It is January 1 2020 and you have recently started a new company, Green- Drone, that produces flying drones for garden maintenance. You are still at the product development stage but would like to evaluate the financial feasibility of the project. Here are some information about the company:

• - R&D expenditures. In order to develop the drones, you need to hire an engineer for 5 years at an annual salary of $96,000. The salary is paid monthly at the end of the month in equal amounts, i.e. 96,000/12 per month for the first year. To stay competitive, you expect you will have to grow the annual salary at a rate of 3%, starting the next year. The engineer contract starts today, i.e., on January 1 2020.

• - Production cost. Once the product is developed in 5 years (Jan- uary 1 2025), you will start the production of your drones. Each product is expected to cost $265 to produce. The cost is to be paid to the supplier at the beginning of a month.

• - Pricing and sales. You plan to sell the drones for $325 a unit over the next three years, i.e., until January 1 2028. All sales for products produced in a month are collected at the end of the month.

  The appropriate discount rate r is 5%, annually compounded. Denoting the quantity of drones sold in a month by Q. How many drones do you need to sell per month to make this project profitable (i.e., generate a positive NPV)?

Indeco, a U.S. C corporation, operates Grange, a sales branch in Staccato. Indeco’s U.S. corporate marginal tax rate is 35%; it is 20% for Staccato. Grange’s pre-tax profit for the year is $1,000,000. There is no income tax treaty between the United States and Staccato. Staccato’s currency is the U.S. dollar. Compute Indeco’s combined U.S. and foreign income tax on the Grange profits under each of the following assumptions. If an amount is zero, enter "0". If required, use the minus sign to indicate a "refund". U.S. Income Tax Staccato Income Tax Combined Tax Liability a. U.S. income tax law allows no deduction or credit for foreign income taxes paid. $ 350,000 $ 200,000 $ b. U.S. income tax law allows only a deduction for foreign income taxes paid. $ $ 200,000 $ c. U.S. income tax law allows only an exclusion of foreign branch profits. $ 0 $ 200,000 $ d. U.S. income tax law allows only a credit for the full amount of foreign income taxes paid. $ $ 200,000 $ e. U.S. income tax law allows only a credit for the full amount of foreign income taxes paid. The applicable Staccato tax rate is now 40%. $ $ 400,000 $ f. U.S. income tax law allows only a credit for the full amount of foreign income taxes paid, but limited currently to the corresponding tax on this income at U.S. rates. The applicable Staccato tax rate is now 40%.

Correspondence Assignment

From your college years, you have hands-on experience with a wide range of social media tools, having used them to collaborate on school projects, to become involved in your local community, to learn more about various industries and professions, to research potential employers during your job search, and to stay in touch with family and friends at home. In fact, without social media, you might've never heard about your current employer in the first place. Moreover, your use of social media on the job has already paid several important dividends, including finding potential sales contacts at several large companies (which you referred to the sales department), connecting with peers in other companies to share ideas for working more efficiently, and learning about some upcoming legislative matters in your state that could hamper your company's current way of doing business.

You hoped that by setting an example through your own use of social media at work, your new colleagues and company management would quickly adopt these tools as well. However, just the opposite has happened. Waiting in your e-mail inbox this morning was a message from CEO Nicholas Meyer announcing that the company is now cutting off access to social networking websites and banning the use of any social media at work for all employeesexcept employees in the sales, marketing, and public relations departments. The sales, marketing, and public relations departments retain access to all social media tools in the new policy. The message says that for other employees using company time and company computers for socializing is highly inappropriate and might be considered grounds for dismissal in the future.

Your task: You fight the urge to fire off a hotly worded reply to the CEO about how social media is used by other departments to support the company's success. Instead, you decide to send an email to your immediate superior Anna Abrams that explains why you believe the new policy should be reversed. Using your supervisor's favorite medium, write an email explaining why Facebook, Twitter, and other social networking technologies are valid and valuable business tools and ask for action within your reader's scope of power.

Note, this situation or scenario is the most complex of the ones you have completed this semester. Notice that you're writing to an immediate supervisor about a policy that someone at an even higher level (the CEO) wrote. For this situation, take time to consider the power levels of everyone involved. In particular, consider carefully what action you should ask for (and how) and what kind of information your primary (and secondary) reader(s) would need to be persuaded to act. Consider, too, how your primary reader might use your message.

