In regards the Telespazio organization, develop and talk in depth about the current evaluation methods, how the organization uses the appriasal assessements to identify employee role, the current appraisal systems and performance ratings, and Telespazios practices for performing appraisal interviews? Include an appraisal tool that would benefit the company and an effective method for performing an appriasal interview. Describe the benefits of using both the appriasal tool and apprials interview in the perfomance apprials practice.

Describe the benefits of using both the appriasal tool and appraisal interview in the performance appriasal practice with Telespazio organization,

You are a CEO. Your company lobbies for subsidies from the government. You are about to finalize your financial reports for the year, and still have some (discretionary) accounting choices to make. Your earnings before interest and taxes are currently (before you make those final discretionary accounting choices) at $100,000. What incentives do you have for making your final discretionary accounting choices, given your bonus plan and the fact that your company lobbies for subsidies from the government. Discuss

In most multi-divisional firms, divisional managers run their divisions as profit centers: they have broad decision rights and are evaluated based on divisional profits.

1. However, these divisional managers’ decision rights do not typically extend to their capital budget. That is, they are not allowed to choose the amount of capital that they will be allowed to invest in their division as that decision is centralized. These divisional managers have valuable information (specific knowledge) about the appropriate capital expenditures for their division. Why aren’t they allowed to choose their capital budget?

2. In a recent paper titled Divisional Managers and Internal Capital Markets Professors Ran Duchin and Denis Sosyura of the University of Michigan show that divisional managers with social ties to the CEO receive more capital. Would you expect multi-divisional firms where divisional managers have social ties the CEO to have a smaller or larger diversification discount than multi-divisional firms where the divisional managers do not have social ties to the CEO? Explain.

Accounting for Restricted Stock Awards

Geelong Technology (GT) is a software company based in Boston. Since January 1, 2015, the company has granted restricted stock to its CEO at the beginning of each year to help boost future company performance. Vesting for each award occurs if the CEO stays employed at the company for a period of two years from the grant of the award.

The par value of the stock is $1.

                                                           

Grant Date	Number of shares	Fair value per share	Service period
1/1/2015	10,000	$6	1 year
1/1/2016	15,000	$8	2 years
1/1/2017	15,000	$10	2 years
1/1/2018	20,000	$11	3 years

It is now September 13, 2018 and the CEO leaves the company.

** Provide in journal entry format the reversal journal entry(s) to correct the CEO's early departure. (Keep in mind the two year award process)

You are well aware of the risks that you face when you buy shares in a company that has shares with different voting rights. Assume that you have no choice but to buy non-voting shares in a company that has both voting and non-voting shares. Which of the following would you view as least dangerous to you (from a corporate governance standpoint)?

• A. Voting shares are not traded and held entirely by CEO
• B. Voting shares are traded, but concentrated in the hands of CEO
• C. Voting shares are traded and widely dispersed across shareholders.
• D. Voting shares are traded and held by CEO and by government-controlled institutions.
• E. Voting shares are traded and held by activist investors.

Blanchard Inc. acquired a packaging machine from CCC Corporation. CCC Corporation completed construction of the machine on January 1, 2020. In payment for the $5 million machine, Blanchard Inc. issued a three-year installment note to be paid in three equal payments at the end of each year. The payments include interest at the rate of 8%.

1. Prepare the journal entry for Blanchard’s purchase of the machine on January 1, 2020.

January 1, 2020:

2. Prepare the partial amortization schedule for the first two years of the 3-year installment note.

Amount of loan
÷ Present value of an ordinary annuity (PVA) of $1
Installment payment (rounded up to the nearest integer)

Date	Cash Payment	Effective Interest	Decrease in Balance	Outstanding Balance
1/1/2020
12/31/2020
12/31/2021
12/31/2022	Not required	Not required	Not required	Not required

3. Prepare the journal entry for the installment payments on December 31, 2020 and December 31, 2021.

December 31, 2020:

December 31, 2021:

Interview a friend or family member about a recent holiday or celebration. Limit yourself to 10 questions that you write in advance, and don’t deviate from them. Record the answers. Then interview another friend or family member about the same holiday or celebration. Ask the first question from your list, then let the answers dictate the rest of the questions. Record the answers. Explain which interview gave you more information and which told you more about the event.

You're a consultant hired by a small company that installs GPS units in semi trucks and school buses. the company is considering investing in a project to manufacture the units themselves (instead of purchasing the new units). they've used their weighted average cost of capital (WACC) of 15 percent to determine that the project has a positive NPV of $3,000.

The CFO and CEO dont agree. the CEO doesnt believe that the WACC is the correct number because the project is risky: its a brand-new venture. The CFO argues that the WACC alread incorporates risk, and the cost of new funds at the source (debt and equity financing) is the only thing that matters.

