1.Mental health. The National Survey on Drug Use and Health reports that 18.1% of all adults in the United States had a mental illness in 2014. Among adults with a substance use disorder, 39.1% had a mental illness. By comparison, only 16.2% of adults without a substance use disorder had a mental illness. The report also states that 3.3% of American adults had both a mental illness and a substance use disorder. Use the notation MI and SUD for mental illness and substance abuse disorder, respectively.

1. Express the four percents cited here as probabilities for a randomly selected American adult. Use proper probability notation.

2. Obtain the probability P(SUD|MI). Write a sentence reporting this probability in context.

3. Explain in context why P(SUD|MI) and P(MI|SUD) are not the same thing.

Prior to 1970, maternity was usually treated differently from other medical expenses, either excluded entirely from coverage or subject to a flat lump-sum cash (indemnity) benefit. Why? During the 1970s, 23 states mandated that treatment related to pregnancy be covered the same as any other type of treatment, and in 1978, such coverage became uniform throughout the United States. Would mandated maternity benefits make working in a salaried position more or less attractive to women? Would it make women of childbearing age more or less attractive as employees? Would it increase or decrease the number of births performed by cesarean section? Whom do you think bore the expense of implementing this mandate? (For a discussion of these issues see Jonathan Gruber, “The Incidence of Mandated Maternity Benefits,” American Economic Review 84, no. 3 (1994): 622–641.

True or false to these questions

An executive's discretion and impact on a public policy issue increases as the issue matures over time.

Under the business judgment rule, all states prevent officers and directors from taking into account stakeholders (employees, customers, etc.) when determining whether a decision was made in the best interests of the company.

No state in the United States allows an executive to favor the interests of a stakeholder (e.g., employees) over the interest of shareholders.

Independent negligent acts by two different parties can each be held liable if each was a proximate cause of another's injuries.

The holding of the Dodge v. Ford case was that Ford's planned expansion of the business, to that extent, would be considered as acting within the best interests of the company.

Limited partners of a limited partnershiop never risk more than their investment in the partnership.

All choices of business entity allow the avoidance of double taxation of earnings.

cost control between Germany, Canada, The United Kingdom, and Japan varies and differs from one another. In Japan, costs controlled and the health care system is determine and relies on payroll taxes and thus requires a large employed population. But with a low birth rate and the longest life expectancy in the world, Japan’s population is aging faster than that of other developed nations. In contrast, in Canada, Canadians have found a way to deliver comprehensive care to their entire population at far less cost. In 1970, the year before Canada’s single-payer system was fully in place, Canada and the United States spent approximately the same proportion of their gross domestic products on health care—7.2% and 7.4%, respectively. On the other hand, in the United Kingdom, Two major factors allow the United Kingdom to keep its health care costs low: the power of the governmental single payer to limit budgets and the mode of payment of physicians. While Canada also has a single payer of health services, it had traditionally paid most physicians fee-for-service. In contrast, the United Kingdom relies chiefly on capitation and salary to pay physicians; payment can more easily be controlled by limiting increases in capitation payments and salaries. Moreover, because consultants (specialists) in the United Kingdom are NHS employees, the NHS can and does tightly restrict the number of consultant slots, including those for surgeons. Moreover, in Germany, German health care costs resumed an upward surge, paving the way for a 1993 cost-control law restricting the growth of sickness fund budgets. However, Germany’s health care expenditures as a percent of GDP have continued to rise, from 8.3% in 1990 to 11.3% in 2012. Germany has not fully solved the problem of rising health care expenditures.

I need to add more information to this

Problem 26-01
Investment Timing Option: Decision-Tree Analysis

Kim Hotels is interested in developing a new hotel in Seoul. The company estimates that the hotel would require an initial investment of $16 million. Kim expects the hotel will produce positive cash flows of $2.72 million a year at the end of each of the next 20 years. The project's cost of capital is 12%.

1. What is the project's net present value? A negative value should be entered with a negative sign. Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places.
   $ million
   
2. Kim expects the cash flows to be $2.72 million a year, but it recognizes that the cash flows could actually be much higher or lower, depending on whether the Korean government imposes a large hotel tax. One year from now, Kim will know whether the tax will be imposed. There is a 50% chance that the tax will be imposed, in which case the yearly cash flows will be only $1.44 million. At the same time, there is a 50% chance that the tax will not be imposed, in which case the yearly cash flows will be $4 million. Kim is deciding whether to proceed with the hotel today or to wait a year to find out whether the tax will be imposed. If Kim waits a year, the initial investment will remain at $16 million. Assume that all cash flows are discounted at 12%. Use decision-tree analysis to determine whether Kim should proceed with the project today or wait a year before deciding.
   -Select-It makes sense to proceed with the project today.It makes sense to wait a year before deciding.

