Case Study From a small kiosk in a shopping mall established in 1997, Dr Cafe has become one of the leading coffee-shop chain in the Middle East with over 600 branches in the world. Dr Café’s success has built upon its popularity among young and trendy people and its unique approach of selecting the "best beans" in the world. Between 2008 and 2010, it has continued its aggressive expansion to Malaysia and Singapore with more branches in sight. In fact, in its plan for 2030, Dr Cafe has set its vision to expand globally and increase its network to over 30,000 branches! The marketing department has been assigned by Dr Cafe's CEO to investigate and propose possible options for expansion into a completely new area that is Europe. You are assigned by your marketing manager to help in this regard. Questions: What variables need to be considered while developing a list of potential countries? Which market entry strategy you would suggest most suitable to enter into the global market? Discuss at least three challenges that Dr Cafe may face in the early period of expansion.

1. What are the suitable type of Excavations required to remove the layer of fine grained soil with a high clay content soil directly beneath the topsoil? Moreover, it is observed from the building design that foundations shall be constructed nearby to each other. In line with the requirements, recommend the safe and sustainable type of excavation along with the construction plant team suitable to construction site situation?

2. What is the suitable type of Foundation to build a G+3 storey building transforms heavy loads to the ground and it is desired to have minimum settlement? The building will be built in a fine grained soil with a high clay content soil, and the construction site is a residential area which may contain obstructions, and consists of adjacent structures and the construction method of foundation shall not develop any ground heave.

According to the ground stability and site circumstances, propose the most desirable construction method of the foundation and construction plant.

3. What are the suitable type of Super Structure for constructing G+3 residential buildings?

Considering this, recommend the most desirable, safe and sustainable construction method for the super structure based on the most common form of construction in Al Mabelah area In Sultanate of Oman.

Topic is Big O

Problem 5

Invent a faster solution to the ThreeSum problem. Then determine the number of triples of integers that sum to zero in 8ints.txt.

Hint 1:Sort the array first (use Java’s built-inArrays.sort(int[] a))method to sort the array first.

Hint 2:A pair a[i] and a[j] is part of a triple that sums to zero if and only if the value-(a[i]+ a[j])is in the array (but not a[i] or a[j] ).

-----------------

ThreeSum.java

import java.util.Arrays;

public class ThreeSum {
   public static int count(int[] a) {
      int n = a.length;
      int count = 0;
      for (int i = 0; i < n; i++) {
         for (int j = i+1; j < n; j++) {
            for (int k = j+1; k < n; k++) {
               if (a[i] + a[j] + a[k] == 0)
                  count++;
            }
         }
      }
      return count;
   }

   public static void main(String[] args) {
      In in = new In("8Kints.txt");
      int[] a = in.readAllInts();

      System.out.println("The original array of ints: " + Arrays.toString(a));

      long startTime = System.currentTimeMillis();
      System.out.println("Count is: " + ThreeSum.count(a));
      long endTime = System.currentTimeMillis();
      long timeElapsed = endTime - startTime;
      System.out.println("Execution time in milliseconds  : " + timeElapsed);
   }
}

---------------

8ints.txt

8
-12
9
2
4
-9
-2
5

------------

The Wallen family owned a cabin on Lummi Island in the state of Washington. A driveway ran from the cabin across their property to South Nugent Road. Floyd Massey bought the adjacent lot and built a cabin on it in 1980. To gain access to his property, Massey used a bulldozer to extend the driveway, without the Wallens’ permission but also without their objection. In 2005, the Wallens sold their property to Wright Fish Company. Massey continued to use and maintain the driveway without permission or objection. In 2011, Massey sold his property to Robert Drake. Drake and his employees continued to use and maintain the driveway without permission or objection, although Drake knew it was located largely on Wright’s property. In 2013, Wright sold its lot to Robert Smersh. The next year, Smersh told Drake to stop using the driveway. Drake filed a suit against Smersh, claiming an easement by prescription (which is created by meeting the same requirements as adverse possession). (See Transfer of Ownership.)

determine how the court should rule in this case and why. Does it matter that Drake knew the driveway was located largely on Wright’s (and then Smersh’s) property? Should it matter? Why or why not?

A manager is trying to decide whether to build a small, medium, or large facility. Demand can be low, average, or high, with the estimated probabilities being 0.25, 0.40, and 0.35, respectively.

