GreenThumbs Pty Ltd (GreenThumbs) operates a wholesale nursery growing and selling garden plants. Suni, Pierre and Rachel are the only shareholders and directors. Suni manages the company's day-to-day operations. Pierre, who left school at 14 and has no tertiary qualifications, is in charge of the nursery.Rachel is a non-executive director who does not take an active part in the management or operations of the company. Until recently, GreenThumbs has been very profitable. However, six months ago, a competing business opened nearby and since then GreenThumbs' profits have dropped considerably. Suni thinks that GreenThumbs should move to larger premises in a different area. Without consulting Pierre or Rachel, Suni starts looking for new premises and she decides the first place she inspects is perfect, although the price is more than GreenThumbs can comfortably afford. Suni does not think this will be a problem, because there is no competition nearby and she expects that profits will recover immediately. Suni calls a board meeting and tells Pierre and Rachel that moving will solve all the company's problems and that this property she has seen is absolutely perfect for GreenThumbs. She says they will have to act quickly as there is another interested purchaser. Suni does not tell Pierre and Rachel that she only looked at this one property. Suni is so enthusiastic that both Pierre and Rachel agree to the proposal even though Rachel is doubtful, feeling that they are being rushed into making a decision without being given time to consider other alternatives. Pierre agrees to Suni's proposal without really understanding the financial implications. GreenThumbs purchases the new premises but, because of continuing dry weather, its profits remain low. Rachel is becoming worried about her obligations as a director, especially if GreenThumbs' financial position deteriorates any further. Required: Advise Rachel about 1) her position in respect of any breaches of her general law or statutory duty of care and diligence as a director; and 2) whether her decision to agree to the purchase of the new premises would be protected by the business judgment rule. Support your advice with reference to relevant sections of the Corporations Act 2001 and to case

I and my husband Jatin have total amount of $150,000 in our savings account. We have 3 school going kids. We want to buy a new home, a new car and keep funds for children higher education.

We finalized to buy a home for $760,000. We may use $120,000 of our savings as a down payment on it. For balance financing the mortgage specialist/agent gave us the following options:

1. Option 1: a 25-year mortgage/loan, with semi-monthly payments (at the end of each period). The interest rate on the mortgage is 3.26% APR (annual percentage rate) compounded semi-annually.

Ques 1. What will the semi-monthly payment be on the Option 1 mortgage?

Please use (display + name) the excel function/ formula used for each yellow cell.

2. Option 2: a monthly payment of $2,900 to be made at the end of each period. The interest rate with this option would be 3.60% APR (annual percentage rate) compounded semi-annually.

Ques 2. How many years will Option 2 mortgage be amortized over? Please use (display + name) the available excel function/ formula in each yellow cell .

Ques 3. To buy a new car of $45,000 (including taxes). In exchange of our old car for $10,000 and $10,000 from our savings as a down payment, the car dealer would provide the $25,000 balance as a 5-year loan paid semi-monthly at 4.8% ANNUAL RATE compounded semi-monthly. What will the payment be on the loan for the car as per below information? Please use (display + name) the excel function/ formula used for each yellow cell.

QUESTION 1

Read the two cases of Barbican Bank and Intermarket of Zimbabwe and answer the questions below:

Barbican Bank (BB)

