No matter what your business, to stay in business you have to attract and retain customers. How do you do that? One way is to deliver a quality product or service in a high-quality manner. In other words, it is a combination of what is offered and how it is offered that determines whether a buyer will become a loyal customer. Training is one way to make sure that employees’ technical skills and customer-service skills meet customer expectations. When making a business decision, two basic elements are typically considered: costs and benefits. In the case of training, the issues are: (1) how much does the training reduce costs? and (2) how much does the training increase revenues? If the training sufficiently reduces costs and/or increases revenues, then there is a strong business case to conduct the training. Your ability to identify the potential sources of revenue and costs and to estimate their levels can be an important business skill. It can be the basis by which you can successfully make the case for needed training for your employees.

1) Given your answers to the previous questions (1. How much does the training reduce cost? and 2) How much does the training increase revenues - no data necessary), estimate the combined impact on the bottom line of direct and indirect savings generated by training. Extrapolate this number over a one- or two-year time period.

2) As you have read, training can increase revenue. The revenue could come from increased quality of the customer experience due to the impact of training. Consider, as an example, the following table of customer survey responses before and after training. The number are percentages of customers in each satisfaction category six months before and six months after employees received their training. A key change is a reduction in the "Very dissatisfied-will never return" category of customers, which fel from 15 to 5 percent.

A) What will this 10-percent change mean to the bottom line? Assume that the avergae revenue renerated per month by a customer is $500. Also assume that you have 500 customers.

B) What is the increased revenue due to the training for the past six months?

C) What would be the revenue generated if you had 1,000 customers?

3)  Make assumptions about the costs in each of these direct cost categories and any other direct costs you can think of. Also assume that you can expect a 10-percent reduction in each of these categories. Generate the direct cost savings estimate due to the training. Training can also impact the bottom line by reducing indirect costs. These are costs that may not be obvious, but that are still important. For example, the safety of work processes or equipment can be improved due to training if workers handle materials or equipment more safely. Employee turnover can also be reduced, because of improved job satisfaction due to the training.

4)Assume that training results in a 10-percent reduction in your turnover rate. Also, assume that the cost of a turnover is 1.5 times the departing employee’s salary. For a given average employee salary of your choosing, estimate the reduced costs due to the reduction in turnover.

This problem is from 2008.

The US Open is an annual two week tennis event in Flushing NY in late August, early September.

In a year with no significant rain interruption, the US Open makes approximately $275 million in revenue and incurs expenses of approximately $225 million, for a profit of $50 million. Of the $275 million in revenue approximately $100 million is from ticket sales. As a non-profit organization, it incurs no tax.

The US Open can work around rain delays but if all play is suspended in either the afternoon or evening sessions, tickets are good for the same session in the following year, in which case the USTA foregoes revenue. The largest ticket prices are for the women’s and men’s finals so a rain-out on either of these days forgoes the most revenue.

The Open is interested in buying a contract to protect itself from foregone revenues from rain interruptions during the finals. Working with its insurance broker, it approaches the insurance market to see if it can buy a weather derivative or insurance policy.

The US Open estimates that between foregone ticket sales and lost margin on concessions and broadcasting rights, a rain out on either the men’s or women’s finals will mean $30 mil in lost profits.

The insurance broker is able to secure an insurance policy that will indemnify the US Open if rainfall occurs during the men’s or women’s finals. The policy treats each event separately, meaning there is coverage and a corresponding premium charged for postponement of either final. The insurer is willing to provide a policy covering each separate event that will indemnify the US Open with a limit of $30 million and a policy premium of $10 million for each. As with all insurance policies, the US Open can collect the insurance payments only once it demonstrates the losses.

The weather desks at three major reinsurance holding companies with broker/dealers supply the probabilities associated with significant rainfall (> ¼ inch) on days 13 and 14 of this calendar year, which is 20% for either day, and conditional on rain on the 13th day, the chance of rain on the 14th day is 30%.

Write out all possible rain/dry possibilities for the 13th and 14th days, with their associated probabilities.

Without insurance, what are the profits if there are rain postponements to either or both finals?

Without insurance, what are the expected profits?

With insurance, what are profits if there are rain postponements?

With insurance what are profits if there is no rain?

What are the expected profits if insurance is purchased?

Should the US Open explore including additional days into the policy?

Over a ten year period, assuming baseline revenue and costs are approximately the same amounts as today, what would the US Open expect to earn (i) in the absence of an insurance policy and (ii) with the insurance policy?

