Complete the following questions. In addition to answering the items below, you must submit an analysis of the assignment. Analyze the specific outcomes and analysis directed toward the management team at Smart Company describing what the numbers mean and how they relate to the business. Submit journal entries in an Excel file and written segments in an MS Word document. For written answers, please make sure your responses are well-written, formatted per CSU-Global Guide to Writing and APA and have proper citations, where applicable.

Human Resource management subject

Circle the ONE best answer.
1. What HR activity determines what, where, when, and how work tasks are done?
a. defining and designing work
b. human resource planning
c. recruitment and selection
d. employee relations

2. What HR activity provides the resources to assist employees in developing the necessary knowledge and skills to do their jobs today and in the future?
a. job descriptions and design
b. human resource planning
c. training and development
d. strategic planning


3. What HR process ensures that people in the organization are the right people with the right skills at the right time in the right place?
a. human resource planning
b. job descriptions and work design
c. recruitment and selection
d. employee relations


4. Which of the following is NOT an emerging area in the field of HRM?
a. high performance work groups
b. incentive compensation
c. organizational development
d. human resource information systems


5. What are two emerging areas in the field of HRM?
a. organizational development and flexible work arrangements
b. incentive compensation and labour relations
c. pay and benefits, and safety
d. performance management and job design


6. What are two emerging areas in the field of HRM?
a. executive compensation and labour relations
b. safety and unions
c. performance management and staffing
d. high performance work groups and HRIS


7. What emerging HR activity is an extension of training and development?
a. on the job coaching
b. learning and organizational development
c. human resource planning
d. employee development


8. Which term describes the structure of HR processes and activities and their relationship to the organization and the employees?
a. linear
b. integrated
c. functional
d. dynamic


9. Why is it important that line managers understand HRM?
a. it allows managers to meet their goals through the achievement of organization goals
b. it allows managers to apply HRM principles in the execution of their technical skills
c. managers are the key link between the employee and the customer
d. managers are responsible for a wide range of HRM activities


10. Jayne Carter, the Vice President of HR for Starline Hotels is focused on ensuring that Starline Hotels is staffed with the most effective human resources to achieve the organizations strategic goals. What is Jayne’s role?
a. operational
b. strategic
c. staffing
d. administrative


11. What actions must managers or HRMs take to ensure privacy legislation is upheld?
a. ensure that all personal information is NOT discarded
b. do not collect employees’ personal information, only collect work-related information
c. provide employees limited access to their online or paper personal files
d. acquire written consent when collecting and using employees’ personal information

12. Which legislation is paramount over other employment laws?
a. labour law
b. employment equity law
c. human rights law
d. criminal law

13. What are the two basic employment laws for companies that are federally regulated?
a. Canada Human Rights Code and Canada Labour Act
b. Canada Labour Code and the Canadian Human Rights Act
c. Canada Human Rights Code and Labour Standards Act
d. Canada Labour Standards Act and Canada Human Rights Act

14. What is acceptable grounds for discrimination?
a. religion
b. handicap or disability
c. lack of qualifications
d. race or colour

15. Which example is systemic discrimination?
a. asking female candidates to demonstrate tow-motor ability, but not male applicants
b. requesting only persons with disabilities undergo pre-employment medicals
c. using word-of-mouth hiring practices
d. administering a personality profile assessment during the selection process


16. What is a justifiable reason for discrimination based on business reasons of safety or effectiveness?
a. a bona fide occupational stipulation
b. employee wellness
c. a bona fide occupational qualification
d. reverse discrimination


17. What is the term for employers’ attempts to adjust working conditions and employment practices in order to prevent discrimination?
a. prohibited ground of discrimination
b. bona fide occupational qualification
c. reasonable accommodation
d. undue hardship

18. Why does health and safety concern managers and supervisors?
a. because customer service as well as safety is extremely important
b. because of global competition
c. because cutting costs is essential
d. because occupational health and safety accidents are numerous and costly

