Case Study II

Beckett Organics

John Beckett enjoys vegetables, so much so that he has given up his full-time job as a lawyer to concentrate on growing and marketing organic vegetables. He started growing vegetables 20 years ago in his back garden and eventually became fully self-sufficient in supplying vegetables for the family. Partly bored with his legal job and tempted by an attractive severance package, John decided he would try to establish his own vegetable supply business. Eighteen months ago he looked around for two fields to lease in which he could grow organic vegetables.

Organic products including vegetables, is a growth market in the UK. Growers must adhere to strict guidelines in order to gain organic certification. Increasing awareness of the problems associated with many pesticides and fertilizers, coupled with an increased interest in healthy eating habits and ‘wholesome’ food, has meant that many consumers are now either purchasing or interested in purchasing organic vegetables. This is true not only of household customers, but in addition, many restaurants are using the lure of organic produce to give them a distinctive edge in the market place.

All this has meant that many of the larger supermarkets in the UK have begun to stock more and more organic produce from what was a relatively specialized market in the 1990s; the market has grown to where overall organic produce accounts for some 12% of the total UK grocery market and in worldwide terms as of January 2010 it accounts for approximately 3% of all food sales. The market for organic vegetables has grown more rapidly than other organic products and it is estimated that by 2014 some 25% of all vegetables marketed in the UK will be organic. This growth has been sustained at a rate of around 20% per year in developed countries. However, organic yields are between 10% and 20% lower than conventional agriculture, with crops like potatoes some 40% lower. Unsurprisingly, this makes organic produce on average around 40% more expensive than non-organic produce.

A.C.Nielsen Co. cite the case of the United States where organic sales eased in the second half of 2009 as middle- and upper-income families have felt the strain of layoffs and declining investment portfolios. Sales in December 2009 were up 5.6 percent, year on year, against a 25.6 percent rise a year earlier.

Organic vegetables offer several advantages over their non-organic counterparts:

• They are generally tastier, and because they are not treated in the same way, are usually fresher than nonorganic products.
• They are good for a healthy lifestyle as they contain no pesticides and chemicals.
• The fact that no pesticides or herbicides are used in their production means that they are much ‘greener’. For example, they help to reduce the problems associated with nitrates in the soil and water supplies.
• On the downside, organic vegetables are generally less uniform, and as far as some consumers are concerned, are less attractive in appearance. This lack of uniformity has also been a problem in the past with supermarket buyers who have traditionally looked for uniformity in fresh products to aid merchandising and marketing in retail outlets.

• Generally, organic vegetables are more expensive than their non-organic counterparts. Currently, on average they are somewhere in the region of 40% more expensive.

In the UK, anyone wishing to claim that their produce is organic, and market it in this way, needs to obtain the approval of the Soil Association, which checks the organic credentials of a supplier. For example in this case, they check the conditions under which the produce is grown and how the seeds used.

Two interesting developments are taking place in the organic produce market. One is the growth of home supplies. This is where the producer supplies direct to the householder. There are a variety of ways of doing this. Some smaller growers use mail-shots and leafleting to build up a client base. They then deliver locally to customers who order from a list. Very often the supplier will simply make up a box of a pre-determined value or weight containing a selection of vegetables which are in season and ready for picking. Other suppliers are using a similar system, but take their orders via the Internet. This is particularly suitable for this type of product as customers can check on a regular basis what is available and order from home. The produce is then delivered at a pre-arranged time.

The second development in the organic produce market is the growth of farmers’ markets. These markets are usually run by local authorities, often on Saturdays or Sundays. Local and other producers attend these markets, paying a small fee for a stall and then sell their produce direct to the consumer. These farmers’ markets partly came about as a result of the frustration felt by many farmers and growers at the way they were being treated by retailers and at the margins they were receiving. In addition, such markets have been successful because consumers feel they are getting fresh produce at lower prices than they might be able to obtain through supermarkets.

Despite the growth in the market for organic vegetables, after 18 months in his business, John is worried. Quite simply, his business has not been as successful as he envisaged it would be, and as a result he is not earning enough to make a living. The real worry is that he is not sure why this is the case. His produce, he believes, is as good as anything in the business. He is a very good grower and the land he has leased is perfect for the range of produce he wishes to grow. Starting with organic potatoes he now produces a range of organic vegetables including beans, sprouts, carrots, lettuce and his latest venture organic tomatoes and corn grown in poly-tunnels. Although customers he currently supplies are very loyal to John, indeed many are friends and acquaintances he has known over the years when he grew vegetables in his back garden, there are simply not enough of them.

