Alpaca Inc. purchased a corner lot in 2010 at a cost of $500,000. The lot was recently appraised at $800,000. At the time of the purchase, the company spent $25,000 to grade the lot and has been leasing this place as a parking lot for $10,000 a year. The renewal for the lease contract was not expected to expire until 2030. The company now wants to build a new retail store on the site. The building cost is estimated at $75,000.

* Choose all values to be considered and included in calculating the free cash flows for capital budgeting.

1. Purchase price of the corner lot @ $500,000
2. Appraisal of $800,000
3. Grading @ $25,000
4. Parking lot lease @ $10,000 per year
5. Cost to build a new retail store @ $75,000

Group of answer choices

* Choose all values to be considered and included in calculating the free cash flows for capital budgeting.

1. Purchase price of the corner lot @ $500,000
2. Appraisal of $800,000
3. Grading @ $25,000
4. Parking lot lease @ $10,000 per year
5. Cost to build a new retail store @ $75,000

Group of answer choices

I and IV only

II and V only

II, III, and IV only

II and IV only

II, IV and V only

At a trade fair in Leipzig, Germany in October 2010 Mascot’s representative was approached by a major German manufacturer of workwear, who wanted the German manufacturer and Mascot to cooperate on pricing and workwear models, so that they would not, as the representative said, "compete each other out of business". Please analyze what legal problems can be linked to the listed events? You must provide a legal justification for the solution

The respondents of the 2010 HINTS reported their psychological distress on a scale between 0 and 24. In the table below, you will see separate data on two groups of respondents’ distress scores: those who have ever been diagnosed as having cancer, and those who have not.

*formula 4.2 on page 109 and formula 4.3 on page 110 is very helpful to complete this problem set.      

1. Calculate the variance and standard deviation from these statistics for both groups. (4 points)

b.What can you say about the variability in the distress scores for those respondents who have been diagnosed as having cancer and those who have not? Why might there be a difference? Why might there be more variability for one group than for the other? (4 points)

c.Was it necessary in this problem to provide you with the mean value to calculate the variance and standard deviation?

On 4 February 2010 a company issued a bond with a face value of $500,000 that matures exactly 25 years later. The coupon rate is 5% p.a. compounded half-yearly. What is the bond's value on 4 February 2018 assuming the market yield is 8% p.a. compounded half-yearly.

a. $230,139.97

b. $670,428.40

c. $408,757.48

d. $361,916.02

e. $363,175.43

In 2010 and 2011, the government of Greece risked defaulting on its debt due to a severe budget crisis.  Using appropriate bond market graphs, explainthe effects on the risk premium between U.S. Treasury debt and comparable maturity Greek government debt

The mean annual salary offer for a student graduating with a degree in accounting (in 2010) was $48,722.

Suppose that a randomly selected sample of 20 accounting graduates shows an average salary offer of $49,850 with a standard deviation of $3300.

A. How many degrees of freedom are there for the t distribution?  

B. Assume that the population distribution is normal. What is the value of the test statistic, t? Give your answer to two decimal places.

C. If we use a significance level of 0.05, what is the critical value of t? (Hint: Use the attached table. Is this for a one-sided or two-sided test?)  

In 2010, Ticketmaster found out the hard way that the
entertainment industry is not, in fact, as recession-proof as
it was once widely believed to be. Th e company, which sells
tickets for live music, sports, and cultural events, and which
represents a signifi cant chunk of parent company’s Live
Nation Entertainment’s business, saw a drop in ticket sales
that year of a disconcerting 15 percent. Th en there was the
mounting negative press, including artist boycotts, the vitriol
of thousands of vocal customers, and a number of major
venues refusing to do business with Ticketmaster.
Yet 2012 has been more friendly to the company—under

the leadership of former musician and Stanford MBA-
educated CEO Nathan Hubbard, who took over in 2010