Smith Co. operates business in the United States and New Zealand. In attempting to assess its economic exposure, it compiled the following information.

      i.    Smith’s U.S. sales are slightly influenced by the New Zealand dollar (NZ$) value, due to confronts rivalry from New Zealand exporters. It estimates the U.S. sales based on the following three exchange rate scenarios:

                                                                               Revenue from U.S. Business

                        Exchange Rate of NZ$                             (in millions)

                                   NZ$ = $.48                                              $100

                                   NZ$ =   .50                                                105

                                   NZ$ =   .54                                                110

      ii.    Revenues for Smith Co. in New Zealand dollars are projected to be NZ$600 million.

      iii.   Cost of goods sold is projected at $60 million from the U.S. materials purchase and NZ$100 million from the New Zealand materials purchase.

      iv.  Fixed operating expenses are valued at $30 million.

v.   Variable operating expenses are projected at 20 percent of total sales (after including New Zealand sales, translated to a dollar amount).

vi.  Interest expense is projected at $20 million on prevailing U.S. loans, and the company has no existing New Zealand loans.

Questions:

1. Generate a forecasted income statement for Smith Co. under each of the three exchange rate scenarios.                                                               

Also answer the following questions based on the rubric.                     

2. Discuss how Smith’s projected earnings before taxes are influenced by the vital of exchange rate forecasting. Justify your viewpoints.                                                    

Describe how Smith Co. can restruc­ture its operations to minimize the earnings sensitivity to the degree of exchange rate movements without reducing its business volume in New Zealand.

Smith Co. operates business in the United States and New Zealand. In attempting to assess its economic exposure, it compiled the following information.

      i.    Smith’s U.S. sales are slightly influenced by the New Zealand dollar (NZ$) value, due to confronts rivalry from New Zealand exporters. It estimates the U.S. sales based on the following three exchange rate scenarios:

                                                                               Revenue from U.S. Business

                        Exchange Rate of NZ$                             (in millions)

                                   NZ$ = $.48                                              $100

                                   NZ$ =   .50                                                105

                                   NZ$ =   .54                                                110

      ii.    Revenues for Smith Co. in New Zealand dollars are projected to be NZ$600 million.

      iii.   Cost of goods sold is projected at $60 million from the U.S. materials purchase and NZ$100 million from the New Zealand materials purchase.

      iv.  Fixed operating expenses are valued at $30 million.

v.   Variable operating expenses are projected at 20 percent of total sales (after including New Zealand sales, translated to a dollar amount).

vi.  Interest expense is projected at $20 million on prevailing U.S. loans, and the company has no existing New Zealand loans.

Questions:

1. Generate a forecasted income statement for Smith Co. under each of the three exchange rate scenarios.                                                               

Also answer the following questions based on the rubric.                     

2. Discuss how Smith’s projected earnings before taxes are influenced by the vital of exchange rate forecasting. Justify your viewpoints.                                                    

Describe how Smith Co. can restruc­ture its operations to minimize the earnings sensitivity to the degree of exchange rate movements without reducing its business volume in New Zealand.

St. Paul Co. does business in the United States and New Zealand. In attempting to assess its economic exposure, it compiled the following information.

      a.   St. Paul’s U.S. sales are somewhat affected by the value of the New Zealand dollar (NZ$), because it faces competition from New Zealand exporters. It forecasts the U.S. sales based on the following three exchange rate scenarios:

                                                                               Revenue from U.S. Business

                         Exchange Rate of NZ$                              (in millions)

                                   NZ$ = $.48                                             $100

                                   NZ$ =   .50                                                105

                                   NZ$ =   .54                                                110

      b.   Its New Zealand dollar revenues on sales to New Zealand invoiced in New Zealand dollars are expected to be NZ$600 million.

      c.   Its anticipated cost of materials is estimated at $200 million from the purchase of U.S. materials and NZ$100 million from the purchase of New Zealand materials.

      d.   Fixed operating expenses are estimated at $30 million.

Variable operating expenses are estimated at 20 percent of total sales (after including New Zealand sales, translated to a dollar amount).

      f.    Interest expense is estimated at $20 million on existing U.S. loans, and the company has no existing New Zealand loans.

      Forecast net cash flows for St. Paul Co. under each of the three exchange rate scenarios. Explain how St. Paul's projected net cash flows are affected by possible exchange rate movements. Explain how it can restruc­ture its operations to reduce the sensitivity of its net cash flows to exchange rate movements without reducing its volume of business in New Zealand.