A small facility is expected to earn an after-tax net present value of just $18,000 if demand is low. If demand is average, the small facility is expected to earn $75,000; it can be increased to medium size to earn a net present value of $60,000. If demand is high, the small facility is expected to earn $75,000 and can be expanded to medium size to earn $60,000 or to large size to earn $125,000.

A medium-sized facility is expected to lose an estimated $25,000 if demand is low and earn $140,000 if demand is average. If demand is high, the medium-sized facility is expected to earn a net present value of $150,000; it can be expanded to a large size for a net payoff of $145,000.

If a large facility is built and demand is high, earnings are expected to be $220,000. If demand is average for the large facility, the present value is expected to be $125,000; if demand is low, the facility is expected to lost $60,000.

Which alternative is best, according to each of the following decision criterion?

a) Maximin

b) Maximax

c) Minimax regret

Required:
For each transaction, select which accounting principle was violated.

Question 1:

Carleton Builders Ltd. recorded the following summarized transactions during the current year:

a. The company originally sold and issued 108,000 common shares. During the current year 10,000 shares were repurchased from the shareholders and retired. Near the end of the current year, the board of directors declared and paid a cash dividend of $9 per share. The dividend was recorded as follows:

b. Carleton Builders Ltd. purchased a machine that had a list price of $98,000. The company paid for the machine in full by issuing 10,000 common shares (market price = $8.90). The purchase was recorded as follows:

c. Carleton needed a small structure for temporary storage. A contractor quoted a price of $777,000. The company decided to build the structure itself. The cost was $546,000, and construction required three months. The following entry was made:

d. Carleton owns a plant located on a river that floods occasionally. A severe flood occurred during the current year, causing an uninsured loss of $95,000 (measured as the amount spent to repair the flood damage). The following entry was made:

e. On 28 December, the company collected $73,000 cash in advance for merchandise to be shipped in January. The company’s fiscal year-end is 31 December. This transaction was recorded on 28 December as follows:

TWO QUESTIONS AT THE BOTTOM

1. Michael Hill International Limited (hereafter known as “Michael Hill”) ordinary shares are listed on the Australian Securities Exchange (ASX). Michael Hill owns and operates approximately 300 retail jewellery stores across Australia, New Zealand and Canada. According to the ASX announcement made by Michael Hill on Date: 27/08/18 and Headline: Investor Presentation, part of Michael Hill’s planned capital expenditure of $25 million is to open new stores. Michael Hill has already performed a substantial amount of data analysis related to one particular planned new store in the southern Sydney suburb of Engadine. However, the capital expenditure associated with the construction of a new store and the operating expenses are substantial. Therefore, before Michael Hill commits to building the new store a financial analysis is needed to determine if it will contribute to the goal of creating wealth for its shareholders.

2. You are employed in Michael Hill’s corporate finance department and have impressed senior management with your aptitude for financial analysis. This talent was developed through the practice-oriented assignments that you completed at University. You recall how exciting it was learning about listed companies by searching and reading announcements made to the ASX. The Chief Financial Officer (CFO) has asked you to perform a financial analysis of the planned Engadine store using a purpose-built preformatted EXCEL spreadsheet. The CFO has suggested you liaise with company employees from a variety of different departments to collect the information that is necessary to perform the analysis. You will also search through public documents to identify some of the assumptions that will be required in your financial analysis, and certain additional information. Your analysis will be provided to the Board of Directors who must approve substantial capital expenditures.

3. The two major cash outflows associated with a new store are the cost of the building and the fixtures and fittings such as specialised jewellers’ equipment and display cabinets. The directors are accountable to the shareholders and so a financial analysis is necessary to be confident that the investment in the new Engadine store is justified. The following paragraphs contain a substantial amount of information that has been gathered from across the business and it is your job to determine which information is relevant to the analysis.

4. The capital cost of the Engadine building is expected to be $2.3 million today. Michael Hill has $7.2 million cash and it plans to use $1.6 million of this amount to pay for the building which will reduce the cost to just $700,000. If the new store is built, some redundant jewellery equipment must be sold. The equipment had a total capital cost in 2016 of $600,000 and for tax purposes have a ten-year life. The equipment can be sold today for $130,000 and Michael Hill will use the sale proceeds to distribute a $130,000 dividend to its shareholders today.