when Ticketmaster merged with Live Nation, the country’s
largest concert promoter. Th ird-quarter earnings were
strong, with just under $2 billion in revenue, a 10 percent
boost from the same period last year, driven largely by Live
Nation’s ticketing and sponsorship divisions. Ticketmaster
was largely responsible as well, thanks to the sale of 36 million
tickets worth $2.1 billion, generating $82.1 million in adjusted
operating income, which translates to an increase of
51 percent for the year.
Th at’s because Hubbard knows how to listen, and read the
writing on the wall, “If we don’t disrupt ourselves, someone
else will,” he said, “I’m not worried about other ticketing
companies. Th e Googles and Apples of the world are our
competition.”
Some of the steps he took to achieve this included to
the creation of LiveAnalytics, a team charged with mining
the information (and related opportunities) surrounding
200 million customers and the 26 million monthly site visitors,
a gold mine that he thought was being ignored. Moreover
Hubbard redirected the company from being an infamously
opaque, rigid and infl exible transaction machine for ticket
sales to a more transparent, fan-centered e-commerce
company, one that listens to the wants and needs of customers
and responds accordingly. A few of the new innovations rolled
out in recent years to achieve this include an interactive venue
map that allows customers to choose their seats (instead of
Ticketmaster selecting the “best available”) and the ability to
buy tickets on iTunes.
Hubbard eliminated certain highly unpopular service
fees, like the $2.50 fee for printing one’s own tickets, which
he announced in the inaugural Ticketmaster blog he created.

Much to the delight of event goers—and the simultaneous
chagrin of promoters and venue owners, who feared that the
move would deter sales—other eff orts toward transparency

included announcing fees on Ticketmaster’s fi rst transaction-
dedicated page, instead of surprising customers with them at

the end, while consolidating others. “I had clients say, ‘What
are you doing? We’ve been doing it this way for 35 years,’”
Hubbard recalled, “I told them, ‘You sound like the record
labels.’”
Social media is an integral part of listening, and of course,
“sharing.” Ticketmaster alerts on Facebook shows friends of
purchasers who is going to what show. An app is in the works
that will even show them where their concertgoing friends
will be seated. Not that it’s all roses for Ticketmaster—yet.
Growth and change always involve, well, growing pains,
and while goodwill for the company is building, it will take
some time to shed the unfortunate reputation of being the
company that “everyone loves to hate.” Ticketmaster made
embarrassing headlines in the fi rst month of 2013 after
prematurely announcing the sale of the president’s Inaugural
Ball and selling out a day early as a result, disappointing
thousands. But as the biggest online seller of tickets for
everything from golf tournaments to operas to theater to
rock concerts, and with Hubbard’s more customer-friendly
focus, Ticketmaster should have plenty of opportunity to
repent their mistakes.

Question:

1. Identify the problems that Ticketmaster was facing, using cause and effect analysis. What were the Symptomatic Effects? What were the Underlying Causes?

2. What process(es) did Nathan Hubbard use to Generate Alternatives? What alternatives were available to Mr. Hubbard? What types of Uncertainty did he experience?

1) Apple was effectively a monopolist in the tablet computer market in the spring of 2010. You could go for the iPad or, well, the iPad. It didn’t even come in a choice of colors. Suppose the marginal cost of producing iPads is constant at $200, and the inverse demand curve for iPads is P = 1,000 – 5Q (where Q in millions and P in dollars). The associated marginal revenue is MR = 1,000 – 10Q.

1. How much should Apple charge, and how many will it sell at that price?
2. Compute the consumer surplus and Apple’s producer surplus. (It is helpful if you draw the demand and MC curves first. Recall that CS is the area under demand curve and above the price. PS is the area below the price and above the MC).
3. Now let’s think about how market would look like if Apple behaved like a competitive firm and priced at marginal cost. How many iPads will Apple? Compute the new consumer surplus and Apple’s producer surplus.
4. Compute the value of the “deadweight loss” from monopolization? (Note: One method, use the producer and consumer surpluses you found in parts (b) and (c). Another method, compute the DWL directly by finding the area of the triangle).
5. Draw your results you found in parts (a) – (d) in one P-Q space.
6. Suppose a government regulatory agency sets a price ceiling of $400 per iPad. How many iPads will Apple sell, and what will be its producer surplus?
7. Compute and compare the degrees of monopoly power (Lerner Index) for cases in (a), (c), and (f).
8. Suppose, instead of price ceiling, government imposes a per unit tax of $200. Find the Apple’s price, quantity and producer surplus for iPad.

I have a - e I just need help on f - h

In 2010, Ticketmaster found out the hard way that the
entertainment industry is not, in fact, as recession-proof as
it was once widely believed to be. Th e company, which sells
tickets for live music, sports, and cultural events, and which
represents a signifi cant chunk of parent company’s Live
Nation Entertainment’s business, saw a drop in ticket sales
that year of a disconcerting 15 percent. Th en there was the
mounting negative press, including artist boycotts, the vitriol
of thousands of vocal customers, and a number of major
venues refusing to do business with Ticketmaster.
Yet 2012 has been more friendly to the company—under

the leadership of former musician and Stanford MBA-
educated CEO Nathan Hubbard, who took over in 2010

when Ticketmaster merged with Live Nation, the country’s
largest concert promoter. Th ird-quarter earnings were
strong, with just under $2 billion in revenue, a 10 percent
boost from the same period last year, driven largely by Live
Nation’s ticketing and sponsorship divisions. Ticketmaster
was largely responsible as well, thanks to the sale of 36 million
tickets worth $2.1 billion, generating $82.1 million in adjusted
operating income, which translates to an increase of
51 percent for the year.
Th at’s because Hubbard knows how to listen, and read the
writing on the wall, “If we don’t disrupt ourselves, someone
else will,” he said, “I’m not worried about other ticketing
companies. Th e Googles and Apples of the world are our
competition.”
Some of the steps he took to achieve this included to
the creation of LiveAnalytics, a team charged with mining
the information (and related opportunities) surrounding
200 million customers and the 26 million monthly site visitors,
a gold mine that he thought was being ignored. Moreover
Hubbard redirected the company from being an infamously
opaque, rigid and infl exible transaction machine for ticket
sales to a more transparent, fan-centered e-commerce
company, one that listens to the wants and needs of customers
and responds accordingly. A few of the new innovations rolled
out in recent years to achieve this include an interactive venue
map that allows customers to choose their seats (instead of
Ticketmaster selecting the “best available”) and the ability to
buy tickets on iTunes.
Hubbard eliminated certain highly unpopular service
fees, like the $2.50 fee for printing one’s own tickets, which
he announced in the inaugural Ticketmaster blog he created.

Much to the delight of event goers—and the simultaneous
chagrin of promoters and venue owners, who feared that the
move would deter sales—other eff orts toward transparency

included announcing fees on Ticketmaster’s fi rst transaction-
dedicated page, instead of surprising customers with them at

the end, while consolidating others. “I had clients say, ‘What
are you doing? We’ve been doing it this way for 35 years,’”
Hubbard recalled, “I told them, ‘You sound like the record
labels.’”
Social media is an integral part of listening, and of course,
“sharing.” Ticketmaster alerts on Facebook shows friends of
purchasers who is going to what show. An app is in the works
that will even show them where their concertgoing friends
will be seated. Not that it’s all roses for Ticketmaster—yet.
Growth and change always involve, well, growing pains,
and while goodwill for the company is building, it will take
some time to shed the unfortunate reputation of being the
company that “everyone loves to hate.” Ticketmaster made
embarrassing headlines in the fi rst month of 2013 after
prematurely announcing the sale of the president’s Inaugural
Ball and selling out a day early as a result, disappointing
thousands. But as the biggest online seller of tickets for
everything from golf tournaments to operas to theater to
rock concerts, and with Hubbard’s more customer-friendly
focus, Ticketmaster should have plenty of opportunity to
repent their mistakes.

Questions

How did Mr. Hubbard select his most desirable alternative? Describe which type of Decision Making he used, and explain your findings.

Were the recent decisions that Mr. Hubbard made effective, according to the concepts in Chapter 7 – Decision Making? Explain your response.

The following information from the close of trading on November​ 24, 2010 is for an IBM bond with a face value of ​$1 comma 0001,000 and a maturity date of June 15 comma 2013June 15, 2013​: Coupon​ rate: 7.57.5​% ​Price: ​$1 comma 1581,158 Yield to​ maturity: 1.221.22​% The​ bond's current yield was nothing​%. ​(Round your response to two decimal​ places.) Why is the​ bond's yield to maturity less than its coupon​ rate?