As a result, his turnover which increased rapidly over the first year of the business has for the last six months has stagnated. He mainly supplies locally and has tried to increase his customer base by taking leaflets out and posting them through letterboxes in the area. He has done this by dividing up the housing areas in a ten mile radius around his growing area and dropping leaflets throughout the area to as many houses as he can cover on a systematic basis. Only some 2% of customers have responded with an order, usually contacting by telephone. These customers seem to come from the middle class areas. He has considered taking a stall at one of the farmers’ markets, the nearest of which is some 40 miles away and operates one day per month, but he realises this would not be enough to reach the turnover levels he requires. He has in the past supplied one or two local restaurants and hotels, but usually only when they have contacted him because they have had a problem with their existing supplier.

He has never followed these up. His growing area is currently too small to supply a major retailer, although he has been approached on an informal basis by the buyer of a voluntary chain of local grocers representing some 40 retail outlets in the county.

John is wondering where he goes from here. He cannot understand why his superior products are not selling well. A friend has suggested that John needs a more strategic approach to marketing. John is not convinced. He feels his business is too small to warrant any kind of marketing, never mind strategic marketing, and he has always felt that a good product should sell itself. He is, however, anxious to grow the business and become a leading organic vegetable supplier.

Questions 3:

What would be the appropriate strategy that you would suggest if this company is to start marketing its products in your home country? Explain with reasons.

Cooperative Research Ethics Review Boards: A Win-Win Solution?

Enhancing public participation in research is one of the central challenges facing the clinical research enterprise in the United States, and one of its highest priorities.^[1] Public concern about the safety of participating in research is increasing, reflected in a rising tide of litigation, negative articles in the popular press, and other published commentaries.^[2] Part of this concern focuses on Research Ethics Review Boards (Research ERBs)the entities responsible for ethical review and oversight of human research. These bodies, referred to in federal regulations as Institutional Review Boards (IRBs), are overburdened and often characterized as inefficient and ineffective.^[3] The increasing number of multi-center studies is exacerbating current problems, as they often require duplicative reviews.^[4] Multiple submissions of a single protocol and its associated consent documents to several Research ERBs for review and alterations create redundancy without necessarily enhancing the protection of research subjects.^[5]

Many parties, including the Institute of Medicine (IOM), the National Bioethics Advisory Commission (NBAC), and the Department of Health and Human Services (DHHS), note that these duplicative reviews can actually detract from subject protections by diverting time and resources from more effective uses; they have suggested streamlining review through the use of alternative models.^[6] Collaborative approaches to ethical review that capture the best of both central and local processes could be more efficient, less costly and less demanding of limited resources, and also be more effective. They may allow for more timely data collection and analysis of adverse events, address the problem of institutional conflict of interest, and offer more options for unaffiliated investigators and patients with rare diseases.^[7]

Central review boards have taken on increasing importance in recent years. Reference to a "central IRB" does not necessarily mean that one Research ERB is always the IRB of record; use of the term "cooperative review" may more accurately reflect the emerging approaches discussed in this article. In a survey by the Association of American Medical Colleges (AAMC) of research deans at institutions using a Central IRB (defined as any noninstitutional board or cooperative arrangement), 53% agreed that its use shortened time to approval of research protocols. Eighty-four percent were pleased with the Central IRB review, and 77% indicated that they were able to maintain excellent local oversight of studies approved by a Central IRB.^[8] Notably, some highly respected academic institutions have turned to well-established commercial review boards after deficiencies in their local boards and processes resulted in significant enforcement actions by federal regulatory agencies. One of these private boards was among the first human research protection programs (HRPP) to receive full accreditation by the Association for Accreditation of Human Research Protection Programs (AAHRPP); the Partnership for Human Research Protection (PHRP) also has accredited independent review boards.

Many institutions are hesitant to use cooperative review mechanisms for a variety of reasons. According to the AAMC survey, those who have not used Central IRBs (76% of respondents) did not do so because of concerns about liability (73%), additional costs (60%), the absence of local representation (86%), and the inability to assess the quality of the services (56%). Federal regulations require that research review boards have "sensitivity to such issues as community attitudes,"^[9]and many institutions feel that local review is an essential component of ethical research; to what extent this view also reflects a desire to maintain institutional autonomy is unknown. Both the Office for Human Research Protections (OHRP) and the Food and Drug Administration (FDA) have responded to the increasing number of multi-center trials by clarifying that existing regulations permit institutions to use joint review, rely on another qualified IRB, or make similar arrangements to avoid duplication of effort for cooperative research.^[10] OHRP and FDA also have issued further guidance that clarifies the implementation of such arrangements to ensure that the local context is taken into account.^[11]