5. According to the Investor Presentation Michael Hill recently completed a comprehensive brand review to respond to a changing consumer landscape. This review cost $375,000 and there is debate among management about whether the cost of this review should be classified as a tax-deductible expense in the financial analysis. 25300 FBF – SUMMER 2018 Group Assignment Page 2

6. The annual sales for a new store are difficult to predict. However, Michael Hill is confident that the Engadine store can achieve sales in the first year of operation that are similar to an ‘average’ Michael Hill Australian store. You read the Investor Presentation to identify the following two figures relevant to MICHAEL HILL AUSTRALIA for the year ending Jun-18: a) Revenue b) Total stores open You use these two figures to calculate an average revenue figure per store for 2018.

7. Since Michael Hill plans to build the new store in the year 2019, for capital budgeting purposes the first year of revenue is expected in 2020. However, the retail environment is very challenging as evidenced by the disappointing Australian same-store sales growth rate stated in the Investor Presentation. Therefore, you forecast that the Engadine store’s revenue in 2020 is equal to the average revenue figure per store for 2018 that you calculated in Paragraph 6 compounded by the same-store sales growth rate. Beyond 2020 revenue is forecast to increase by 2% p.a. reflecting the benefits of the brand review.

8. The Investor Presentation states the business has gross profit margins of approximately 63%. Therefore, your analysis assumes that costs of goods sold at the Engadine store are 37% of revenue. Fixed costs at the Engadine store in 2020 are $240,000. Management is confident that with rigorous cost control they will be able to contain the increase in fixed costs to 2% p.a. for each subsequent year. If the Engadine store is built, Michael Hill anticipates that total cash operating expenses will equal 26% of sales.

9. Starting in 2020, employees at the Engadine store will receive annual training. Michael Hill performs all training in-house using a dedicated facility that was established in 2017. The facility has an annual budget of $655,000 and inducts new employees in all aspects of the jewellery business. Ordinarily, Michael Hill would charge an arms-length amount of $75,000 per annum for staff training. However, the training division has sufficient spare capacity to train the Engadine store’s employees without the facility incurring any additional costs. The accounts department recommends internally invoicing the $75,000 training expense to the Engadine store each year.

10. For taxation purposes the new building has a twenty-year life. However, Michael Hill will perform the financial analysis of the Engadine store over a ten-year period. The new store requires $300,000 of display cabinets. The Australian Taxation Office (ATO) confirms that display cabinets have an eight-year tax life. In Michael Hill’s experience, display cabinets be operated effectively for a full ten years before they need replacing. Michael Hill’s management accountants depreciate all assets over an operational six-year life.

11. Michael Hill’s Research & Development department has spent $130,000 in recent years developing a wedding ring sizing app. This project is still several years away from fullscale release but to ensure this expense generates the required returns the directors want to include it in the analysis of the Engadine store as a cash outflow in 2019.

12. Michael Hill will borrow $1.2 million today to finance the Engadine store. The tenyear interest-only loan has annual interest repayments of $48,000 (assuming a 4% p.a. rate). Michael Hill’s accountant confirms that interest payments are classified as a business expense and are therefore tax deductible.

13. To promote the new Engadine store the marketing department has budgeted $85,000 of advertising for the store’s opening in 2020. Because this expense will reduce the new store’s profitability in 2020, managers have suggested that the advertising expense be spread 25300 FBF – SUMMER 2018 Group Assignment Page 3 out over the new store’s ten-year useful life. The ATO states that expenses associated with the Engadine store’s grand opening can be claimed as a business expense in the year incurred. Michael Hill’s total advertising budget for 2020 is $3.4 million and predicted to increase by $200,000 each year. If the Engadine store opens, the annual advertising budget will remain unchanged. For cost accounting purposes Michael Hill must allocate overheads across each business unit. Therefore, it is proposed that the Engadine store be assigned a fraction of 1/171 of the total advertising budget.

14. Michael Hill assumes that the Engadine building can be sold for $400,000 in the year 2029. At any point in time the resale value of the display cabinets is just $26,000. In ten years’ time Michael Hill assumes that it will have cash holdings of $4.4 million. You note the ATO regulation that all non-current assets be depreciated to zero.

