Snow skiing and snowboarding remain popular hobbies. More than 10 million people in the United States participate in the activities each year. Ski resorts can be found across the country. The marketplace for equipment continues to grow. Ski and Snowboard Specialists offers a wide variety of equipment combined with connections to numerous resorts nationwide. Enthusiasts can shop online for skis, poles, snowboards, masks, clothing, and other gear and, at the same time, receive access to information about which areas have the best current conditions combined with discount offers for lodging, lifts, and other accommodations. Considerable competition exists for both equipment and informational/booking services. Ski and Snowboard Specialists sells products from the major manufacturers of equipment as they compete with local sports equipment stores and the lodges themselves. Travel agencies and other groups offer booking services. In the midst of this clutter, the marketing team believes the key to future success will rely on continuing engagement with those who have taken advantage of the reasonable prices the company offers for equipment and the convenience provided by the booking side of the business. The company’s primary website can be combined with mobile marketing and other new marketing techniques to entice new visitors while building loyalty with returning customers. To help achieve these overall objectives, the marketing team has established relationships with two professional skiers who serve as instructors at popular resorts. One is located in Colorado and the other in Maine. These individuals and their resorts regularly provide advice about all aspects of the two sports. Ski and Snowboard Specialists’ marketers have recently hired a major national advertising agency to assist in all aspects of the firm’s promotional efforts. The goal is to cast a wide net to attract and keep as many new clients as possible.

question?Discuss how location-based advertising could be featured by Ski and Snowboard Specialists

Cincinnati Paint Company sells quality brands of paints through hardware stores throughout the United States. The company maintains a large sales force who call on existing customers and look for new business. The national sales manager is investigating the relationship between the number of sales calls made and the miles driven by the sales representative. Also, do the sales representatives who drive the most miles and make the most calls necessarily earn the most in sales commissions? To investigate, the vice president of sales selected a sample of 25 sales representatives and determined:

• The amount earned in commissions last month (y)
• The number of miles driven last month (x₁)
• The number of sales calls made last month (x₂)

Develop a regression equation including an interaction term. (Negative amount should be indicated by a minus sign. Round your answers to 3 decimal places.)

Complete the following table. (Negative amounts should be indicated by a minus sign. Round your answers to 3 decimal places.)

Compute the value of the test statistic corresponding to the interaction term. (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.)

Value of the test statistic

At the 0.05 significance level is there a significant interaction between the number of sales calls and the miles driven?

Under the United States Generally Accepted Accounting Standards (U.S. GAAP), property, plant and Equipment are reported at historical cost net of accumulated depreciation. These assets are written down to fair value when it is determined that they have been impaired.

Several other countries, including Australia, Brazil,England, Mexico and Singapore, permit the revaluation of property, plant and equipment to their current cost as of the balance sheet date. The primary argument in favor of revaluation is that the historical cost of assets purchased ten, twenty, or more years ago is not meaningful. A primary argument against revaluation is the lack of objectivity in arriving at current cost estimates,particularly for old assets that either will or cannot be replaced with similar assets or for which there are no comparable or similar assets currently available for purchase.

Required:1) List and discuss the 5 qualitative concept of comparability. In your opinion, would the financial statements of companies operating in one of the foreign countries listed above be comparable to a U. S. company’s financial statements? Explain.

Wheels, Inc. manufactures bicycles sold through retail bicycle shops in the southeastern United States. The company has two salespeople that do more than just sell the products- they manage relationships with the bicycle shops to enable them to better meet consumers' needs. The company's sales reps visit the shops several times per year, often for hours at a time. The owner of Wheels is considering expanding to the rest of the country and would like to have distribution through 2,250 bicycle shops. To do so, however, the company would have to hire more salespeople. Each salesperson earns 35,000 plus 5 percent commission on all sales annually. Another alternative is to use the services of sales agents instead of its own sales force. Sales agents would be paid 8 percent of sales. Each sales call lasts approximately 3 hours and each sales rep has approximately 750 hours per year to devote to customers. Wheels needs 18 salespeople if it has 2,250 bicycle shop accounts that need to be called on two times per year. At what level of sales would it be more cost efficient for Wheels to use to sales agents compared to its own sales force? To determine this, consider the fixed and variable costs for each alternative. What are the pros and cons of using a company's own sales force versus independent sales agents?

