Roho Company acquired equipment on July​ 1, 2019, for $100,000. The residual value is​ $20,000 and the estimated life is 5 years or​ 40,000 hours. Compute the depreciation expense for the years ending December​ 31, 2019 and December​ 31, 2020 if Roho Company uses the double−declining−balance method of depreciation.

A. $9000 for​ 2019; $ 36400 for 2020

B. $20000 for​ 2019; $ 32000 for 2020

C. $4500 for​ 2019; $ 9000 for 2020

D. $40000 for​ 2019; $ 24000 for 2020

We want to be local and global, small and big, radically decentralized with central reporting and control. If we can solve those contradictions, we can create real organizational advantage'. - The former CEO of ABB

Questions:
1- Based on the international corporate strategy, how can a company be local or global?
2- Does the corporate strategy (local or global) depend on the sector, customers or industry?
3- How can companies solve the contradictions of being local and global?

We want to be local and global, small and big, radically decentralized with central reporting and control. If we can solve those contradictions, we can create real organizational advantage'. - The former CEO of ABB

Questions:
1- Based on the international corporate strategy, how can a company be local or global?
2- Does the corporate strategy (local or global) depend on the sector, customers or industry?
3- How can companies solve the contradictions of being local and global?

There are both advantages and disadvantages in doing business internationally. Read Case # 2, Missed Call, on page 210 of your text. Also, review the list of potential advantages and drawbacks in Table 7.1 on page 198. What international strategy advantages and drawbacks can you see in this case.

Do you remember your first or even second mobile phone? Chances are it might have been one made by Finnish company, Nokia Corporation. Mine was. It was a beautiful steel blue color and was, I thought, pretty slick. Nokia phones back then were quite popular with consumers and positioned the company as one of the leading mobile phone makers. In 1998, Nokia sold more than 40 million mobile phones to surpass Motorola as the world’s #1 mobile phone company. During this time period, Nokia was light years ahead of its rivals with digital phones. However, “Nokia was caught sleeping in 2007 when Apple Inc.’s iPhone redefined the cellphone as a PC-like device with a touch screen and sleek software.” Since that crucial time, Nokia has lost 75 percent of its market value and is struggling to catch up to Apple and Google Inc.’s Android.

Despite its failure to recognize the market-changing characteristics of Apple’s iPhone, Nokia is still the world’s largest handset manufacturer by volume. Europe is the company’s largest combined market, with about a third of sales. Somewhat surprisingly, China is Nokia’s largest single-country market, accounting for nearly 20 percent of sales. And the United States accounts for only 4 percent of sales, and India (another important target) accounts for only 7 percent of sales. The company has been crafting strategies it hopes will help position it as a dominant force once again in this industry. New CEO Stephen Elop, the first non-Finnish leader and a former top Microsoft executive, pledged to turn around the struggling company.

CEO Elop’s initial plans were aimed at streamlining its smartphone operations costs and speeding delivery of new products. He said, “Nokia has been characterized as an organization where it is too hard to get things done.” More than anything else, the changing market dynamics demand that we must improve our ability to aggressively lead through changes in our environment.” Getting its products to market faster would be a key failing that would have to be improved. In addition to the first round of 1,800 jobs cut, Elom eliminated several senior officials on the company’s group executive board. He also sent a memo to Nokia employees that compared the company’s predicament in catching up to Apple and Google in smartphones to “that of a man who was standing on a burning oil rig at sea. Standing there, he needed to make a choice and he decided to jump.” He went on to say that “Nokia, too, had to jump metaphorically—to take bold action to make up for lost ground.” And bold actions it has taken.

In February 2011, Jo Harlow, the head of smart devices at Nokia, “stood before a packed convention hall at the Mobile World Congress, the cellphone industry’s most important trade show, to explain the Finnish company’s new software alliance with Microsoft.” That agreement had been announced in London only a few days earlier. But, “the need for the deal had been so urgent that Nokia and Microsoft, grasping for a foothold in a mobile computing industry that was quickly slipping away from them, had gone public without a definitive legal agreement, just a handshake and a promise to work together, somehow.” She told the audience that Nokia and Microsoft would produce their first phone using the Windows operating system by the end of the year—a pace two to three times faster than Nokia’s past product introductions. Getting that done would “require an accelerated, effective collaboration with a completely different corporate culture in a creative endeavor so intimate that both would have to discard mutual distrust to make it work.”