15. If the Engadine store proceeds, then Michael Hill will implement a private placement to raise $800,000 from institutional investors to fund the store. The CEO’s annual salary in 2018 is $1,511,738 and is not expected to change whether the Engadine store opens or not.

16. If the directors approve the Engadine store Michael Hill anticipates that it will require an additional $400,000 of inventory today on top of the existing level of $1.5 million, and accounts payable will increase by $270,000. The accounts receivable balance will increase from the current level of $5.4 million to $6.2 million if the Engadine store proceeds.

17. Michael Hill has a required rate of return of 9%. Assume the company tax rate will remain at 30%.

REQUIREMENTS Your team must answer the following questions. All answers must be entered into the preformatted EXCEL spreadsheet available on UTSOnline. Questions 1 to 4 require information relating to the capital budgeting decision of the proposed Engadine store. Questions 5 to 8 require you to gather some additional information regarding Michael Hill shares.

QUESTIONS TO ANSWER

1. The cash flows at the end.

2. What is the NPV of the proposed Engadine store, and your recommendation?

A survey collected data on annual credit card charges in seven different categories of expenditures: transportation, groceries, dining out, household expenses, home furnishings, apparel, and entertainment. Using data from a sample of 42 credit card accounts, assume that each account was used to identify the annual credit card charges for groceries (population 1) and the annual credit card charges for dining out (population 2). Using the difference data, with population 1 − population 2, the sample mean difference was

d = $830,

and the sample standard deviation was

s_d = $1,129.

(a)

Formulate the null and alternative hypotheses to test for no difference between the population mean credit card charges for groceries and the population mean credit card charges for dining out.

a)H₀: μ_d ≥ 0

H_a: μ_d < 0

b)H₀: μ_d = 0

H_a: μ_d ≠ 0

c)H₀: μ_d ≠ 0

H_a: μ_d = 0

d)H₀: μ_d ≤ 0

H_a: μ_d > 0

e)H₀: μ_d < 0

H_a: μ_d = 0

(b)

Calculate the test statistic. (Round your answer to three decimal places.)

What is the p-value? (Round your answer to four decimal places.)

Can you conclude that the population means differ? Use a 0.05 level of significance.

The p ≤ 0.05, therefore we cannot conclude that there is a difference between the annual population mean expenditures for groceries and for dining out.The p ≤ 0.05, therefore we can conclude that there is a difference between the annual population mean expenditures for groceries and for dining out.     The p > 0.05, therefore we cannot conclude that there is a difference between the annual population mean expenditures for groceries and for dining out.The p > 0.05, therefore we can conclude that there is a difference between the annual population mean expenditures for groceries and for dining out.

(c)

What is the point estimate (in dollars) of the difference between the population means?

$

What is the 95% confidence interval estimate (in dollars) of the difference between the population means? (Round your answers to the nearest dollar.)

$  to $

Which category, groceries or dining out, has a higher population mean annual credit card charge?

The 95% confidence interval  ---Select--- is completely above is completely below contains zero. This suggests that the category with higher mean annual expenditure is  ---Select--- dining out groceries .

You may need to use the appropriate technology to answer this question.

A survey collected data on annual credit card charges in seven different categories of expenditures: transportation, groceries, dining out, household expenses, home furnishings, apparel, and entertainment. Using data from a sample of 42 credit cardaccounts, assume that each account was used to identify the annual credit card charges for groceries (population 1) and the annual credit card charges for dining out (population 2). Using the difference data, with population 1 − population 2, the sample mean difference was

d = $870,

and the sample standard deviation was

s_d = $1,121.

(a)

Formulate the null and alternative hypotheses to test for no difference between the population mean credit card charges for groceries and the population mean credit card charges for dining out.

H₀: μ_d ≠ 0

H_a: μ_d = 0

H₀: μ_d < 0

H_a: μ_d = 0

H₀: μ_d ≤ 0

H_a: μ_d > 0

H₀: μ_d ≥ 0

H_a: μ_d < 0

H₀: μ_d = 0

H_a: μ_d ≠ 0

(b)

Calculate the test statistic. (Round your answer to three decimal places.)

What is the p-value? (Round your answer to four decimal places.)

Can you conclude that the population means differ? Use a 0.05 level of significance.