19. Which of the following is a factor that causes an occupational illness?
a. stove burns
b. fracture (workplace accident)
c. inhalation of fumes
d. back injury


20. Which of the following is a factor that causes an occupational injury?
a. chemical exposure
b. fracture (workplace accident)
c. inhalation of fumes
d. stress


21. Which of the following is an occupational injury?
a. chemical exposure
b. fracture (workplace accident)
c. inhalation of fumes
d. stress


22. Which of the following is an occupational illness?
a. chemical burns
b. leg fracture
c. inhalation of asbestos
d. cumulative trauma disorders


23. In all jurisdictions, to whom are employers required to report any accidents that cause injuries or diseases?
a. the Occupational Health and Safety officer
b. the company doctor
c. local health officials
d. the Workers’ Compensation Board


24. Which of the following is an employee responsibility for health and safety?
a. perform all duties assigned regardless of risk of exposure to hazards
b. implement health and safety programs
c. follow all safety rules and regulations
d. report all unsafe conditions to the Workers’ Compensation Board

25. In defining work, what does the line manager determine?
a. the rank order of positions in the organization
b. the method of job analysis to be used
c. the rate of pay for jobs
d. the tasks and activities to be performed

26. In the future, what will companies use to describe the work to be done instead of focusing on job descriptions?
a. work profiles
b. roles
c. competencies
d. position

27. What are two reasons that the line manager should take the primary role in defining work?
a. because the line manager is responsible for defining performance standards and rate of pay
b. because the line manager determines the duties to be performed and knows what skills the job requires
c. because the line manager knows what knowledge the job requires and the rate of pay
d. because the line manager determines the tasks to be performed and the rate of compensation


28. Which of the following HRM processes does NOT make use of information about the work or job?
a. training and development
b. recruitment and selection
c. information systems requirements
d. performance evaluation

29. What do the duties of a job consist of, ideally?
a. related tasks among various jobs
b. tasks and activities that are distinct from each other
c. natural units of work that are similar and related
d. a blend of complex and routine tasks


30. Which best describes the relationship between job requirements and HRM processes?
a. Job design effects can correct almost all employee motivation problems.
b. All HRM processes use information on jobs.
c. A major use of job analysis information is to identify performance deficiencies.
d. Unions generally use job information from job analysis



SHORT ANSWER QUESTIONS

1. Identify and briefly describe any four HR activities in an organization.

2. List six competitive challenges faced by Canadian organizations. Describe and give an example of any one of the six challenges faced by an organization you are familiar with.


3. Define strategic HRM and how it is linked to an organization’s business strategy. Provide an example.


4. Define and give three examples of one human right legal concept affecting managers and HRMs


5. Choose two of the situations below. Describe whether you think the workplace behaviour is discrimination or not. Describe the factors that influenced your decision. Ensure you list the human rights prohibition and include at least one human rights legal concept for both of your answers.

