Dora Nyika is a student pursuing a Bachelor’s Degree in Business Studies (BBS) at a certain University in Zambia. Dora will graduate in one year’ time and has applied for a job with an international telecommunication company. As part of the company’s evaluation process, she has been asked to take an examination which covers several time value of money concepts and principles. Dora has been asked to provide answers to the following questions: (a) To draw time lines for: (i) An uneven cash flow stream of K500, -K700, K850 and K200 at the end of years 0 to year 3 (ii) A K50,000 lump sum cash flow at the end of year 3. (iii) An ordinary annuity of K5,000 per year for 3 years (b) How long it will take a sum of money of money (or anything else) to grow to some specified amount. For example, if a company’s production is growing at a rate of 15% per year, how long will it take production to double? Say we want to find out how long it will take us to double our money at an interest rate of 15%. Note: do not use the rule of 72 when answering this question (c) If you want an investment to double in 4 years, what interest rate must it earn? (d) What is the future value of a 5-year ordinary annuity of K2,000 if the appropriate rate of return is 8%? (e) What is the present value of the ordinary annuity? (f) What would be the future and present values if the annuity were an annuity due? Instructions: Answer the above questions on behalf of Dora Nyika and present the work in a report format.

True or False questions

Michael Baker and Michael Gluk were the CEO and CFO of ArthroCare Corporation, a public company. Due to fraud committed by two senior vice presidents of ArthroCare, John Raffle and David Applegate, ArthroCare misstated its earnings in various SEC filings from 2006 to 2008. Pursuant to the clawback provisions of §§ 302 and 304 of Sarbanes-Oxley Act and acting on behalf of ArthroCare, the SEC sought recovery from Baker and Gluk in the amount of cash bonuses, incentives, and equity-based compensation that Baker and Gluk earned during the affected periods. The SEC argued that Baker and Gluk were liable because they were the CEO and CFO at the time and thus signed the filings that required restatements. Baker and Gluk argued that they did not commit any conscious wrongdoing, did not themselves commit any violation of securities law, and should not be required to disgorge their compensation.

Problem 8-74A Payroll Accounting Jet Enterprises has the following data available for its April 30, 2019, payroll: Wages earned $485,000 * Federal income taxes withheld 92,300 * All subject to Social Security and Medicare matching and withholding of 6.2% and 1.45%, respectively. Federal unemployment taxes of 0.70% and state unemployment taxes of 0.90% are payable on $405,700 of the wages earned. Required: If required, round your answers to the nearest cent. 1. Compute the amounts of taxes payable and the amount of wages that will be paid to employees. Enter amounts as positive numbers. Social Security $ 30,070 Medicare $ 7,033 Federal unemployment $ 2,840 State unemployment $ 3,651 Net pay $ 355,597.50 Feedback 1. Payroll taxes are withheld from employee wages and salaries, and then paid to the taxing authority. Prepare the journal entries to record the wages earned and the payroll taxes. If an amount box does not require an entry, leave it blank. Apr. 30 Wages Expense 485,000 Federal Income Taxes Withholding Payable 92,300 Social Security Taxes Payable

Problem 8-74A
Payroll Accounting

Jet Enterprises has the following data available for its April 30, 2019, payroll:

* All subject to Social Security and Medicare matching and withholding of 6.2% and 1.45%, respectively.

Federal unemployment taxes of 0.70% and state unemployment taxes of 0.90% are payable on $405,700 of the wages earned.

Required:

If required, round your answers to the nearest cent.

1. Compute the amounts of taxes payable and the amount of wages that will be paid to employees. Enter amounts as positive numbers.

Feedback

1. Payroll taxes are withheld from employee wages and salaries, and then paid to the taxing authority.

Prepare the journal entries to record the wages earned and the payroll taxes. If an amount box does not require an entry, leave it blank.

Feedback

1. Payroll taxes are withheld from employee wages and salaries, and then paid to the taxing authority.

2. Conceptual Connection: Jet would like to hire a new employee at a salary of $65,000. Assuming payroll taxes are as described above (with unemployment taxes paid on the first $9,000) and fringe benefits (e.g., health insurance, retirement, etc.) are 25% of gross pay, what will be the total cost of this employee for Jet? Round your answer to two decimal places.
$

Here are some real statistics for various countries in 2003: per capita income vs. per capita recorded music sales:

Country                      Per Cap. Income Per Cap. Music

                                   ($ thousands)             Sales ($)

Norway                      42.4                     55.9

United Kingdom          30.9                     53.35

United States              42.0                     40.43

Australia                     32.9                     33.84

Switzerland                 35.3                     34.40

Finland                       30.6                     26.98

Canada                      32.9                     20.79

United Arab Emirates        29.1                     11.33

Greece                            22.8                     8.10

Israel                               22.3                     6.68

Czech Republic                 18.1                     3.96

South Africa                     12.1                     3.75

South Korea                      20.4                     3.34

Mexico 10.1                     3.30

Egypt                                4.4                   0.15

Indonesia                          3.7                   0.33

4a) Which variable should be considered the dependent (y) variable, and which the independent (x) variable?