A. what is WACC? whats the formula?who is correct? why?

B. WHat are two different approaches to determine an appropriate cost of capital that appriately accounts for the different risk? Walk us through the steps in how youwould you proceed. (keep in mind theres more than one correct answer) then identify an advantage and disadvantage of each of these approaches. Lastly, how would you determine if this project should be accepted or erejected ? (no actual computations are needed)

Introduction

Lori Patrick’s conversation earlier that day with Mike Lowe, the company’s

CEO, kept running through Lori’s head during her 45-minute rush-hour

commute home. “What a great opportunity Mike’s given me,” she thought.

“The CEO of this organization believes in the value of HR and asked me to

tell him how HR can help the company meet its strategic goals. When I was

studying for my master’s in HR, we kept reading and talking about how HR

needs to position itself as a strategic business partner; but I didn’t think I

would get the opportunity so soon in my career.” Lori had been the director

of Human Resources with Reyes Fitness Centers, Inc. (R FC) for only a couple

of months. She had been attracted to the position in part because it offered her

first opportunity to oversee all of HR, and because of her interview with Mike

Lowe. Lowe was fairly new to the company (just less than two years) and was

highly regarded by the founder and chairman, John Reyes, and the rest of the

board of directors as a strategic thinker and someone with proven ability to

inspire and motivate staff. Lori knew from the interview with Lowe that when

he said employees were the key to RFC’s future, he meant it.

RFC background

Reyes Fitness Centers, Inc. was launched in May of 1999 by John Reyes with

$150,000 of his own funding and some investment capital from three college

friends from the University of North Carolina, Chapel Hill, where they were

business majors attending the university in the mid-1990s. The first center

was located in Raleigh, NC, and was an immediate success. The center offered

a full range of workout equipment, exercise classes, personal trainers, an

outdoor pool, on-site daycare, and even a small restaurant. Additional private

investment was secured and R FC expanded rapidly from 1999 to 2007, opening

approximately three new centers a year throughout the Southeast. By the end of

2007, RFC operated 28 fitness centers, grossing $51 million in revenues and $1

million in net income. Figure 1.0 below provides the financial performance of

RFC and its comparison to competitors.

By 2005, John Reyes had general managers overseeing each center and had

gradually removed himself from day-to-day oversight of the company. He

had become interested in other business ventures and, as a result, his board

encouraged hiring a CEO and other senior management team members to

oversee the growing enterprise. He hired 48-year-old Mike Lowe as the

new CEO of RFC in late 2005, and Reyes assumed the role of chairman.

This CEO position was the second in Lowe’s career. He had more than 20

years’ experience in the fitness equipment industry; before coming to RFC

he had been the CEO of a smaller fitness center company in California that

had been acquired. Lowe’s transition as CEO had gone quite well in Reyes’,

the board’s and in Lowe’s view. Lowe had been somewhat concerned about

being micromanaged by Reyes, but he was given complete autonomy over

the operations of the company and was expected to involve the board only in

strategic leadership issues

The Fitness center industry

While the fitness center industry grew dramatically in the mid to late 1990s

(more than 20 percent annually), overall industry growth had slowed

considerably, as most towns now had two to three fitness centers within

close proximity.

As shown in Figure 1.0, RFC is considered a medium-sized fitness center

enterprise. While some competitors (Day Spa and Constant Fitness in

particular) continue to focus on large-scale, either through acquisitions of

smaller fitness clubs or by opening new fitness centers, many others (including

RFC) have reduced the number of new clubs being opened.

There is as much emphasis on health and recreation as ever in the U.S. Industry

reports suggest that the outlook for fitness centers in general is quite positive,

although some consolidation may occur because certain markets have been

saturated with too many clubs to remain profitable. However, the market in the

Southeast (where RFC operates) is still growing and market saturation is not

anticipated for at least five years.

Fitness centers hire a variety of professional and support staff. Some focus on

personal training and employ a large number of certified professional trainers

who work with members during club hours (typically 5-6am until 10pm,

although the more body-building oriented gyms have recently started offering

24-hour service). In addition to housekeeping and front desk staff, fitness

centers employ customer service representatives who can assist existing members

with questions and also act as sales representatives, giving tours of the facility to

prospective members.

RFC strategy

During Lowe’s tenure, RFC opened just one new fitness center (just outside

of Atlanta, GA). This modest club expansion is consistent with the three-

year financial strategy the RFC board has agreed on, where the focus is on

growing the profitability of existing clubs by increasing member enrollment and

retention. The company is privately held by a small group of investors and the

board wants it to stay that way. The board has discussed positioning itself for

acquisition by one of the larger fitness club chains at some point in the future. It

is agreed that improving the bottom-line (i.e., net income) performance of RFC

will only help in this regard.