Q1. You are an audit manager of Morline & Co, a Public Accounting firm. The audit engagement partner, Joe Tan, has called you into his office to discuss a new audit client. You have been assigned to take charge of the audit for the financial year end, 31 December 2019 of Crown Hotel Group Bhd. (Crown Group) a listed company. The Group operates a chain of luxury hotels across Malaysia. As part of the expansion strategy, Crown Group has recently acquired a new hotel in Melbourne. You are very excited about auditing this luxury group of hotels, and are hoping that you may get to stay in one of the hotels during the audit.

Recently you had a meeting with Joe Tan, Datuk Paul Wong, the managing director of Crown Group, and Lisa Goh, the finance director of Crown Group. From detailed discussions with them, you note the following information:

Background information:
Crown Group owns four hotels in Malaysia namely Dolce, Corus, Korma, Morib, one hotel, Belux in Singapore and a newly acquired hotel in Melbourne namely Aston, which was acquired in September 2019. Each hotel operates through a separate legal entity, and Crown Group owns 100% of each entity. The Group prepares consolidated financial statements on an annual basis. The Head Office is located in Petaling Jaya, Malaysia.

In 2019, the Crown Group had total revenues of RM 90 million (2018: RM 80 million), and operating profits of RM 8,500,000 (2018: RM 11,000,000).

Lisa Goh explained that all the hotels have been performing well over the last year, with the exception of Hotel Belux. See notes below

Information Technology (IT)

Lisa Goh highlighted that the Crown Group relies heavily on the use of information technology (IT) and noted that approximately 96% of bookings are made online via its website. The Group invested significantly in IT over the last six months, which resulted in an extensive upgrade of its website and the development of a user-friendly app. Datuk Paul Wong said, “We have spent a significant amount of money developing our IT systems and ensuring they are secure, as the rapid increase in cybercrime in Malaysia is frightening.” This development cost was capitalised in Financial Year 2019.

Finance team

Each hotel has a finance team, including a financial controller. At the end of every month, a reporting pack is prepared by the financial controller, including a copy of the management accounts, key completed reconciliations and detailed commentary on how the hotel has met the key performance indicators for that particular month. Each reporting pack is submitted to the head office, and the group financial controller reviews them and performs additional reconciliations. The group financial controller also prepares the year-end consolidated financial statements. Lisa Goh has, however, informed you that the group financial controller resigned in November 2019 because he could not cope with the pressure of the job. She has not been able to find a suitable replacement as to date. Lisa has asked if your firm would be able to help with the finalisation of the consolidated financial statements for the year ended 31 December 2019, as her team is currently struggling to find the time needed.

New acquisition

The hotel in Melbourne, Aston was acquired in September 2019 for RM 8,500,000, and will be included in the consolidated financial statements at 31 December 2019. The purchase of the hotel was financed by a bank loan. Datuk Paul Wong explained this was a significant investment for the Crown Group and that a further RM 2 million has since been spent on capital expenditure to ensure it meets the exceptionally high standards of the Group. Datuk Paul Wong has invited the entire audit team to travel to Melbourne for the opening of the hotel in June 2020 as his guests. He has also assured the team will be treated very well while there.

Valuation of the hotel properties

The group policy is to value Land and Buildings at fair value. The calculation of fair value and the allocation of fair value to Land and Buildings requires significant judgement. Datuk Paul Wong confirmed professional valuation experts were appointed to value Land and Buildings at 31 December 2019. Land and Buildings at that date were valued at RM 110 million, representing a revaluation increase of RM 12 million.

Loans and Borrowings
During the financial year to 31 December 2019, the Group borrowed RM 10,500,000 in order to finance the purchase of the Aston, and to complete the renovation work required. The loan is repayable over 10 years and the Group must adhere to strict loan covenants. The bank requires the Group to provide management accounts on a quarterly basis, if a loan covenant is breached, the loan may be due for repayment immediately. Lisa Goh has informed you that the group is also struggling to ensure management accounts for the quarter ended 31 December 2019 will be submitted within the allocated timeframe. The amount of interest paid was extremely significant

Bonus
During the year, a new bonus scheme was introduced for both managers and directors for all the hotel within the group in order to increase revenue. The bonus is directly linked to revenue.

Advance payment
Advance deposits of 50% are collected for those booking for conferences and wedding packages.