4b) According to this model, if a country’s income improves by ^$3,000, how much to you expect music sales to increase by?

4c) What is the correlation coefficient? Is it statistically significant? How strong is this model?

4d) Why do you think the correlation is as high as it is?

4e) If a region of country has a per-capita income of ^$25,000, predict its per-capita music sales.

4f) Looking at the U.S, Canada. & Europe only, delete the United Arab Emirates, South Africa, South Korea Mexico, Egypt, and Indonesia from the model. Answer 3b, 3c, and 3e again.

4g) Why might it have been OK to throw away the countries we did in part f?

Pls answer all parts for Upvote

Sound-Around Turntables (SAT) is a regional manufacturer of high fidelity turntables. It has been in business in Detroit, Michigan since 2008 and has steadily increased sales volume as U.S. sales of vinyl albums re-ignited.

Robert Ritchie, CEO for SAT received an order for 2,500 turntables for Best Buy, a national electronics retailer. Production for this order will begin in late March and the customer order must be delivered on June 1. Since SAT builds to order, Ritchie needs to begin ordering parts from his global supply base soon.

An important needed component is the turntable motor that is normally purchased from Dongguan Electric. The supplier is located in Kaohsiung City, Taiwan. The product is high quality and SAT has worked with Dongguan for 7 years. All units in the order would be shipped at one time. However, the company recently raised its prices citing higher material costs due to rising tariffs.  

Last week, Ritchie received a proposal from an Argentinian company that wants to become a supplier to SAT. Maduro Motors promises to make monthly deliveries of 500 units starting on December 15. Ritchie likes the idea of reducing the supplier-to-factory distance and receiving monthly deliveries. However, Ritchie doesn’t know much about this supplier or the political environment in Argentina.

The Options

Dongguan Electric currently sells the 20W synchronous motor to SAT for 825 TWD per unit. Order cycle time is 46 days. Terms are listed as DAT, Chicago Tradeport.

Maduro Motor proposes to sell a similar 20W electric motor to SAT for 875 ARS per unit. Order cycle time is 18 days. Terms are listed as FAS, Port of Mar del Plata.

Exchange Rates

Answer the following questions:

1. Evaluate the selling price and related costs per unit offered by each supplier in US dollars.

2 a. What costs, responsibilities and risks are assumed by the buyer (SAT) and the seller (Dongguan Electric) under Incoterms 2010, DAT, Chicago Tradeport?

b. What costs, responsibilities and risks are assumed by the buyer (SAT) and the seller (Maduro Motor) under Incoterms 2010, FAS, Port of Mar del Plata?

3. Given your responses to Questions 1 and 2, what is the total known cost per motor that SAT will incur and what other costs will SAT incur?

4. What other costs and factors would you consider during the supplier selection process?

5. Which global supplier would you select? Why?

Lehman company, a firm that has either failed or came close to collapsing during the Financial Crisis of 2007-2009,

1. Describe in some detail the events that led to the failure of the firm. What went wrong?
2. Describe the interconnectedness of the firm, and how that may have played a role in the US government’s response to its pending failure.

4. You later learn that people from the ‘class’ group from Q3 had classmates who had also tried Duolingo. (IE these classmates had started in a ‘class only’ group, and then added ‘duolingo’). The data for these people are provided below. 4a. State the null and alternative hypotheses (1 point) 4b. Calculate the test statistic (3 points); and state your conclusion (use the same alpha from Q3) (1 point) 4c. What are some reasons why your conclusions from Q3 and Q4 differ from one another? (Especially despite the larger sample size in Q3)

Question 4: Discuss the steps of the Buyer Decision Process are being used by Netflix to satisfy existing and prospective customers by their product offerings. (10 marks – approx. 500 words / 1 page).