Wheels, Inc. manufactures bicycles sold through retail bicycle shops in the southeastern United States. The company has two salespeople that do more than just sell the products- they manage relationships with the bicycle shops to enable them to better meet consumers' needs. The company's sales reps visit the shops several times per year, often for hours at a time. The owner of Wheels is considering expanding to the rest of the country and would like to have distribution through 2,250 bicycle shops. To do so, however, the company would have to hire more salespeople. Each salesperson earns 35,000 plus 5 percent commission on all sales annually. Another alternative is to use the services of sales agents instead of its own sales force. Sales agents would be paid 8 percent of sales. Each sales call lasts approximately 3 hours and each sales rep has approximately 750 hours per year to devote to customers. Wheels needs 18 salespeople if it has 2,250 bicycle shop accounts that need to be called on two times per year. At what level of sales would it be more cost efficient for Wheels to use to sales agents compared to its own sales force? To determine this, consider the fixed and variable costs for each alternative. What are the pros and cons of using a company's own sales force versus independent sales agents?

Consider two companies: United States steel (X) and Facebook (FB). Look at the profiles (financial statements for 2016) of each on yahoo finance and discuss the followings (you need to calculate these values yourself and show details of your calculations): How many outstanding shares the company has? What is the market value of the company? What is the book value of the company? What is the beta for the company? How do you find the risk free rate? (consider the market risk premium to be 8%) Using CAPM calculate the expected return on the equity for the company. (To get the required rate of return on debt, divide the interest expense by total debt) (To get the total debt, add the short term debt to long term debt) What is the Weighted average cost of capital (WACC) for the company? What is the leverage (total debt/equity ratio) for the company?

Suppose the United States and Hong Kong have a flexible exchange rate system. Explain whether each of the following events will lead to an appreciation or depreciation of the U.S. dollar and HK dollar. Please explain in words and graphically.

(a) U.S. real interest rates decrease below Hong Kong real interest rates.

(b) The Hong Kong inflation rate decreases relative to the U.S. inflation rate.
(c) A decrease in U.S. income combines with no change in Hong Kong income. (d) A decrease in U.S. income combines with a decrease in Hong Kong income.

Financial Statement Disclosure:

International Clothiers Ltd. has offices in Canada, Bermuda, Europe and the United States. Each of the following events have occurred after the company’s 31 December 2017 year-end, but before their financial statements had been finalized:

a. On 27 January, International Clothiers Ltd entered into a long-term lease for a private airplane for the company president and CEO. The lease requires payments of US$75,000 per month for 60 months.

b. The board of directors met on 15 February 2018 and decided to discontinue its shoe division due to continuing losses and a change in business strategy.

c. One of the company’s major retail customers declared bankruptcy on 22 March. The retail customer accounted for 20% of International Clothier’s year-end receivables and 35% of International Clothier’s revenue in 20x7.

In New York, which has the largest ride-for-hire fleet in the United States, licenses have been issued for 13,437 taxicabs. There are an estimated 42,000 drivers in the city, with a licensed vehicle being used by two or three drivers a day. In 2014, only 6% of cab drivers in New York were born in the United States, and 36% came from Bangladesh and Pakistan. The New York taxi fleet picks up 600,000 passengers per day. An estimated 25,000 livery cars provide for-hire service by prearrangement and carry 500,000 passengers per day. 10,000 “black cars” provide services mostly for corporate clients.

Regulators have long required that taxicabs available to be hailed on the street be licensed. The license is to ensure that the taxi service is safe and reliable, and that fares are fair. For-hire vehicles must be insured to cover drivers and passengers, meet safety standards, and (if taxicabs) have a sealed meter. Regulations also require that licensed cabs be quickly and easily identifiable. This is normally achieved by a distinctive color (e.g., yellow). Cabs must also display whether or not they are in service.

Taxicabs charge a regulated fare, set by a government agency, based on the time and distance of the trip, as measured by a meter. Some trips to and from established destinations, such as an airport, may have a fixed price and will displayed in the cab. Taxicabs are required to carry standardized meters that must be prominently displayed, are sealed and periodically checked to ensure that the proper fare is being charged. Limousine services are generally prohibited from charging fares based on time and distance, and they do not carry a meter. Typically, fees are based on time, often with a minimum billed time. The fee normally has to be agreed on in advance.

In many jurisdictions the licensing system limits the supply of taxicabs. One common variant of licensing is the medallion system that is used in cities such as New York, Boston, Chicago and San Francisco. Medallions are small metal plates attached to the hood of a taxi certifying it for passenger pickup throughout a defined area (normally metropolitan boundaries). When the medallion system was first introduced in New York in 1937, the idea was to make sure that taxi driver was not a criminal luring passengers into his vehicle. To get a medallion, the taxi service has to adhere to the regulatory requirements in that jurisdiction and be approved by the appropriate regulatory agency. Medallions may be given to individual taxi drivers who own their own cars, but more typically taxi companies that own fleets of cars acquire them. The taxi companies then lease cars and medallions to drivers on a daily or weekly basis. In some locations the driver may own the car, but lease or purchase the medallion from an agent who has acquired it. An example would be Medallion Financial, a publicly traded company that owns hundreds of medallions in New York, sells them to aspiring young cabbies, and arranges for loans to finance their purchase.