By mid-2011, Nokia had unveiled a new smartphone and three lower-priced handsets as initial steps in its transition to Microsoft software. Although analysts described the products as well-designed with an intuitive user interface, they also said the products would be unlikely to help improve the company’s difficulties as there was no carrier support or apps developers. In early fall 2011, the company sold 2,000 wireless patents and patent applications to Ottawa, Canada-based Mosaid Technologies. Many technology companies are using this strategy to “essentially outsource the sometimes expensive process of squeezing revenue out of their patent holdings.” In addition, the company announced another 3,500 job cuts by closing a factory in Romania and transferring production to more efficient plants in Asia. Elop said, “We are seeing solid progress against our strategy, and with these planned changes we will emerge as a more dynamic, nimble and efficient challenger.”

Now, it’s do-or-die for Nokia. One year after the announcement of the Microsoft alliance, the company’s Nokia Lumia 900 smartphone was introduced at the Consumer Electronics Show in Las Vegas in February 2012. “The high-end device marks perhaps the company’s last chance to re-establish itself as a serious player in the U.S.” Will the market once again hang up on Nokia or will it take the call?

On September 30, 2020, Peace Frog International (PFI) (a U.S.-based company) negotiated a two-year, 2,800,000 Chinese yuan loan from a Chinese bank at an interest rate of 4 percent per year. The company makes interest payments annually on September 30 and will repay the principal on September 30, 2022. PFI prepares U.S. dollar financial statements and has a December 31 year-end. Relevant exchange rates are as follows:

1. Prepare all journal entries related to this foreign currency borrowing.
2. Taking the exchange rate effect on the cost of borrowing into consideration, determine the effective interest rate in U.S. dollars on the loan in each of the three years 2020, 2021, and 2022.

Review the following information pertaining to Denzel Company.

1. A patent was purchased on January 2, 2018, for $39,000 when the remaining legal life was 16 years. On January 2, 2020, Denzel determined that the remaining useful life of the patent was only eight years from the date of its acquisition.
2. On January 1, 2020, Denzel Company purchased a second patent for $48,000 cash. At January 1, 2020, 6 years of the patent's legal life of 20 years had already expired.
3. On June 30, 2020, Denzel Company paid a firm $4,800 for a new trademark. Denzel considers the life of the trademark to be indefinite.
4. On November 1, 2020, Denzel Company acquired all noncash assets and assumed all liabilities of Lee Company at a cash purchase price of $72,000. Denzel determined that the fair value of the identfiable net assets acquired in the transaction is $70,200.

Note: When answering the following questions, do not round until your final answer. Round your final answer to the nearest whole number.

Required

a. What is the carrying value of intangible assets on December 31, 2020? Assume no impairment losses were recognized in prior periods.

$Answer

b. What is amortization expense for 2020?

$Answer

PC-World is a U.S. manufacturer of personal computers. The CEO is looking at opportunities for off-shore production. The selection of the country where PC-World will establish a production facility will depend on the following two factors: 1. The local wage in US$ terms; and 2. The rate of unemployment. According to the CEO, a low wage country will give the company a cost advantage, while a high unemployment rate will mean that there are plenty of workers available to work at the manufacturing facility. How would you advice the CEO regarding the use of these two indicators as the selection criteria?

PLEASE READ AND ANSWER

CASE #2 MISSED CALL (STRATEGIC MANAGEMENT IN ACTION SIXTH EDITION)

Do you remember your first or even second mobile phone? Chances are it might have been one made by Finnish company, Nokia Corporation. Mine was. It was a beautiful steel blue color and was, I thought, pretty slick. Nokia phones back then were quite popular with consumers and positioned the company as one of the leading mobile phone makers. In 1998, Nokia sold more than 40 million mobile phones to surpass Motorola as the world's #1 mobile phone company. During this time period, Nokia was light years ahead of its rivals with digital phones. However, "Nokia was caught sleeping in 2007 when Apple Inc.'s iPhone redefined the cellphone as a PC-like device with a touch screen and sleek software." Since that crucial time, Nokia has lost 75 percent of its market value and is struggling to catch up to Apple and Google Inc.'s Android.

Despite its failure to recognize the market-changing charac­teristics of Apple's iPhone, Nokia is still the world's largest hand­ set manufacturer by volume. Europe is the Company's largest combined market, with about a third of sales. Somewhat surpris­ ingly, China is Nokia's largest single-country market, accounting for nearly 20 percent of sales. And the United States accounts for only 4 percent of sales, and India (another important target) accounts for only 7 percent of sales. The company has been craft­ing strategies it hopes will help position it as a dominant force once again in this industry. New CEO Stephen Elop, the first non- Finnish leader and a former top Microsoft executive, pledged to turn around the struggling company.