Netflix Case: Netflix Uses Technology to Change How We Watch Videos

When Netflix was founded in 1997 in the United States, the movie rental giant Blockbuster had thousands of stores from coast to coast, filled with video cassettes ready for immediate rental to customers (Pride et al., 2018). Netflix had a different vision from this well-established, well-financed competitor. Looking at the recent development of DVD technology, Netflix saw an opportunity to change the way consumers rent movies. The entrepreneurial company built its marketing strategy around the convenience and low cost of renting DVDs by mail, for one low monthly subscription fee.

Instead of going to a local store to pick out a movie, subscribers logged onto the Netflix website to browse the DVD offerings and click to rent. Within a day or two, the DVD would arrive in the customer’s mailbox, complete with a self-mailer to return the DVD. And, unlike any other movie rental service, Netflix customers were invited to rate each movie on the Netflix website, after which they’d see recommendations tailored to their individual interests (Pride et al., 2018).

Fast-forward to the 21^st century. Video cassettes are all but obsolete, and Blockbuster, once the dominant brand in movie rentals, has only one remaining shop in the US as consumer demand has shifted to digital distribution for entertainment (Porter, 2019). In Australia, both Blockbuster and Video Ezy still had a brand presence in 2018 (Pride et al., 2018). Since then, Blockbuster’s last Australian shop closed in March 2019 (Porter, 2019), and Video Ezy exists in the form of vending machines (kiosks) after its shops closed (Rosenberg, 2018).

Both brands have been prompted to reassess their distribution channels. You may notice more DVD rental kiosks such as “Video Ezy Express” popping up in convenient locations, including outside supermarkets and shopping complexes, in a bid to improve brand reach and accessibility. DVD rental kiosks, like online services, are accessible around the clock and reduce many store costs, including wages.

In contrast, by completely eliminating the need for brick-and-mortar stores or kiosks, Netflix has minimised its costs and extended its reach to any place that has postal service and Internet access (Pride et al., 2018). The company still rents DVDs by mail (Monahan & Griggs, 2019), but it has also taken advantage of changes in technology to add video streaming on demand.

Now, customers can stream movies and television programmes to computers, television sets, videogame consoles, DVD players, Smartphones, and other web-enabled devices. One advantage to the company is that streaming a movie costs Netflix less per customer than paying the postage to deliver and return a DVD to that customer.

Netflix’s Use of Technology: From Data-Tracking to Streaming

Netflix made technology a core competency from the very beginning. Because the business has always been web-based, it can electronically monitor its customers’ online activity and analyse everything that customers view or click on.

With this data, Netflix can fine-tune the website, determine which movies are most popular among which market segments, prepare for peak periods of online activity, and refine the recommendations it makes based on each individual’s viewing history and interests. The company also uses its technical know-how to be sure that the website looks good on any size screen, from a tiny Smartphone to a large-screen television.

A few years ago, planning for a significant rise in demand for streaming entertainment, Netflix decided against investing in expanded systems for this purpose. Instead, it arranged for Amazon Web Services to provide the networking power for streaming (Pride et al., 2018).

By 2018, on a typical night in the US, Netflix streaming occupied up to 20,000 servers in Amazon data centres (Pride et al., 2018). Demand was so strong by that time, in fact, that Netflix streaming accounted for about one-third of all internet traffic to North American homes during the evening (Pride et al., 2018). This percentage is only expected to increase. The Australian market, however, may pose technological hurdles, as the National Broadband Network is still being rolled out and is not available in all areas, meaning that accessibility may not be as straightforward as it is in America (Department of Infrastructure, Transport, Regional Development and Communications, n.d.).

Although Blockbuster and Video Ezy are no longer a competitive threat in their traditional form, Netflix does face competition from Amazon’s own video streaming service, Amazon Prime Video, which headed to Australia and New Zealand’s shores in 2017 (Pride et al., 2018).

Other direct competitors include well-established Hulu, YouTube, Nine Entertainment, and

Fairfax media’s joint-venture Stan, and Foxtel’s movie-streaming service Presto. It also competes with other entertainment providers, including cable, satellite, and broadcast television. Foxtel, for example, has dramatically reduced its basic cable packages in an effort to retain its share of the market in face of increasing competition from on-demand services (Pride et al., 2018).

Netflix Offers Exclusive Programming to Customers

To differentiate itself from its competitors, Netflix commissioned exclusive programming such as House of Cards, Arrested Development, and Orange is the New Black. The cost to produce such programs runs to hundreds of millions of dollars (Pride et al., 2018). Between May–December 2019, Netflix added 179 original programmes to its American streaming service, or an average of 30 new shows a month, or about one show per day (Fruhlinger, 2019). Netflix plans to continue pouring money into exclusive content because of the payoff in positioning, positive publicity, and customer retention.

The way that Netflix releases its exclusive programming reflects its in-depth knowledge of customer behaviour. The company found through its data analysis that customers often indulge in ‘binge watching’ for a series they like, viewing episodes one after another in a short time.

Based on this research, in 2013 Netflix launched all 13 episodes of the inaugural season of House of Cards at one time, an industry first (Pride et al., 2018). Executives gathered at headquarters to monitor the introduction, cheering as thousands of customers streamed episode after episode. By the end of the first weekend, many customers had watched the entire series and shared their excitement via social media, encouraging others to subscribe and watch. When Netflix won multiple Emmy Awards for House of Cards, it was another first—the first time any Internet company had been honoured for the quality of its original programming.

One key measure of Netflix’s growth is the strong increase in the number of monthly subscribers. In 2015, Netflix had about 70 million subscribers worldwide, of which 26 million were located outside the US (Pride et al., 2018). In 2019, Netflix had 151 million paid subscribers worldwide (158 million if free trials are included) (Kafka, 2019).

Despite the brand only launching in Australia in March 2015, it already has close to 2 million subscribers in 2018 (Pride, 2018). By July 2019, Netflix had more than 11.6 million subscribers in Australia, up 18% from the year prior (Gruenwedel, 2019) Its closest direct competitor, Stan, had 2.6 million subscribes in early 2019 (Knox, 2019).

Netflix will not say how many subscribers that it has in New Zealand, but a recent survey of 1,000 people, commissioned by the Office of Film and Literature Classification and carried out by UMR Research, found that 72% of respondents subscribed to Netflix. Of the same respondent sample, 77% said they watched television shows and movies using a paid online service (Kenny, 2019).

Keys to Netflix’s successful launch include offering free-trials and access to stripped-back free versions, as well as continued investment in original programming. It appears that streaming is the new broadcasting, and that ‘on-demand’ spells the demise of scheduled entertainment.

Question 3: Netflix wants to stay ahead of their competitors (for example: Disney+, Amazon Prime Movies, Hulu, and New Zealand companies like LightBox, NEON, etc.). What strategy for growth and downsizing do you think Netflix could use to stay the dominant in the marketplace? Explain your choice. (10 marks – allow ~15 minutes)

Netflix Case: Netflix Uses Technology to Change How We Watch Videos

When Netflix was founded in 1997 in the United States, the movie rental giant Blockbuster had thousands of stores from coast to coast, filled with video cassettes ready for immediate rental to customers (Pride et al., 2018). Netflix had a different vision from this well-established, well-financed competitor. Looking at the recent development of DVD technology, Netflix saw an opportunity to change the way consumers rent movies. The entrepreneurial company built its marketing strategy around the convenience and low cost of renting DVDs by mail, for one low monthly subscription fee.

Instead of going to a local store to pick out a movie, subscribers logged onto the Netflix website to browse the DVD offerings and click to rent. Within a day or two, the DVD would arrive in the customer’s mailbox, complete with a self-mailer to return the DVD. And, unlike any other movie rental service, Netflix customers were invited to rate each movie on the Netflix website, after which they’d see recommendations tailored to their individual interests (Pride et al., 2018).

Fast-forward to the 21^st century. Video cassettes are all but obsolete, and Blockbuster, once the dominant brand in movie rentals, has only one remaining shop in the US as consumer demand has shifted to digital distribution for entertainment (Porter, 2019). In Australia, both Blockbuster and Video Ezy still had a brand presence in 2018 (Pride et al., 2018). Since then, Blockbuster’s last Australian shop closed in March 2019 (Porter, 2019), and Video Ezy exists in the form of vending machines (kiosks) after its shops closed (Rosenberg, 2018).

Both brands have been prompted to reassess their distribution channels. You may notice more DVD rental kiosks such as “Video Ezy Express” popping up in convenient locations, including outside supermarkets and shopping complexes, in a bid to improve brand reach and accessibility. DVD rental kiosks, like online services, are accessible around the clock and reduce many store costs, including wages.

In contrast, by completely eliminating the need for brick-and-mortar stores or kiosks, Netflix has minimised its costs and extended its reach to any place that has postal service and Internet access (Pride et al., 2018). The company still rents DVDs by mail (Monahan & Griggs, 2019), but it has also taken advantage of changes in technology to add video streaming on demand.

Now, customers can stream movies and television programmes to computers, television sets, videogame consoles, DVD players, Smartphones, and other web-enabled devices. One advantage to the company is that streaming a movie costs Netflix less per customer than paying the postage to deliver and return a DVD to that customer.

Netflix’s Use of Technology: From Data-Tracking to Streaming

Netflix made technology a core competency from the very beginning. Because the business has always been web-based, it can electronically monitor its customers’ online activity and analyse everything that customers view or click on.

With this data, Netflix can fine-tune the website, determine which movies are most popular among which market segments, prepare for peak periods of online activity, and refine the recommendations it makes based on each individual’s viewing history and interests. The company also uses its technical know-how to be sure that the website looks good on any size screen, from a tiny Smartphone to a large-screen television.

A few years ago, planning for a significant rise in demand for streaming entertainment, Netflix decided against investing in expanded systems for this purpose. Instead, it arranged for Amazon Web Services to provide the networking power for streaming (Pride et al., 2018).

By 2018, on a typical night in the US, Netflix streaming occupied up to 20,000 servers in Amazon data centres (Pride et al., 2018). Demand was so strong by that time, in fact, that Netflix streaming accounted for about one-third of all internet traffic to North American homes during the evening (Pride et al., 2018). This percentage is only expected to increase. The Australian market, however, may pose technological hurdles, as the National Broadband Network is still being rolled out and is not available in all areas, meaning that accessibility may not be as straightforward as it is in America (Department of Infrastructure, Transport, Regional Development and Communications, n.d.).

Although Blockbuster and Video Ezy are no longer a competitive threat in their traditional form, Netflix does face competition from Amazon’s own video streaming service, Amazon Prime Video, which headed to Australia and New Zealand’s shores in 2017 (Pride et al., 2018).

Other direct competitors include well-established Hulu, YouTube, Nine Entertainment, and

Fairfax media’s joint-venture Stan, and Foxtel’s movie-streaming service Presto. It also competes with other entertainment providers, including cable, satellite, and broadcast television. Foxtel, for example, has dramatically reduced its basic cable packages in an effort to retain its share of the market in face of increasing competition from on-demand services (Pride et al., 2018).

Netflix Offers Exclusive Programming to Customers

To differentiate itself from its competitors, Netflix commissioned exclusive programming such as House of Cards, Arrested Development, and Orange is the New Black. The cost to produce such programs runs to hundreds of millions of dollars (Pride et al., 2018). Between May–December 2019, Netflix added 179 original programmes to its American streaming service, or an average of 30 new shows a month, or about one show per day (Fruhlinger, 2019). Netflix plans to continue pouring money into exclusive content because of the payoff in positioning, positive publicity, and customer retention.

The way that Netflix releases its exclusive programming reflects its in-depth knowledge of customer behaviour. The company found through its data analysis that customers often indulge in ‘binge watching’ for a series they like, viewing episodes one after another in a short time.

Based on this research, in 2013 Netflix launched all 13 episodes of the inaugural season of House of Cards at one time, an industry first (Pride et al., 2018). Executives gathered at headquarters to monitor the introduction, cheering as thousands of customers streamed episode after episode. By the end of the first weekend, many customers had watched the entire series and shared their excitement via social media, encouraging others to subscribe and watch. When Netflix won multiple Emmy Awards for House of Cards, it was another first—the first time any Internet company had been honoured for the quality of its original programming.

One key measure of Netflix’s growth is the strong increase in the number of monthly subscribers. In 2015, Netflix had about 70 million subscribers worldwide, of which 26 million were located outside the US (Pride et al., 2018). In 2019, Netflix had 151 million paid subscribers worldwide (158 million if free trials are included) (Kafka, 2019).

Despite the brand only launching in Australia in March 2015, it already has close to 2 million subscribers in 2018 (Pride, 2018). By July 2019, Netflix had more than 11.6 million subscribers in Australia, up 18% from the year prior (Gruenwedel, 2019) Its closest direct competitor, Stan, had 2.6 million subscribes in early 2019 (Knox, 2019).

Netflix will not say how many subscribers that it has in New Zealand, but a recent survey of 1,000 people, commissioned by the Office of Film and Literature Classification and carried out by UMR Research, found that 72% of respondents subscribed to Netflix. Of the same respondent sample, 77% said they watched television shows and movies using a paid online service (Kenny, 2019).

Keys to Netflix’s successful launch include offering free-trials and access to stripped-back free versions, as well as continued investment in original programming. It appears that streaming is the new broadcasting, and that ‘on-demand’ spells the demise of scheduled entertainment.