Hotel Belux
The hotel Belux is one of the biggest in the Group, and contributes 25% of total revenue is located in Singapore. Although revenue has increased in 2019, profit has fallen significantly due to a number of “special offers” in both accommodation rates and the restaurant. Datuk Paul Wong believes the main causes for this fall are reduced gross margins (due to the successful uptake of the various special offer promotions during the year) and increasing costs (mainly driven by payroll). The number of special offers were approved by management in a bid to counter the tough economic environment within which the hotel operates and thereby increase revenue.

Required:
(i) Identify and explain to the audit partner SEVEN (7) key audit risks in respect of Crown Group.
(ii) Describe the matters Morline & Co should consider in the context of ISA 620 in order to evaluate the adequacy of the expert’s work in relation to engaging the services of a property expert to value Land and Buildings.
(iii) Evaluate the ethical issues(s) if any in respect of the Crown Group audit engagement and recommend appropriate safeguard(s).

Developing an Equation from Average Costs The America Dog and Cat Hotel is a pet hotel located in Las Vegas. Assume that in March, when dog-days (occupancy) were at an annual low of 500, the average cost per dog-day was $14. In July, when dog-days were at a capacity level of 4,000, the average cost per dog-day was $7. (a) Develop an equation for monthly operating costs. (Let X = dog-days per month) Total cost = Answer + Answer * X (b) Determine the average cost per dog-day at an annual volume of 24,000 dog-days.

) In the mid-1990s, Colgate-Palmolive developed a new toothpaste for the U.S. market, Colgate Total, with an antibacterial ingredient that was already being successfully sold overseas. At that time, the word antibacterial was not allowed for such products by the Food and Drug Administration (FDA). In response, the name “Total” was given to the product in the United States. The one word would convey that the toothpaste is the “total” package of various benefits. Young & Rubicam developed several commercials illustrating Total’s benefits and tested the commercials with focus groups. One commercial touting Total’s long-lasting benefits was particularly successful. The product was launched in the United States in January of 1998 using commercials that were designed from the more successful ideas of the focus group tests. Suppose 32% of all people in the United States saw the Total commercials. Of those who saw the commercials, 40% purchased Total at least once in the first 10 months of its introduction. According to U.S. Census Bureau data, approximately 20% of all Americans were in the 45-64 age category. Suppose 24% of the consumers who purchased Total for the first time during the initial 10-month period were in the 45-64 age category. Within three months of the Total launch, Colgate-Palmolive grabbed the number one market share for toothpaste. Ten months later, 21% of all U.S. households had purchased Total for the first time. The commercials and the new product were considered a success. During the first 10 months of its introduction, 43% of those who initially tried Total purchased it again. a) What percentage of U.S. households purchased Total at least twice in the first 10 months of its release? b) Can you conclude the initial purchase of Total was independent of age? Use a quantitative argument to justify your answer. c) Calculate the probability that a randomly selected U.S. consumer is either in the 45-64 age category or purchased Total during the initial 10-month period. d) What is the probability that a randomly selected person purchased Total in the first 10 months given that the person is in the 45-64 age category? e) What percentage of people who did not see the commercials purchased Total at least once in the first 10 months of its introduction?

American customer satisfaction index: Starbucks in the U.S. 2006-2016

ABOUT THIS STATISTIC: This statistic shows the American customer satisfaction index scores of Starbucks in the United States from 2006 to 2016. Starbucks had an ACSI score of 75 in 2016.

Starbucks

The Starbucks Corporation is a coffeehouse chain based in Seattle which operates more than 25 thousand stores worldwide (as of 2016). Just over 50 percent (around 7,880) of all Starbucks stores were company-operated stores, from which Starbucks generates around 79 percent of its revenue. Around 5,292 stores are licensed stores. Starbucks, which became a publicly traded company on June 26, 1992, generated around 21.32 billion U.S. dollars in revenue in the 2016 fiscal year.

In its company-operated stores Starbucks generates 74 percent of revenue from the sale of beverages, 19 percent from food sales and three percent from the sale of packaged and single serve coffees. Another four percent of retail sales are attributable to coffee-making equipment and other merchandise.

The United States is Starbucks’ biggest and most important market. In 2016, revenues from Starbucks Americas segment amounted to more than 14 billion U.S. dollars. The

Americas segment comprises over 13,000 stores in the U.S., Canada, Mexico, Puerto Rico, Brazil Chile and other American countries with around 86 percent of those stores located in the United States. 2

13. Plot this set of data as a scatterplot in excel. Insert excel graph here:

14. Find the correlation coefficient.
15. Is it positive or negative?
16. What does the sign tell us?
17. What does the correlation imply about the relationship between the time and the satisfaction?

18. Is the correlation significant? Why or why not? (Answer in 1-2 complete sentences.) (Use the Pearson calculator).

20) Draw the trendline in excel. Can the regression line be used for prediction? No, it is too weak. Insert excel graph here: