Q1. There are ten customers and two cafes A and B. Customers want to purchase from the cafe with fewer customers. A customer’s payoff when purchasing from cafe A is −mA, where mA is the number of customers excluding herself purchasing from A. A customer’s payoff when purchasing from cafe B is −mB, where mB is the number of customers excluding herself purchasing from B. a. Find a pure-strategy Nash equilibrium of this game. Prove that it is a Nash equilib- rium. b. Suppose each player chooses cafe A with probability 1/2 and cafe B with probability 1/2. Show that this is a (mixed-strategy) Nash equilibrium. c. Compare the expected number of customers for each cafe in the pure-strategy and mixed-strategy Nash equilibria. (Remember to show all working)

1. Two types of customers make up the market for Armoyas. There are 100 type A customers, each of whom is willing to pay up to $10 for an Armoya. There are 50 type B customers, each willing to pay up to $8 for an Armoya. No customer wishes to buy more than a single Armoya. The monopolist cannot differentiate between the types of customer. The average and marginal cost of production is constant at $6/Armoya.

a)What is the selling price of the good, and how much profit does the monopolist make?

b) The monopolist is offered the opportunity to advertise Armoyas at a cost of $80. The advertisement is predicted to attract another 100 type B customers. Will the advertisement be placed? What is the selling price of the good, and how much profit does the monopolist make?

c) Suppose the advertisement attracts no new customers, but raises the price all existing customers are willing to pay by $1. Will the advertisement be placed? What is the selling price of the good, and how much profit does the monopolist make?

1. Two types of customers make up the market for Armoyas. There are 80 type A customers, each of whom is willing to pay up to $10 for an Armoya. There are 40 type B customers, each willing to pay up to $8 for an Armoya. No customer wishes to buy more than a single Armoya. The monopolist cannot differentiate between the types of customer. The average and marginal cost of production is constant at $6/Armoya.
   
2. 1. What is the selling price of the good, and how much profit does the monopolist make?
      
   2. The monopolist is offered the opportunity to advertise Armoyas at a cost of $80. The advertisement is predicted to attract another 100 type B customers. Will the advertisement be placed? What is the selling price of the good, and how much profit does the monopolist make?
      
   3. Suppose the advertisement attracts no new customers, but raises the price all existing customers are willing to pay by $1. Will the advertisement be placed? What is the selling price of the good, and how much profit does the monopolist make?

Managers at Gap Inc. formerly one of the top retail chains, are reported to have made a series of decisions that hurt the company: They expanded so rapidly that the chain lost touch with customers; they tried to copy the successful approach of rivals rather than charting their own course; they cut quality to reduce cost; they shifted from one fashion approach to another as each one failed to appeal to customers, and so on. What techniques would you recommend Gap managers use to improve the quality of their decisions

Below are financials for XYX Corporation (in millions $):

The firm's inventory conversion period is 54 days. Its new CFO wants to decrease the cash conversion cycle by 7 days, based on a 365-day year. He believes he can reduce average receivables by $2.9 million without upsetting customers.

1. By how much must the firm increase its average payable to meet its goal of a 7-day reduction in its cash conversion cycle? (6 points)
   

2. If XYZ Corporation does decrease its cash conversion cycle by 7 days by increasing average payables and reducing average receivables, what will be the change in its net operating working capital? The company's inventory remains constant. (2 points)

Below are financials for XYX Corporation (in million $):

The firm's inventory conversion period is 54 days. Its new CFO wants to decrease the cash conversion cycle by 8 days, based on a 365-day year. He believes he can reduce average receivables by $3.2 million without upsetting customers.

a. By how much must the firm increase its average payable to meet its goal of a 8-day reduction in its cash conversion cycle? (6 points)

b. If XYZ Corporation does decrease its cash conversion cycle by 8 days by increasing average payables and reducing average receivables, what will be the change in its net operating working capital? The company's inventory remains constant.  (2 points)

The adjusted 12/31/22 Trial Balance for Sirius Corporation included these accounts and balances. All accounts have a normal balance. No other accounts existed.

1. Determine the total of the Adjusted Trial Balance columns.
2. In proper format, prepare the Sirius Corporation:

• • 2022 Income Statement
  • 2022 Statement of Retained Earnings
  • 12/31/22 Balance Sheet

• Section 2: The Lerxst Company records these journal entries:

  Depreciation	$75
  Accrued Expense	$18
  Earned portion of Unearned Revenue	$95
  Dividends declared but not paid	$25

  Indicate the net effect of these journal entries on the following items. Indicate the dollar amount of the effect and the direction of the effect. (Example: $13 Increase, or $8 Decrease, or No Effect.)

• Net Income
• Total Assets
• Total Liabilities
• Retained Earnings
• Total Equity
• Working Capital

• Section 3:

  The Dirk Company fails to record these journal entries:

  Accrued revenue	$65
  Payment of previously declared dividend	$35
  Expiration of prepaid rent	$28

  Determine the net effect of these errors on the following items. Indicate the dollar amount of the error and the direction of the error. (Example: $17 overstated, or $12 understated, or No Error.)

• Net Income
• Total Liabilities
• Total Assets
• Retained Earnings

Terrific Thai Food Truck wants to know about its waiting line. Currently, they use a single-server, single-phase system when serving customers. Based on historical evidence, the average number of customers arriving per hour is 80 and is described by a Poisson distribution. They estimate that they can serve 130 customers per hour with service times that follow an exponential distribution. Being that TTFT customers have infinite patience and are willing to wait in rain, sleet, and snow for the chance to get the best Thai food in town, we don’t see any balking or reneging. Being that Terrific Thai is located in Louisville, Kentucky… a city with a large population… customers come from an infinite population. The owners would like you to help them solve some thorny operational problems and figure out some system performance measures.

Compute each the following for this queueing system:

1. Average utilization.

2. Average time in the system.

3. Average time in the queue.

4. Average number of people in the system.

5. Average number of people in the queue.

6. The probability of there being more than 3 people in the system.

Exercise 2-28 Schedules of Cost of Goods Manufactured and Sold; Income Statement (LO 2-1, 2-3, 2-6) [The following information applies to the questions displayed below.] Alhambra Aluminum Company, a manufacturer of recyclable soda cans, had the following inventory balances at the beginning and end of 20x1. Inventory Classification January 1, 20x1 December 31, 20x1 Raw material $ 55,000 $ 70,000 Work in process 120,000 115,000 Finished goods 170,000 165,000 During 20x1, the company purchased $240,000 of raw material and spent $400,000 for direct labor. Manufacturing overhead costs were as follows: Indirect material $ 8,000 Indirect labor 27,000 Depreciation on plant and equipment 100,000 Utilities 26,000 Other 30,000 Sales revenue was $1,111,000 for the year. Selling and administrative expenses for the year amounted to $110,000. The firm's tax rate is 40 percent. Exercise 2-28 Part 3 3. Prepare an income statement.

B Excel #1

Proposal #1 would extend trade credit to some customers that previously have been denied credit because they were considered poor risks.   Sales are projected to increase by $120,000 per year if credit is extended to these new customers. Of the new accounts receivable generated, 6% are projected to be uncollectible. Additional collection costs are projected to be 5% of incremental sales, and production and selling costs are projected to be 80% of sales. Your firm expects to pay a total of 30% of its income after expenses in taxes. (Show Work)

1. Compute the incremental income after taxes that would result from these projections:

2. Compute the incremental Return on Sales if these new credit customers are accepted:

If the receivable turnover ratio is expected to be 4 to 1 and no other asset buildup is needed to serve the new customers…

3. Compute the additional investment in Accounts Receivable
4. Compute the incremental Return on New Investment

5. If your company requires a 20% Rate of Return on Investment for all proposals, do the numbers suggest that trade credit should be extended to these new customers? Explain.