In cities that utilize a medallion system the supply of medallions has often been limited. The rationalizations for doing this include ensuring quality, guaranteeing a fair return to taxi companies, and helping to support demand for other forms of public transportation, such as buses, trains and the subway. It has also been argued that limiting the number of cabs helps to reduce congestion and pollution.

In practice, the supply of medallions has often not kept pace with growing population. In New York, Chicago and Boston for example, the number of medallions issued has barely budged since the 1930s. In New York, there were 11,787 medallions issued after World War II, a number that remained constant until 2004. By 2014 there were 13,437 medallions issued in New York.

Medallions can be traded. Thus, over time, a secondary market in medallions has developed. In this market, the price is not set by the agency issuing them, but by the laws of supply and demand. The effect of limited supply has been to drive up the price of medallions. In New York, taxi medallions were famously selling for over $1 million in 2012. In Boston the price was $625,000. In San Francisco the price was $300,000 and the city took a $100,000 commission on the sale of medallions. The average annual price of medallions surged during the 2000s. In New York, prices increased 260% between 2004 and 2012. The inflation adjusted annualized return for medallions over this time period in New York was 19.5%, compared to a 3.9% annual return for the S&P 500.

As noted above, drivers often do not own the medallions. There are three players in many taxi markets: the medallion holders (often taxi companies) who have acquired the right to operate a taxi from the regulatory agency, the taxi driver, and taxi dispatch companies. A taxi dispatch company is a middleman or broker, who typically matches available cabs with customers and takes a fee for its scheduling services. While an individual taxi driver may own a medallion, most often taxi companies own them. Tax companies own a fleet of cabs, which they lease out to drivers (with a medallion). A minority of drivers may own their own cab. In New York, about 18% of cabs were owner operated in 2014, putting most medallions in the hands of taxi companies.

In New York, regulations allow medallion owners to lease them out to drivers for 12-hour shifts. The critical problem facing a driver is that they must get access to a medallion in order to make a living. Due to this, companies that own medallions can extract high fees from drivers. There are also reports that some taxi dispatch companies use their position as schedulers to extract payment in the form of bribes from drivers in return for good shifts.

Drivers, who legally are viewed as “independent contractors”, can begin a 12-hour shift owing as much as $130 to their medallion leasing company. They may not break even until half way through their shift. One consulting company report found that in 2006 a driver’s take home pay in New York for a 12-hour shift averaged $158. In 2011, the New York transportation authority calculated that it was $96. A study of taxi drivers in Los Angeles found that drivers worked on average 72 hours a week for a median take home wage of $8.39 an hour. The LA drivers were paying $2000 in leasing fees per month to taxi companies. None of the drivers in the LA study had health insurance provided by their companies, and 61% were completely without health insurance. Given the compensation, it is perhaps not surprising that some drivers can be rude, impatient, and prone to drive fast and take poor care of their cabs.

The LA study noted that because city officials heavily regulate the taxi business, taxi companies are active politically, paying lobbyist to advocate their interests and contributing to the campaign funds of local politicians. The same is true in New York, where the medallion owners trade association, the Metropolitan Taxi Board of Trade, lobbies hard to influence public policy. In 2011, for example, medallion owners were initially able to block plans to create a fleet of green “Boro” cabs to serve New York’s outer boroughs. They argued that doing so would drive down the price of their medallions. In June 2013, however, the New York Supreme Court overruled lower court rulings and allowed the licensing of Boro cabs to go ahead. The intention now is to issue 18,000 new licenses to green cabs. These cabs, however, will not be able to pick up passengers in lower Manhattan, which remains the territory of yellow cabs.

Analyze the competitive structure of the taxi market such as New York prior to the introduction of Uber?

1) You visited Switzerland over summer and brought back 3,722.25 swiss francs to the United States. How many U.S. dollars will you get if you exchange your swiss francs for U.S. dollars? The exchange rate is 1 U.S dollar = 1.0147 swiss francs.

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

2) Suppose the exchange rate between U.S. dollars and Swiss francs is SF 1.224 = $1.00, and the exchange rate between the U.S. dollar and the euro is $1.00 = 1.1651 euros. What is the cross-rate of Swiss francs to euros (SF/Euro)?

Enter your answer rounded off to FOUR decimal points.

3) ABC Company sells 2,412 chairs a year at an average price per chair of $182. The carrying cost per unit is $22.78. The company orders 344 chairs at a time and has a fixed order cost of $113.3 per order. The chairs are sold out before they are restocked. What are the total shortage costs?

Enter your answer rounded off to two decimal points. Do not enter comma or $ in the answer box. For example, if your answer is 12.345 then enter as 12.35 in the answer box.