Barbican Bank was formed in the late 1990s at the height of a rush into the financial services sector by domestic investors. It was born out of an asset management company. The founder
was a flamboyant businessman who was a public figure in the financial services sector. At formation the bank declared its focus would be the elite market. Its products were therefore
targeted specifically at the top market. The bank also declared an intention to operate a very small branch network, no more than five branches. Barbican started experiencing liquidity
problems in early 2003 and was placed under the curator in March 2003. Before being placed under the curator Barbican had been reporting fabulous profits most of them having come
from non interest transactions. According to the Central Bank, Barbican ‘‘was experiencing serious liquidity problems as a result of imprudent banking behaviours. There was no clear separation between various related entities within the group which led to cross funding of operations and excessive risk taking among other shortcomings.’’ The Central Bank also noted
that the bank was involved in ‘‘questionable cross-border foreign exchange activities.’’ The bank had shifted funds to South Africa from local operations with the object of establishing a
new company in South Africa. During its operation the bank introduced the derivatives (junk bonds) market, which had been non-existent in the country’s financial sector. When liquidity
problems besieged Barbican the Central Bank placed the banking division under the curator and the asset management company under liquidation. At the time of taking these measures
the Central Bank had injected money into the bank as liquidity support but the bank appeared to be on a serious slide. The bank has since failed to repay on time the loan from the Central
bank’s Troubled Bank Fund. On seeing his financial companies in difficulties, the Chief Executive (the founder) skipped the country. Despite problems in the home operations, the
founding chief executive was trying to set up another financial services company in South Africa. During his tenure the Chief Executive is said to have been so dominant the board
appeared clueless and powerless to restrain him. The bank has now been placed into liquidation by the Central Bank. It will be amalgamated into a merger of liquidated banks to form a new bank.

Intermarket (IM)

The founder established Intermarket Holdings during the late 1990s through acquisitions. At the time of inset of financial distress, the founder owned 72 percent of Intermarket Holdings
through an investment company called Transnational Holdings. Transnational Holdings comprised companies in banking and insurance among others. Its influence in the financial
services sector was in every sphere. Intermarket Banking Corporation one of the subsidiaries of the holding company started showing signs of liquidity problems in early 2004. This was
during the period of a cash crisis in the country. Much as all banking institutions were affected by the cash crisis, Intermarket appeared completely outstretched by the crisis. In March 2004
the bank was placed under the management of a curator by the Central Bank when it appeared it could not pay its creditors and depositors on demand. On investigation, the Central Bank
discovered that the Executive Chairman had loaned himself Z$90 billion of depositors’ money and the insider loans were not being serviced. The Executive Chairman was said to have been so dominant he had the veto power on everything that took place in the corporation. Investigations by the appointed curator have led to a rise in the figure for insider loans to
Z$174 billion. The Executive chairman fled the country when authorities appeared to point at him as the main contributor to financial distress in the institution. Intermarket has been trying
to enter into partnership with other banking institutions, in order to shore up its capital, without much success. Instead Finhold, another Zimbabwean financial institution whose banking
subsidiary is owed Z$100 billion is positioning itself to take over major shareholding in Intermarket Bank through a combination of cash and debt swap. Finhold’s strategy is an
attempt to protect possible collapse of Intermarket since it is a major creditor. Intermarket has to raise its capital base to Z$10 billion before 30 September 2004 as per regulatory authority
requirements. Fraud by some IM employees taking advantage of weak management systems has exacerbated financial distress in Intermarket. The curator has however opened the banking division for limited services to depositors.

Questions:

a) The liquidity problems experience by Barbican Bank and Intermarket bank were as a result of poor risk management. Discuss?

b) Identify the speculative risk that was taken by Barbican Bank?

c) Lack of board independence inadvertently creates an epicentre for corporate governance failures. Discuss using the two cases and outline the ideal role of a board in corporate governance and risk management

India’s Transformation After gaining independence from Britain in 1947, India adopted a democratic system of government. The economic system that developed in India after 1947 was a mixed economy characterized by a large number of state-owned enterprises, centralized planning, and subsidies. This system constrained the growth of the private sector. Private companies could expand only with government permission. It could take years to get permission to diversify into a new product. Much of heavy industry, such as auto, chemical, and steel production, was reserved for state-owned enterprises. Production quotas and high tariffs on imports also stunted the development of a healthy private sector, as did labor laws that made it difficult to fire employees. By the early 1990s, it was clear that this system was incapable of delivering the kind of economic progress that many Southeastern Asian nations had started to enjoy. In 1994, India’s economy was still smaller than Belgium’s, despite having a population of 950 million. Its GDP per capita was a paltry $310; less than half the population could read; only 6 million had access to telephones; only 14 percent had access to clean sanitation; the World Bank estimated that some 40 percent of the world’s desperately poor lived in India; and only 2.3 percent of the population had a household income in excess of $2,484. The lack of progress led the government to embark on an ambitious economic reform program. Starting in 1991, much of the industrial licensing system was dismantled, and several areas once closed to the private sector were opened, including electricity generation, parts of the oil industry, steelmaking, air transport, and some areas of the telecommunications industry. Investment by foreign enterprises— formerly allowed only grudgingly and subject to arbitrary ceilings, was suddenly welcomed. Approval was made automatic for foreign equity stakes of up to 51 percent in an Indian enterprise, and 100 percent foreign ownership was allowed under certain circumstances. Raw materials and many industrial goods could be freely imported and the maximum tariff that could be levied on imports was reduced from 400 percent to 65 percent. The top income tax rate was also reduced, and corporate tax fell from 57.5 percent to 46 percent in 1994, and then to 35 percent in 1997. The government also announced plans to start privatizing India’s state-owned businesses, some 40 percent of which were losing money in the early 1990s. Judged by some measures, the response to these economic reforms has been impressive. The economy expanded at an annual rate of about 6.3 percent from 1994 to 2004, and then accelerated to 9 percent per annum during 2005–2008. Foreign investment, a key indicator of how attractive foreign companies thought the Indian economy was, jumped from $150 million in 1991 to $36.7 billion in 2008. Some economic sectors have done particularly well, such as the information technology sector where India has emerged as a vibrant global center for software development with sales of $50 billion in 2007 (about 5.4 percent of GDP) up from just $150 million in 1990. In pharmaceuticals too, Indian companies are emerging as credible players on the global marketplace, primarily by selling low-cost, generic versions of drugs that have come off patent in the developed world. However, the country still has a long way to go. Attempts to further reduce import tariffs have been stalled by political opposition from employers, employees, and politicians, who fear that if barriers come down, a flood of inexpensive Chinese products will enter India. The privatization program continues to hit speed bumps—the latest in September 2003 when the Indian Supreme Court ruled that the government could not privatize two state-owned oil companies without explicit approval from the parliament. State owned firms still account for 38 percent of national output in the nonfarm sector, yet India’s private firms are 30–40 percent more productive than their state-owned enterprises. There has also been strong resistance to reforming many of India’s laws that make it difficult for private business to operate efficiently. For example, labor laws make it almost impossible for firms with more than 100 employees to fire workers, creating a disincentive for entrepreneurs to grow their enterprises beyond 100 employees. Other laws mandate that certain products can be manufactured only by small companies, effectively making it impossible for companies in these industries to attain the scale required to compete internationally.

Case Discussion Questions in one page :

1. What kind of economic system did India operate under during 1947 to 1990? What kind of system is it moving toward today? What are the impediments to completing this transformation?

2. How might widespread public ownership of businesses and extensive government regulations have impacted (1) the efficiency of state and private businesses, and (2) the rate of new business formation in India during the 1947–1990 time frame? How do you think these factors affected the rate of economic growth in India during this time frame?

3. How would privatization, deregulation, and the removal of barriers to foreign direct investment affect the efficiency of business, new business formation, and the rate of economic growth in India during the post-1990 time period?

4. India now has pockets of strengths in key high technology industries such as software and pharmaceuticals. Why do you think India is developing strength in these areas? How might success in these industries help to generate growth in the other sectors of the Indian economy? 5. Given what is now occurring in the Indian economy, do you think the country represents an attractive target for inward investment by foreign multinationals selling consumer products? Why?

Please read the case study , then answer the 4 Questions below

Sharp Market Change in Commodity Prices Take Companies to the Edge: From the Oil Capital of Europe to a Small Mining Town in Australia

A significant and sustained drop in commodity prices in 2015–16 (including a significant fall in the price of crude oil and metal commodities, such as iron ore and steel) had major implications for companies operating in this market (for example, oil and gas, mining and steel production). The extent and prolonged nature of this decline were unexpected, and the consequences for companies has been felt worldwide including the wider commercial ramifications for supply chains, supporting services, towns, cities, regions and national economies. In this short case example, we briefly examine the outfall of this shift for the commercial viability of companies operating in the North Sea as part of the global upstream oil and gas industry, as well as the social and economic problems facing a small rural steel town in South Australia.

Aberdeen, a city, tagged as the oil capital of Europe, has been hit by company contractions, job losses and an overall decline in business activity, which has also had an adverse effect on the wider regional economy of Aberdeenshire and Scotland. The hospitality and service industries, real estate, retail and a wide range of small to medium-sized enterprises (SMEs) have experienced the wider business ramifications of this sharp downward shift in the price of oil. An article in The Guardian headlined ‘Aberdeen feels the sharp chill of tumbling oil prices’ (McKenna, 2015), recounts the massive 75 per cent fall in oil prices during the first quarter of 2015, noting that:

Tax receipts from oil accruing to Scotland between January and March (2015) were £168m, down from the £742m gathered in the final quarter of 2014. And nowhere is the economic wind-chill factor being more sharply felt than in Aberdeen. Amid tens of thousands of job layoffs … the previously unthinkable has happened. Once it was almost impossible to secure a room in a decent hotel for less than £100 a night and the airport, the business gateway to the city thrummed with commerce and workers. Now both these barometers of Aberdeen’s once bountiful economy have seen pronounced drop-offs. (Ibid.).

The importance of this decline in oil prices for Scotland and tax revenue has stimulated a broader debate among key stakeholders and politicians both within Scotland and the UK. Over 18 months the price of a barrel of oil has declined from US$115 to around US$25 in January 2016 (Bawden, 2016). New technologies and techniques have enabled an increase in US fracking which combined with a fall in demand from major economies, such as China and the rising supply of oil from countries like Russia, Venezuela, Qatar and Saudi Arabia had all contributed to this extraordinary decline. Although fluctuations in prices are to be expected and whilst there was a significant crisis in oil back in 1999, the extent of the fall and the potential long-term implications of this shift came as a shock to major operators in the North Sea and the regional economy of Aberdeenshire. But was there anything that could have been done to prevent the severity of this downturn and the wider implications for business within the region?

We now briefly turn our attention from the oil capital of Europe to a small town in Australia. Both have been badly hit by a sharp decline in commodity prices and whilst the comparison is something of a David (small town) and Goliath (oil capital) the issues and concerns are remarkably similar. Whyalla’s Arrium steelworks are facing difficult times in a declining market that is described as an ‘economy transitioning away from the resources boom’ (Griffiths, 2016: 25). Arrium has cut 300 jobs and cut operating expenses by AUS$100 million. It needs to reduce its operating costs by a further AUS$60 million in order to keep its OneSteel Whyalla operations going. The steelworks employs 1150 OneSteel workers, and 450 contractors and the State government has waived royalties on the iron-ore use at the steelworks and is looking at other support options including underwriting some company costs and investment in upgrades (Cook, 2016: 35). The decline in jobs and the contraction of Whyalla’s steelworks have impacted on local town business, such as the café, fashion store, real estate agents and butcher as well as local companies. Martelco Hire, who provided plant and equipment to the mining and construction industries, has as a result of this decline gone into liquidation (February 2016) with a debt exceeding AUS$1 million. As a journalist commented: ‘As Whyalla’s lifeblood, the Arrium steelworks faces a possible shutdown, the small-business owners of the shopping strip of Paterson St are confronted with a domino effect that could also close their doors’ (Cook, 2016: 34). In response, the South Australian government have mandated that Australian grade steel is procured for public projects, whilst other governments, such as those of Western Australia and Queensland, continue to use cheap Chinese imports. As Griffiths explains: ‘Whilst South Australia’s policy does not preclude overseas producers from tendering for projects, the Australian grade consideration will ultimately see demand for local steel increase’ (2016: 25). At the time of writing, the Advertiser reported that: ‘Arrium needs to find another $60 million in savings to ensure its Whyalla steel and mining operations continue and to save 3,000 jobs due to the downturn in iron ore and steel prices’ (Templeton, 2016: 9).

