacher's license was also renewed in 2018 for $125. Blake and Amelia are both in day care at the Riley Day Care Center at 1325 Lake Street, Chicago, IL 60612 (EIN 36-2875647). They are only in day care for 9 months of the year (weekly charge of $240.00/week), because Rita does not work during the summer. In addition to the wages and expenses as detailed, the Smiths have the following documented income and expenses: Item Amount Interest income from CDs $1,800 Interest Income from Series EE $4,000 Government Bonds Mortgage Interest on Principal Residence $15,000 Property taxes on Residence $8,000 PMI Insurance Payments $3,000 Cash Charitable Contributions $2,500 Non-Cash Contributions (Used Clothing to Salvation Army) $350 The Smiths itemized deductions in 2017. The federal tax refund was $3,500 and the IL state tax refund was $600. In addition, the Smiths own rental property (a "two flat" in Chicago) which they have rented out for the entire year. Total rental income was $30,000. Rental property related expenses were as follows: Item Amount Mortgage Interest on Rental Property $13,000 Property Tax $9,000 Repairs on Rental Units $2,6000 Depreciation on Rental Units (using SL Depreciation) $3,500 Utilities $3,000 Landscaping $500

The Excel file Store and Regional Sales Database provides sales data for computers and peripherals showing the store identification number, sales region, item number, item description, unit price, units sold, and month when the sales were made during the fourth quarter of last year.3 Modify the spreadsheet to calculate the total sales revenue for each of the eight stores as well as each of the three sales regions.

Given Codd's Rule 4:

Rule 4: Dynamic online catalog based on the relational model: The database description is represented at the logical level in the same way as ordinary data, so that authorized users can apply the same relational language to its interrogation as they apply to the regular data.

In three sentences, explain what this means. Give two example queries from MySQL that show how MySQL realizes the concepts

a.Imagine that the sponsor of Online Asset Management System project, which you are currently managing, suddenly decides to terminate the project early. What are two possible reasons for this decision?

b. Imagine you are creating a lessons learned database for the Online Asset Management System you have recently completed. What would you list as your top 3 issues? Your top 3 successes? (3 + 3 mark)

Need 600 words discussion

Key roles for a successful analytics project. Select a data analytics of your choice and discuss how the following roles add value to this initiative: Business User, Project Sponsor, Project Manager, Business Intelligence Analyst, Database Administrator, and Data Engineer. Again, please note that you will discuss specific activities that each of these roles may perform on a data analytics project that you select.

Database: Configure Oracle Net manager:

Create the directory E:\oracle\net to be used by Oracle Net configuration files and then set TNS_ADMIN variable to point to this. To set this variable you will need to open regedit.exe (the “Registry Editor”) first. Next, you will create and set the key TNS_ADMIN as a string variable in the registry in the Oracle Home branch. This will likely be: HKEY_LOCAL_MACHINE\SOFTWARE\ORACLE\KEY_OraDB12Home1

How to set TNS_ADMIN variable correctly.