CEO Elop's initial plans were aimed at streamlining its smart- phone operations costs and speeding delivery of new products. He said, "Nokia has been characterized as an organization where it is too hard to get things done." More than anything else, the changing market dynamics demand that we must improve our ability to aggressively lead through changes in our environ­ment." Getting its products to market faster would be a key failing that would have to be improved. In addition to the first round of 1,800 jobs cut, Elom eliminated several senior officials on the company's group executive board. He also sent a memo to Nokia employees that compared the Company's predicament in catching up to Apple and Google in smartphones to that of a man who was standing on a burning oil rig at sea. Standing there, he needed to make a choice and he decided to jump." He went on to say that "Nokia, too, had to jump metaphorically—to take bold action to make up for lost ground." And bold actions it has taken.

In February 2011, Jo Harlow, the head of smart devices at Nokia, "stood before a packed convention hall at the Mobile World Congress, the cellphone industry's most important trade show, to explain the Finnish company's new software alli­ance with Microsoft." That agreement had been announced in London only a few days earlier. But, "the need for the deal had been so urgent that Nokia and Microsoft, grasping for a foothold in a mobile computing industry that was quickly slip­ ping away from them, had gone public without a definitive legal agreement, just a handshake and a promise to work together, somehow." She told the audience that Nokia and Microsoft would produce their first phone using the Windows operating system by the end of the year—a pace two to three times faster than Nokia's past product introductions. Getting that done would "require an accelerated, effective collaboration with a completely different corporate culture in a creative endeavor so intimate that both would have to discard mutual distrust to make it work."

By mid-2011, Nokia had unveiled a new smartphone and three lower-priced handsets as initial steps in its transition to Microsoft software. Although analysts described the products as well-designed with an intuitive user interface, they also said the products would be unlikely to help improve the company's diffi­culties as there was no carrier support or apps developers. In early fall 2011, the company sold 2,000 wireless patents and patent applications to Ottawa, Canada-based Mosaid Technologies. Many technology companies are using this strategy to "essen­tially outsource the sometimes expensive process of squeezing revenue out of their patent holdings." In addition, the com­pany announced another 3,500 job cuts by closing a factory in Romania and transferring production to more efficient plants in Asia. Elop said, "We are seeing solid progress agains tour strat­egy, and with these planned changes we will emerge as a more dynamic, nimble and efficient challenger."

Now, it's do-or-die for Nokia. One year after the announce­ment of the Microsoft alliance, the company's Nokia Lumia 900 smartphone was introduced at the Consumer Electronics Show in Las Vegas in February 2012. "The high-end device marks per­ haps the company's last chance to re-establish itself as a serious player in the U.S." Will the market once again hang up on Nokia or will it take the call?

DISCUSSION QUESTIONS

1. What international strategy advantages and drawbacks can you see in this case? Discuss.

2. What do you think are the difficulties in being a market- leading competitor trying to compete in so many different geographic areas? What resources and capabilities would such an organization need? What impact would the fact that the competitor's industry is a continually changing one have on its strategies?​​​​​​​

3. What steps has Nokia's CEO taken to turn around his struggling company? Be specific.​​​​​​​

4. One of the most interesting things to me about this story is the alliance between Nokia and Microsoft. How did this get done? What do you think that process entailed?

THANK YOU!

Suppose that GMAT scores of all MBA students in Canada are normally distributed with a mean of 550 and a standard deviation of 120.

a. A university (that is representative of the MBA students in the U.S.) claims that the average GMAT scores of students in its MBA program are at least 550. You take a sample of 121 students in the university and find their mean GMAT score is 530. Can you still support the University’s claim? Test at 5% significance level. Interpret the test result.

b. Calculate the p-value for the test in part (a). If the hypothesis was to be tested at 10% significance level instead of 5% would your answer to part (a) change? Explain why without actually conducting the test.

c.Do you need the assumption that “GMAT scores of all MBA students in the U.S. are normally distributed” to answer part (a) or (b)? Explain.

d. You discover that the population standard deviation you’ve been using is actually the sample standard deviation. All other sample information holds. If you were still conducting the hypothesis test as you set up in part (a), would your test statistic/ distribution change? How?

And would you need the assumption of normality of the population now? Why?