The weather desk is also willing to write two weather derivative contracts, one for day 13 and one for day 14, each with a payout of $30 million and a cost of $12 million. The derivative pays the US Open regardless of whether play is suspended or not. It pays based on measured rainfall within 24 hour period exceeding ¼ of an inch.

What is the best strategy for the US Open to manage its exposure to rain?

Explain.

Without insurance, what are the profits if there are rain postponements to either or both finals?

Without insurance, what are Expected profits?

With insurance, what are profits if there are rain postponements?

With insurance what are profits if there is no rain?

Should the US Open explore including additional days into the policy?

Over a ten year period, assuming baseline revenue and costs are approximately the same amounts as today, what would the US Open expect to earn (i) in the absence of an insurance policy and (ii) with the insurance policy?

What is the best strategy for the US Open to manage its exposure to rain?

This problem is from 2008.

The US Open is an annual two week tennis event in Flushing NY in late August, early September.

In a year with no significant rain interruption, the US Open makes approximately $275 million in revenue and incurs expenses of approximately $225 million, for a profit of $50 million. Of the $275 million in revenue approximately $100 million is from ticket sales. As a non-profit organization, it incurs no tax.

The US Open can work around rain delays but if all play is suspended in either the afternoon or evening sessions, tickets are good for the same session in the following year, in which case the USTA foregoes revenue. The largest ticket prices are for the women’s and men’s finals so a rain-out on either of these days forgoes the most revenue.

The Open is interested in buying a contract to protect itself from foregone revenues from rain interruptions during the finals. Working with its insurance broker, it approaches the insurance market to see if it can buy a weather derivative or insurance policy.

The US Open estimates that between foregone ticket sales and lost margin on concessions and broadcasting rights, a rain out on either the men’s or women’s finals will mean $30 mil in lost profits.

The insurance broker is able to secure an insurance policy that will indemnify the US Open if rainfall occurs during the men’s or women’s finals. The policy treats each event separately, meaning there is coverage and a corresponding premium charged for postponement of either final. The insurer is willing to provide a policy covering each separate event that will indemnify the US Open with a limit of $30 million and a policy premium of $10 million for each. As with all insurance policies, the US Open can collect the insurance payments only once it demonstrates the losses.

The weather desks at three major reinsurance holding companies with broker/dealers supply the probabilities associated with significant rainfall (> ¼ inch) on days 13 and 14 of this calendar year, which is 20% for either day, and conditional on rain on the 13^th day, the chance of rain on the 14^th day is 30%.

1. Write out all possible rain/dry possibilities for the 13^th and 14^th days, with their associated probabilities.
2. Without insurance, what are the profits if there are rain postponements to either or both finals?
3. Without insurance, what are the expected profits?
4. With insurance, what are profits if there are rain postponements?
5. With insurance what are profits if there is no rain?
6. What are the expected profits if insurance is purchased?
7. Should the US Open explore including additional days into the policy?
8. Over a ten year period, assuming baseline revenue and costs are approximately the same amounts as today, what would the US Open expect to earn (i) in the absence of an insurance policy and (ii) with the insurance policy?

The weather desk is also willing to write two weather derivative contracts, one for day 13 and one for day 14, each with a payout of $30 million and a cost of $12 million. The derivative pays the US Open regardless of whether play is suspended or not. It pays based on measured rainfall within 24 hour period exceeding ¼ of an inch.

1. What is the best strategy for the US Open to manage its exposure to rain?

Explain.

1. Without insurance, what are the profits if there are rain postponements to either or both finals?
2. Without insurance, what are Expected profits?

3. With insurance, what are profits if there are rain postponements?
4. With insurance what are profits if there is no rain?

5. Should the US Open explore including additional days into the policy?

6. Over a ten year period, assuming baseline revenue and costs are approximately the same amounts as today, what would the US Open expect to earn (i) in the absence of an insurance policy and (ii) with the insurance policy?
7. What is the best strategy for the US Open to manage its exposure to rain?

please make sure the second part is answer.  

Explain how you would calculate the economic value created by the USPS, taking into account the positive externalities it produces.

Here's a few comments: The USPS has had $45 billion or so in cumulative accounting losses over the past four decades or so (see its financials). Was what the USPS produced over the past four decades worth $45 billion to the taxpayers? Take a for-profit business like FedEx. We know the value of the company’s inputs; that’s easy, we can look at their expenses. Now, what is the value of what they produced? Let’s assume for a second that what they produced is a private good with no externalities. Let’s also assume that the value of its services to customers matched or exceeded the amount its customers paid for its services. This is a reasonable assumption, because if it weren’t the case, customers wouldn’t voluntarily engage in transactions with the company. So, what is the value of what FedEx produced? In this case, it would be its revenue plus the difference between what customers paid for Fedex’s services and the value they placed on those services. This difference is called consumer surplus. So the value of what FedEx produced in a given year would be its revenue plus the consumer surplus it generated. To see if they created any economic value, you would subtract expenses from this total.