Americo​ Industries' Consolidate Earnings. Americo is a​ U.S.-based multinational manufacturing firm with ​ wholly-owned subsidiaries in​ Brazil, Germany, and​ China, in addition to domestic operations in the United States. Americo is traded on the NASDAQ. Americo currently has

647,000

shares outstanding. The basic operating characteristics of the various business units are as​ follows:  ​(Click on

the   

icon to import the table into a​ spreadsheet.)

Americo must pay corporate income tax in each country in which it currently has operations.

a. After deducting taxes in each​ country, what are​ Americo's consolidated earnings and consolidated earnings per share in U.S.​ dollars?

b. What proportion of​ Americo's consolidated earnings arise from each individual​ country?

c. What proportion of​ Americo's consolidated earnings arise from outside the United​ States?

a. After deducting taxes in each​ country, what are​ Americo's consolidated earnings and consolidated earnings per share in U.S.​ dollars?

Calculate the business performance per country​ below:  ​(Round to two decimal places. Round exchange rates to four decimal​ places.)

A. A company produces steel rods. The lengths of the steel rods are normally distributed with a mean of 162.4-cm and a standard deviation of 0.6-cm. For shipment, 16 steel rods are bundled together.
Find the probability that the average length of a randomly selected bundle of steel rods is less than 162.6-cm.
P(¯xx¯ < 162.6-cm) =

B. A company produces steel rods. The lengths of the steel rods are normally distributed with a mean of 246.8-cm and a standard deviation of 1.1-cm. For shipment, 24 steel rods are bundled together.
Find the probability that the average length of a randomly selected bundle of steel rods is greater than 247.3-cm.
P(¯xx¯ > 247.3-cm) =

C. Business Weekly conducted a survey of graduates from 30 top MBA programs. On the basis of the survey, assume the mean annual salary for graduates 10 years after graduation is 149000 dollars. Assume the standard deviation is 39000 dollars. Suppose you take a simple random sample of 77 graduates.
Do not use probability tables to find the probabilities below as they may not be accurate enough.
Find the probability that a single randomly selected salary is at least 144000 dollars.
P(X > 144000) =
Find the probability that a sample of size n=77n=77 is randomly selected with a mean that is at least 144000 dollars.
P(¯xx¯ > 144000) =

V. Rahr and Sons is a Fort Worth brewery founded by Fritz Rahr, a Neeley undergraduate and MBA. Currently the company makes Rahr Blonde Lager, Rahr’s Red, and Ugly Pug brews. They are considering a new beer, Frog Princess, with which to celebrate their ties to TCU. The project includes an initial outlay of $750,000 for the purchase of capital equipment that will be depreciated straight line to zero over six years.

Sales are expected to be $400,000 in years 1-3 and $600,000 in years 4-6. Production costs during years 1-6 are as follows: fixed costs (not including depreciation) are expected to be $150,000 per year; variable costs per year will be 40% of sales. The project will require an initial investment in NWC of 200,000 in year 0.

Beyond year six, the company expects that sales and unlevered net income in year seven will be 4% higher than that in year 6, and will continue growing at 4% per year infinitely. Additionally, in year 7 and beyond, new capital expenditures net of depreciation, and increases in NWC, combined, will be 6% of sales. Assume the marginal tax rate is 21%. The appropriate discount rate is 8%.

What is the NPV of the project? What is the IRR? Should the project be undertaken?

I've asked this question three times now and gotten three different answers so I want to see if this will confirm the right one. Thanks

Kempton owns a plumbing repair service company that has been in business for thirty years in Shreveport Louisiana (population 198,675). The company employs 50 repairmen and repairwomen that work in two person teams doing plumbing repair jobs. Kempton’s son Myron is going to be taking over the business and has lots of ideas about improving incentives. Equipped with what he has learned in the MBA program at LSU, he has established that (1) customer satisfaction, (2) capacity utilization (the plumbing repair service people need to be working when they are on the clock) and (3) the profit margin of the service (some repairs involve more parts than others and the mark up the customers on the parts is high) are the company’s profit drivers.

Myron has decided to implement a program where the plumber’s bonuses are based on a formula that has 40% weight on customer satisfaction (measured by post-service customer satisfaction surveys), 30% weight on capacity utilization (measured by number of jobs completed) and 30% weight on profit margin (measured by number of high mark-up jobs completed).

Explain to Myron why, while he would like to see improvements in the plumbers’ performance on all three dimensions, he is more likely to see significant improvement on one dimension and little or no improvement on the other two dimensions.