Within Porter’s classic framework of various business strategies, RFC’s strategy

most closely aligns with Porter’s “focus” strategy, where a company focuses

on serving the needs of a particular market segment to achieve a competitive

advantage. RFC has positioned itself as a place where the whole family can

enjoy fitness and social activities. RFC has deliberately chosen not to compete

with gyms that cater to body builders with large free weight workout areas,

24-hour access, onsite training supplement sales, and “no-frills” amenities.

RFC’s strategy is to attract families by offering a wide variety of fitness offerings

including cardio equipment; free weights and circuit training weight machines;

personal training; and exercise classes (such as Pilates, yoga, stationary cycling,

etc.). Most RFC fitness centers have a snack bar where nutritional smoothies

and other healthy snacks can be purchased. All RFC centers offer extensive

locker room facilities and on-site daycare. Newer RFC fitness centers have small

indoor basketball courts and TV lounges to appeal to the 10- to 16-year-old

age group.

From his first day on the job, Lowe has stressed to the staff that he wants them

to be strategic in how they approach their daily, weekly, and annual activities

and projects. By that he means that they should consider how their jobs

contribute to RFC being able to provide a fitness club experience to couples and

families that is superior to any of the competition. He has worked diligently

with his senior management team and the board to understand how RFC

creates value for its customers, employees and investors. The business model

for how fitness centers make money is fairly straightforward: profitable firms

grow by recurring monthly member revenue (via new member recruitment and

existing member renewal) while maintaining relatively stable fixed costs and

low variable costs. Lowe has worked to identify both financial and nonfinancial

variables that drive RFC performance. By locating RFC fitness centers in upper-

middle-class locations and focusing marketing efforts on couples and families,

RFC has been successful recruiting new members. Research data shows that

members typically do not have issues with the RFC monthly dues. Member

feedback indicates that having a friendly place for the whole family to stay fit is a

driver of member value.

RFC Strategic Challenges

As with most start-ups, the early strategy for RFC focused on growing

revenue. They did this by opening several clubs each year and offering new

club promotions to attract members. RFC experienced rapid revenue growth

(more than 20 percent annually) through 2004. However, several of the RFC

centers are not reaching their profit goals. Mike Lowe tried to address this by

implementing operational efficiencies when he first came on board at RFC,

but he soon realized that the profit challenges were driven in large part by a

customer retention problem. While a certain amount of turnover is expected in

the industry (due to competing clubs, families moving out of the area, etc.), the

best industry data RFC can find relating to member retention shows that their

member retention is approximately 20 percent lower than industry average.

An analysis of member records shows that members often join during a special

promotion (where the initiation fee is waived) but then rarely use the center

and fail to renew. A telephone survey of members (lapsed and current) reveals

that “non-use” was one of the reasons for members not renewing or stating

they were unlikely to renew. An analysis of member-visit frequency shows that

more than 50 percent of members in 2006 hadn’t even visited their RFC fitness

center two times per week. The hypothesis is that members who aren’t going

to their RFC fitness center frequently are far less likely to see sufficient value to

renew. Another concern is member feedback that RFC staff members do not

provide very good or excellent customer service. Lowe, senior management, and

the board have had extensive discussions about the member retention problem.

While part of Lowe’s strategy to increase profits is to enroll more members in

existing fitness centers, those profits will be short-lived if members stay only one

year. Data also shows that membership cost, quality of offerings, amenities, etc.,

are all rated highly.

Lori thinks about these strategic issues and how HR might affect them.

“There’s no question that problems with customer service and member

retention come down to people issues. It is affected by the type of people we

bring on board, how they’re trained and how their performance is managed

and rewarded.”

Questions:

1. Identify and prioritize a set of tasks for Lori. Provide a rationale for your prioritization. Link your responses to the key concepts to one of the examples in the The HR Scorecard.

2. Based on your understanding of RFC and its business strategy, how can HR add strategic value to RFC?

3. What challenges do you anticipate Lori will encounter as she develops the HR scorecard for RFC?

4. Anticipate potential outcomes for the plan that is proposed for RFC?

Thanks for your help!

Shroff Company has a defined benefit pension plan. The following data relate to the operation of the plan for 2019.

A. Prepare a pension worksheet and the journal entry to record the pension expense for 2019.

Plan assets (fair value), 1/1 $29,000

Projected benefit obligation, 1/1 35,000

Prior service cost, 1/1 2,600

unrecognized net gain/loss (debit), 1/1 4,800

Service cost 2,500

Actual gain on plan assets 1,500

Amortization of prior service cost 300

Annual contributions 3,400

Benefits paid 2,700

Settlement rate 5%

Expected rate of return 6%

Average service life of employees 10 yrs

B. Suppose plan assets of Shroff Company make about $5,000 more than expected in both 2020 and 2021. How would this affect Shroff’s net income in 2020 and 2021 and why? From this example, what do you think is the main role of the AOCI in the current US pension accounting?