Already, some academic organizations and the National Cancer Institute (NCI) are utilizing cooperative models to streamline the Research ERB review process. To explore the potential of these emerging ethical review mechanisms, the Clinical Research Roundtable of the IOM recently convened stakeholders in the clinical research enterprise to hear from those involved in these efforts.^[12] In this paper, we describe several models of cooperative review, many of which were presented at the meeting. These models include the Multicenter Academic Clinical Research Organization (MACRO), the Biomedical Research Alliance of New York (BRANY), independent Research ERBs, the NCI's Central IRB, and Regional Ethics Organizations (REOs). Many of these models are in the formative stages, and REOs, which are now utilized in the United Kingdom, do not exist in the U.S. at this time.^[13] Therefore, key evaluative data regarding existing central review mechanisms are not presently available; indeed, more data are needed to assess both traditional and cooperative review mechanisms and to more fully and scientifically compare these options. Our assessment is based upon the best available data about these efforts. Key issues about centralized review relate to perceived legal liability by cooperating academic institutions regarding the ability to fully reflect and address local concerns.

Australia is a great place to live, but it is also a land of high taxes. In 2002, individual citizens and residents of Australia paid the following income taxes:Taxable Income (in A%)Tax on This Income$0 -$6,000Nil.$6,001 -$20,00017ȼfor each $1 over $6,000$20,001 -$50,000$2,380 plus 30ȼfor each $1 over $20,000$50,001 -$60,000$11,380 plus 42ȼfor each $1 over $50,000Over $60,000$15,580 plus 47ȼfor each $1over $60,000In addition, a flat 1.5% Medicare Levy is charged to income. Write a program to calculate how much income tax a person will owe based on this information. The program should accept a total income figure from the user, and calculate the income tax, Medicare Levy, and total tax payable by the individual.Use total income $7000 and $70000 as examples, calculate the medicare levy, income tax, and total tax. Save the output in the word or pdf file.Requirements: 1.You must use an if-elseif-...-else-endconstruct.2.When the program is run the following should appear:This program calculates the taxes for Australia.Enter the person’s total income:(calling the input function)3.Output should be as follows:For an income of $#.## the taxes are:---------------------------------------Medicare Levy => $#.##Income Tax => $#.##---------------------------------------Total Tax => $#.##

1. In addition to U.S. corporations, what government groups compete for funds in the U.S. capital markets?

2. What foreign industry has privatization been most important in?

3. How does foreign investment help the U.S. government?

4. What is a key tax characteristic associated with state and local (municipal) securities?

5. What are three forms of corporate securities discussed in the chapter?

6. Do corporations rely more on external or internal funds as sources of financing?

INSTRUCTIONS: THE OWNER IS IVETTE MARTINEZ AND IS DEDICATED TO GIVING BUSINESS CONSULTATIONS. THE BUSINESS STARTED IN THE MONTH OF OCTOBER OF THE CURRENT YEAR.

1. ANALYZE THE FOLLOWING TRANSACTIONS IN THE TABLE OF THE SIMPLE EQUATION.

2. PREPARE THE TRANSACTIONS IN A JOURNAL.

3. TRANSFER THE TRANSACTIONS TO THE RELEVANT T ACCOUNTS.

4. PREPARE THE TRIAL BALANCE OF THE COMPANY CALLED FREE CONSULTATIONS.

TRANSACTIONS:

1. MARTINEZ INVESTED $60,000 IN HER COMPANY.

2. MADE A LOAN TO BANCO SANTANDER FOR $10,000.

3. PAID $150 FOR THE ELECTRICITY BILL OF THE COMPANY.

4. PAID $500 THE MONTH OF OCTOBER OF THE BANK LOAN

5. GAVE $2,500 FOR SERVICES ON ACCOUNT TO THE CLIENTE MARIA VEGA.

6. PURCHASED A COMPUTER FROM WALMART FOR THE TOTAL OF $2,500 ON ACCOUNT.

7. MARTINEZ WITHDREW $500 FOR PERSONAL USE.

8. RECEIVED $1,500 FOR SERVICES GIVEN.

9. PAID $100 FOR AN ADVERTISEMENT OF THE COMPANY.

10. RECEIVED $500 FROM MARIA VEGA AS A PAYMENT FOR HER ACCOUNT.

CHART OF ACCOUNTS

CASH 1001

ACCOUNTS RECEIVABLE 1002

OFFICE EQUIPMENT 1003

ACCOUNTS PAYABLE 2001

NOTES PAYABLE 2002

MARTINEZ CAPITAL 3001

MARTINEZ DRAWINGS 3002

SERVICE REVENUE 4001

UTILITIES EXPENSE 5001

ADVERTISING EXPENSE 5002

Answer the following question:

Promoters are individuals who form the corporation, and often receive stock in exchange for their efforts.
Ture/False

An advantage of a partnership over a corporation is that an interest in a partnership can be freely traded in the open market.
Ture/False