These two short examples illustrate not only the wider ripple effects of sudden shifts in the price commodities on local and regional economies but also the role of government and other stakeholders in seeking to prevent a major economic downturn. Although change is ongoing and unforeseen shifts and fluctuations in markets are not uncommon when major upheavals occur, such as the ones reported here or the more extensive Global Financial Crisis (GFC) of 2007–08, many people are taken unawares. It is often only in retrospect that these rapid, unexpected shifts are explained and made sense of. As we shall see, it is in the nature of change that the future is ultimately unknowable, even though we develop techniques and models to try to control for a future that is not yet known. In reflecting on these two short case vignettes and drawing on your own knowledge of what has occurred since the writing of this examples, consider the questions below not only with respect to these specific scenarios but in relation to your own experiences of how unexpected changes in the economy and society have impacted upon you.

Questions

1. Was there anything that could have (or should have) been done to lessen the impact of this sharp fall in commodity prices?
2. As an advisor to government, what responses and actions would you recommend be taken as a consequence of these unforeseen events?
3. Compare and contrast Aberdeen with Whyalla and list the similarities and differences. Once you have completed this, try to think of a strategy for change for re-invigorating the local and regional economies in Scotland and Australia.
4. Identify and explain any lessons that can be learned from our two case examples.

Ben Bates graduated from college six years ago with a finance undergraduate degree. Although he is satisfied with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to achieve this goal. After examining schools, he has narrowed his choice to either Wilton University or Mount Perry College. Although internships are encouraged by both schools, to get class credit for internship, no salary can be paid. Other than internships, neither school will allow his students to work while enrolled in its MBA program. Ben currently works at the money management firm of Dewey and Louis. His annual salary at the firm is $50,000 per year, and his salary is expected to increase 3 percent per year until retirement. He is currently 28 years old and expected to work for 35 more years. His current job includes a fully paid health insurance plan, and his currently average tax rate is 26 percent. Ben has a savings account with enough money to cover the entire cost of his MBA program. The Ritter College of Business at Wilton University is one of the top MBA programs in the country. The MBA degree requires two years of full-time enrollment at the University. The annual tuition is $60,000, payable at the beginning of each school year. Books and other supplies are estimated to cost $2,500 per year. Ben expects that after graduation from Wilton, he will receive a job offer for about $95,000 per year, with a $15,000 signing bonus. The salary at this job will increase 4 percent per year. Because of the higher salary, his average tax rate will increase to 31 percent. The Bradley School of Business at Mount Perry College began its MBA 16 years ago. The Bradley School is smaller and less well known than Ritter College. Bradley offer an accelerated , one-year program, with a tuition cost of $75,000 to be paid upon matriculation. Books and other supplies for the program are expected to cost $3,500. Ben thinks that he will receive an offer of $78,000 per year upon graduation, with a $10,000 signing bonus. The salary at this job will increase at 3.5 percent per year. His average tax rate at this level of income will be 29 percent. Both schools offer a health insurance plan that will cost $3,000 per year, payable at the beginning of the year. Ben also estimates that room and board expenses will cost $20,000 per year at either school. The appropriate discount rate is 6.5 percent.

Given the case above, use Excel spreadsheet to analyze problems 3 and 4. Inside the Excel file, also answer questions 1 and 2 in brief discussion.

1. How does Ben's age affect his decision to get an MBA?

2. What other, perhaps nonquantifiable factors affect Ben's decision to get an MBA?

3. Assuming all salaries are paid at the end of each year, what is the best option for Ben-from a strictly financial point?

4. What initial salary would Ben need to receive to make him indifferent between attending Wilton University and staying in his current position?

Please Answer the following regarding probability:

6. A 2011 Gallup poll found that 76% of Americans believe that high achieving high school students should be recruited to become teachers. This poll was based on a random sample of 1002 Americans.

a) Find a 90% confidence interval for the proportion of Americans who would agree with this.

b) Interpret your interval in this context.

Please show all work.

Please typed answers only, no handwriting.

• Discuss the issue of physician shortage in America. Since half of all medical school first year students are women, how would that fact contribute further to a physician shortage in the future? How would a physician shortage be overcome in the health care delivery system? What is the impact or burden on current physician staffing levels given the estimated 30 million additional people being added to a government mandated insurance plan?