The p ≤ 0.05, therefore we can conclude that there is a difference between the annual population mean expenditures for groceries and for dining out.The p > 0.05, therefore we can conclude that there is a difference between the annual population mean expenditures for groceries and for dining out.    The p > 0.05, therefore we cannot conclude that there is a difference between the annual population mean expenditures for groceries and for dining out.The p ≤ 0.05, therefore we cannot conclude that there is a difference between the annual population mean expenditures for groceries and for dining out.

(c)

What is the point estimate (in dollars) of the difference between the population means?

$

What is the 95% confidence interval estimate (in dollars) of the difference between the population means? (Round your answers to the nearest dollar.)

$  to $

Which category, groceries or dining out, has a higher population mean annual credit card charge?

The 95% confidence interval  ---Select--- contains is completely below is completely above zero. This suggests that the category with higher mean annual expenditure is  ---Select--- groceries dining out .

Sunshine Travel, Inc. is a producer of upright suitcases. Its current line of upright suitcases are selling excellently. However, in order to cope with the foreseeable competition from other similar products, ST spent $5,900,000 to develop a new line of smart upright suitcases (new model development cost) that enable users to track easily the location of their suitcases using an app on their cell phones. The smart suitcase model has a built-in global tracker which applies the state-of-the-art micro-electronics and ground-based cellular telephone technologies to track and report its location. In addition, its digital self scale weighs itself automatically once it is filled with contents. The sensors in the side studs of the suitcase will send the information on the measured weight to the accompanying app on the user's cell phone for his/her review so as to avoid unnecessary overweight charges by the airlines when flying. The suitcase's shell is made of polycarbonate that will certainly provide extra strength and durability to protect the contents inside it. Its fine wheels and lightweight handle make the suitcase super easy to use by travelers. The suitcase's TSA friendly locks provide convenience and its multidirectional 360 degree dual wheels enable its user to move the suitcase more smoothly and in a more stable way at the same time. The company had also spent a further $1,000,000 to study the marketability of this new line of smart upright suitcases (marketability studying cost). ST is able to produce the smart upright suitcases at a variable cost of $110 each. The total fixed costs for the operation are expected to be $10,000,000 per year. ST expects to sell 3,200,000 suitcases, 3,700,000 suitcases, 2,600,000 suitcases, 1,500,000 suitcases and 1,000,000 suitcases of the new model per year over the next five years respectively. The new smart upright suitcases will be selling at a price of $150 each. To launch this new line of production, ST needs to invest $35,000,000 in equipment which will be depreciated on a seven-year MACRS schedule. The value of the used equipment is expected to be worth $3,800,000 as at the end of the 5 year project life. ST is planning to stop producing the existing suitcase model entirely in two years. Should ST not introduce the smart upright suitcases, sales per year of the existing model will be 1,500,000 suitcases and 1,100,000 suitcases for the next two years respectively. The existing model can be produced at variable costs of $90 each and total fixed costs of $7,500,000 per year. The existing suitcases are selling for $120 each. If ST produces the smart upright model, sales of existing model will be eroded by 900,000 suitcases for next year and 935,000 suitcases for the year after next. In addition, to promote sales of the existing model alongside with the smart upright model, ST has to reduce the price of the existing model to $70 each. Net working capital for the smart upright suitcase project will be 20 percent of sales and will vary with the occurrence of the cash flows. As such, there will be no initial NWC required. The first change in NWC is expected to occur in year 1 according to the sales of the year. ST is currently in the tax bracket of 35 percent and it requires a 15 percent returns on all of its projects. The firm also requires a payback of 3 years for all projects.

You have just been hired by ST as a financial consultant to advise them on this smart upright suitcase project. You are expected to provide answers to the following questions to their management by their next meeting which is scheduled sometime next month. What is/are the sunk cost(s) for this smart upright suitcase project? Briefly explain. You have to tell what sunk cost is and the amount of the total sunk cost(s). In addition, you have to advise ST on how to handle such cost(s). What are the cash flows of the project for each year? What is the payback period of the project? What is the PI (profitability index) of the project? What is the IRR (internal rate of return) of the project? What is the NPV (net present value) of the project? Should the project be accepted based on Payback, PI, IRR and NPV? Briefly explain