The state of Delaware offers corporate-friendly laws in order to incentivize companies to incorporate in Delaware
Ture/False

A corporation, like a natural person, is entitled to due process under the law.
Ture/False

If corporate officers do not follow corporate formalities like holding annual meetings or filing reports with the state, those corporate officers could lose the limited liability protection of the corporate form.
Ture/False

A corporation must be headquartered in the same state where it is incorporated.
Ture/False

If a shareholder in a corporation is not able to physically attend an annual meeting in which a vote takes place, the shareholder may designate another person to be their proxy to vote for them at the meeting.
Ture/False

Shareholders in a corporation elect the CEO and key executives of the corporation but not the board of directors.
Ture/False

The Sarbanes-Oxley Act of 2002 was enacted to curb fraudulent accounting practices.
Ture/False

A director of a corporation owes a duty of loyalty and a duty of care to the corporation and its stockholders.
Ture/False

QUESTION

Enron was an American energy company based in Houston, Texas. Enron scandal which was revealed in 2001 has resulted in the dissolution of the Arthur Andersen. Arthur Andersen was one of the Big 5 audit firm at that time. Enron was seen as the biggest audit failure.

World.com was an American telecommunications company. It was the second largest long distance phone company in the US. In 2002 WorldCom submitted the largest bankruptcy filing in the US history. The WorldCom scandal cost 30 000 employees their jobs and cost investors $180 billion. Arthur Andersen was WorldCom's auditor during the five financial quarters in question.

Required:

a)Provide detail explanation of the factors that have affected the incidence of lawsuits against CPA in recent years .                                                                                                                                                                          

b) The Enron and WorldCom bankruptcy was due to accounting fraud. Provide a background research on these two companies and describe the nature of accounting fraud that was committed by the two companies.                     

c) What are the business risks faced by these two companies, and how did those risks increase the likelihood of material misstatements in their financial statements?                                                    

d) A perceived lack of integrity caused irreparable damage to Arthur Andersen. How can you apply the principles learned in this case personally? How are CPA firms different from other professionals?                                                                                                                                                                                                                    

Marlon Inc. has 2 divisions. Each division’s required rate of return is the same as the firm’s which is 15 percent. Planned operating results for 2002 are as follows:

Requirement A:

a) Compute the ROI of both divisions and compare their performances based on ROI. Which division is performing better based on ROI?

b) Compute the Residual Income (RI) of both divisions and compare their       performances based on RI. Which division is performing better based on RI?

Requirement B:

c) Compute the ROI and RI of a new project under consideration by both divisions which would require $50 million in invested capital and would net $9 million in income.

d) Assume both divisions’ managers’ bonuses are tied to their individual division’s ROI. Would the manager of Lagos division accept or reject the project? Would the manager of Enugu division accept or reject the project?. Explain.

e) Repeat (d) but assume that both divisions’ managers’ bonuses are tied to their individual RI.

f) State whether top management wants the project to be accepted or rejected. Explain.

Sachs Brands' defined benefit pension plan specifies annual retirement benefits equal to: 1.3% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2002 and is expected to retire at the end of 2036 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $87,000 at the end of 2016 and the company's actuary projects her salary to be $265,000 at retirement. The actuary's discount rate is 9%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. What is the company's projected benefit obligation at the beginning of 2016 (after 14 years' service) with respect to Davenport? 2. Estimate by the projected benefits approach the portion of Davenport's annual retirement payments attributable to 2016 service. 3. What is the company's service cost for 2016 with respect to Davenport? 4. What is the company's interest cost for 2016 with respect to Davenport? 5. Combine your answers to requirements 1, 3, and 4 to determine the company's projected benefit obligation at the end of 2016 (after 15 years' service) with respect to Davenport.

I don't want explanation , I just want a correct answer, Very quickly.

12- If the slope of the consumption function is equal to one, then
Select one:
a. The multiplier is undefined
b. The multiplier is smaller than one
c. The multiplier is just one
d. The multiplier is larger than one
e. None of the above

11- If the nominal interest rate 8% and expected inflation 5%, the expected real interest rate in year t is approximately
Select one:
a. 5%.
b. 11%.
c. 3%.
d. 8%.
e. 2%.

09- For the Palestinian Economy, the largest component of GDP is
Select one:
a. Government
b. Consumption
c. Net invetsment
d. Gross investment
e. Net exports

08- Euro otes and coins replaced European national currencies in the year
Select one:
a. 1999
b. 1995
c. 1957
d. 2002
e. 2005

07- Based on wage setting behavior, we know that a decrease in the unemployment rate will cause
Select one:
a. an increase in the real wage.
b. a downward shift in the price setting curve
c. no change in the real wage.
d. an upward shift of the WS curve.
e. a reduction in the real wage.