Bonus questions: Where does profit enter this equation? Note the following: (Revenue + Consumer Surplus) - Expenses = (Revenue - Expenses) + Consumer Surplus = Profit/Loss + Consumer Surplus = Economic Value Created. Why isn't profit/loss, by itself, enough to determine if economic value has been created? Why isn't profit/loss enough to determine if an organization is "efficient" or not?

For example, assuming that everything stays the same with respect to its operations and its volume of business, how FedEx prices its goods and services doesn’t change the amount of economic value it creates. If FedEx raises its prices (and its volume of business stays the same), it may increase its profits, but it would reduce consumer surplus by the same amount, so it would be a wash. What if FedEx lowered its prices below its costs? It would lose money, but the decline in revenue would be offset by a corresponding increase in consumer surplus, so the economic value created by the company would, again, remain the same. In this example, assuming the volume of business stays the same, FedEx’s pricing decisions affect the allocation of value—i.e. how the value created by the company is split between itself and its customers—but it doesn’t effect the overall amount of value the company creates.

The USPS doesn’t produce a private good, like we assumed in the case of FedEx. What it produces is a merit good, defined as a good or service that has both private benefit and associated positive externalities. This adds another layer of complexity to a strategic assessment of the USPS.

The following were selected from among the transactions completed during the current year by Danix Co., an appliance wholesale company:

Required:

Journalize the entries to record the transactions. Assume 360 days in a year. For a compound entry, if an amount box does not require an entry, leave it blank. Assume this is a year in which February has 28 days.

1. The perfectly competitive firm's demand curve is horizontal at the market price.

2. In perfect competition, the market price is established at the intersection of the market demand and market supply curves in the industry and the individual firms are "price takers" of that market price.

3. The perfectly competitive firm will continue to produce in the "short-run" if the price in the market is below their average total cost but above their average variable cost.

4. The theory of the perfect competitive firm provides a complete and accurate description of most real world firms existing today.

5. If a firm is earning ECONOMIC PROFIT, they must be producing at an output level where the price is above their average total cost.

6. We can be sure that the perfectly competitive firm, producing an output level where "price = marginal cost" is earning a normal profit, even in the short-run.

7. Public franchises, patents, and copyright laws are examples of legal barriers to entry in monopoly models and are the source of monopoly power.

8. In general, monopoly may exist because one firm has the exclusive ownership of a scarce resource such as bauxite, an essential element in the production of aluminum.

9. The monopolist is a "price maker" and must lower price to sell an additional unit of its product.

10. In monopoly theory, a price maker is a person who actively seeks out the best price for a product that he or she wisher to buy.

11. As a price maker, a rational monopolist can charge whatever price it wants to charge and sell the same amount by virtue of it's monopoly power and position.

12. A monopolist is always assured of positive economic profits given its control over price.

13. For the monopolist, the marginal revenue curve lies above their demand curve in graphic illustration of their cost and revenue structure.

14. The monopolist faces a "horizontal" demand curve.

15. The monopolist can sell all it can produce at the market established price.

16. The marginal revenue curve of the monopolist lies below its demand curve.

17. The monopolist, by definition, is a "price taker."

18. In theory of monopoly, the monopoly firm is the industry.

19. To maximize profits, a single-price monopolist will produce where Marginal costs = Marginal revenue: establishing a price that is greater than their marginal cost.

20. As a consequence of the perfectly competitive firm producing the quantity of output at which: price equals marginal revenue and marginal cost, it will  achieve "allocative efficiency" in the deployment of societies scarce resources.

Assignment Requirements

Please complete all parts in a Microsoft Word document.

The body of your document should be at least 900 words in length.

Quoting should be less than 10% of the entire paper. Paraphrasing is necessary.

Students must cite and reference at least 4 credible sources from the Library.

Instructions

Imagine that you are an administrator for a large hospital. As part of your role within healthcare leadership, you are involved in several committees for the organization. For this Assignment you are requesting funding from the Board of Directors for an investment of a new electronic health record (EHR) system. Create one summary, on a Word document, which delivers each of the 4 parts of this assignment. When combined this summary should fully support your funding request, by analyzing the impact a new EHR would have on the hospitals revenue and reimbursement, on data collection, operations, and relationships both internal and external.

The following income statement items appeared on the adjusted trial balance of XYZ Corporation for the year ended December 31, 2021 ($ in 000s): sales revenue, $22,300; dividend revenue from investments, $200; interest revenue $150; cost of goods sold, $14,500; selling expense, $2,300; general and administrative expense, $1,200; interest expense, $300. Income taxes have not yet been accrued. The company's income tax rate is 20% on all items of income or loss. These revenue and expense items appear in the company's income statement every year. The company's controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2021 ($ in 000s). All transactions are material in amount.

1. Investments were sold during the year at a loss of $300. XYZ also had an unrealized gain of $200 for the year on investments. The unrealized gain represents a increase in the fair value of debt securities and is classified as part of other comprehensive income.

2. One of the company's factories was closed during the year. Restructuring costs incurred were $1,000.

3. During the year, XYZ completed the sale of one of its operating divisions that qualifies as a component of the entity according to GAAP regarding discontinued operations. The division had incurred operating income of $500 in 2021 prior to the sale, and its assets were sold at a gain of $ 400.

4. A negative foreign currency translation adjustment for the year totaled $300.

5. Amortization expense was understated by $60 in 2020.

6. The Corporation incurred $100 in research and development costs during 2021.

7. Inventory that had cost $80 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $10.

8. Retained earnings 12/31/20 is $400.

9. One million shares of common stock were outstanding as of 12/31/20. The following additional issuances of shares occurred during 2021: a.) 4/1/21 issued 50,000 shares and b.) 7/1/21 issued 40,000 shares

10., The Corporations declared and paid $100 of preferred dividends and declared $100 (of which $25 will be paid January 15, 2022) of common dividends.

Required:

Based on the all of the information provided, answer the following questions as they would appear in a single, continuous multiple-step statement of comprehensive income for 2021. Round all numbers excepts earnings per share to whole numbers. (each 2 points)

Select and copy sections 1-13 below to answer in the space provided

Gross profit ________________

Total operating expenses ________________

Operating income ________________

Total other revenue/(expense) _______________

Income before Tax ________________

Income tax expense ________________

Income from continuing operations (IFCO) ________________

Discontinued operations ________________

Net income ________________

Other comprehensive income ________________

Comprehensive income ________________

Earnings per share (IFCO only) ________________

Retained earnings 12/31/21 ________________

The following income statement items appeared on the adjusted trial balance of ABC Corporation for the year ended December 31, 2021 ($ in 000s): sales revenue, $22,300; dividend revenue from investments, $200; interest revenue $150; cost of goods sold, $14,500; selling expense, $2,300; general and administrative expense, $1,200; interest expense, $300. Income taxes have not yet been accrued. The company's income tax rate is 20% on all items of income or loss. These revenue and expense items appear in the company's income statement every year. The company's controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2021 ($ in 000s). All transactions are material in amount.

1.   Investments were sold during the year at a loss of $300. ABC also had an unrealized gain of $200 for the year on investments. The unrealized gain represents a increase in the fair value of debt securities and is classified as part of other comprehensive income.

2.   One of the company's factories was closed during the year. Restructuring costs incurred were $1,000.

3.   During the year, ABC completed the sale of one of its operating divisions that qualifies as a component of the entity according to GAAP regarding discontinued operations. The division had incurred operating income of $500 in 2021 prior to the sale, and its assets were sold at a gain of $ 400.

4.   A negative foreign currency translation adjustment for the year totaled $300.

5.   Amortization expense was understated by $60 in 2020.

6. The Corporation incurred $100 in research and development costs during 2021.

7. Inventory that had cost $80 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $10.

8.  Retained earnings 12/31/20 is $400.

9. One million shares of common stock were outstanding as of 12/31/20. The following additional issuances of shares occurred during 2021: a.) 4/1/21  issued 50,000 shares and b.) 7/1/21 issued 40,000 shares

10., The Corporations declared and paid $100 of preferred dividends and declared $100 (of which $25 will be paid January 15, 2022) of common dividends.

Based on the all of the information provided, answer the following questions as they would appear in a single, continuous multiple-step statement of comprehensive income for 2021. Round all numbers excepts earnings per share to whole numbers.

1. Gross profit                                                  ________________
2. Total operating expenses                             ________________
3. Operating income                                         ________________
4. Total other revenue/(expense)                      _______________
5. Income before Tax                                       ________________
6. Income tax expense                                      ________________
7. Income from continuing operations (IFCO)   ________________
8. Discontinued operations                              ________________
9. Net income                                                   ________________
10. Other comprehensive income                      ________________
11. Comprehensive income                               ________________
12. Earnings per share (IFCO only)                   ________________
13. Retained earnings 12/31/21                         ________________

Thank you!