LEADERSHIP IMPLICATIONS IN COMPLEX PROJECTS: THE BOEING DREAMLINER AND CEO JIM MCNERNEY In defense of criticism of Boeing’s 787 production delays, CEO Jim McNerney explained: We are trying to come up with the strongest set of partnerships we can with the people that supply our major systems and structures. In defense, we are trying to respond to the pressures of governments buying fewer things at lower prices, with less favorable contract terms. And that pressure cannot just stop at Boeing. We have to find willing partners to share the burden. And on the commercial side, low-cost carriers and a very flattish global economy leads you to the same conclusion. So the ‘no-fly list’ is people who don’t want to play ball, who only want to hide behind the contractual language of their current programs. We’re going to give those who do want to work with us more business—or we’ll move some things in-house. This is the reality we all face. The majority of suppliers are beginning to have productive discussions with us. We have some holdouts, people who take the position that the pressure should only be absorbed by Boeing, notwithstanding the fact that 65 percent of most of our airplanes are built by suppliers…we both have to demand lots of productivity improvements to offset price pressure. Those that work with us in that way will find more volume. We are the biggest player. My message is, ‘Don’t bet against us. The Boeing Dreamliner Boeing Corporation was one of the world's largest manufacturers of commercial aircraft, ranking 27th on the Fortune 500 list in 2016. When it announced the delivery of its first 787 Dreamliner transporter to its first customer, All Nippon Airways, in September, 2011, it was almost 40 months later than originally planned, after a long series of unexpected delays. The actual development cost of the project had been estimated at about US$40 billion but came in over twice the original estimate. One year later, a malfunction was discovered in one of the aircraft's lithium batteries, which caught fire after takeoff. These problems led to months of grounding, imposed by the FAA (Federal Aviation Administration), of the entire Dreamliner fleet already in service. The Dreamliner was designed to be a revolutionary project in terms of physical characteristics, technology, management style, financing, design and engineering management, quality assurance, and assembly processes. Many of these initiatives were intentionally taken on to benefit from new developments in aviation technology and to speed up design and development; however, they posed unexpected challenges for both the company and the project team. A New Organizational Paradigm: Boeing adopted a new organizational paradigm for the development of Dreamliner and decided to outsource an unprecedented portion of the design, engineering, manufacturing, and production to a global network of 700 local and foreign suppliers. With more than 70% foreign development content, this decision turned Boeing's traditional supply chain into a development chain. Tier-1 suppliers became responsible for the detailed design and manufacturing of 11 major subassemblies, while Boeing only did system integration and final assembly. Furthermore, Boeing came up with a new risk and revenue sharing contract with its suppliers, called the “build-to-performance” model (as differentiated from the more typical “build-to-spec” or “build-to print” models). According to the model, contract suppliers bore the non-recurring R&D cost up-front, owned the intellectual property of their design, and got paid a share of the revenues from future aircraft sales. Under this model, the suppliers’ roles were dramatically changed from mere subcontractors to strategic partners who had a long-term stake in the project. This model created some risks, which caused extensive integration problems and additional delays. Finally, Boeing employed a new assembly method. Subcontractors were required to integrate their own subsystems and send their preassembled subsystems to a single final assembly site. The goal was to reduce Boeing's integration effort by leveraging subcontractors to do more work compared with previous projects. However, many of these subcontractors were not able to meet their delivery schedules due to lack of experience in subsystem design and integration, as well as insufficient guidelines and training. As a consequence, parts and assemblies, which were sent to Boeing for integration, were missing the appropriate documentation, including instructions for final assembly. Unanticipated Consequences Supply chain and design delays increased, as did Boeing’s financial losses, including penalties for late delivery of the aircraft. CEO McNerney had to face some hard facts based on earlier decisions. He acknowledged that his new paradigm may have been flawed, “We got a little bit seduced that it would all come together seamlessly and the same design rules would be applied everywhere in the world and corners wouldn’t be cut and financial realities wouldn’t hit certain folks. McNerney’s approach to workers, suppliers, and labor resources was notably off-putting, according to many in Washington State, Boeing’s corporate home. Since 2011 when Boeing opened its non-unionized South Carolina assembly plant where salaries were approximately $10/hour less than those of the unionized workers in Washington State, worker relationships have been troubled. While admirers have touted his efficiency and ability to deliver profits, alienated professionals at every level, along with union members, have described McNerney as “cold-blooded.” One labor specialist stated, “A lot of employees feel top management doesn’t value them, treats them as expendable [creating an atmosphere of] lowered trust, anger and disgruntlement. According to Richard Aboulafia, noted aerospace specialist, “Management believes if it continues to squeeze suppliers and labor, the problem[s] will be solved. Again, the track record here is not great. Most of the manufacturing world tell a very different story. Whether it’s with cars, aircraft or turbines, productivity improvements often come from the shop floor. That means convincing the people who build things to identify ways to reduce scrap, improve work flow and eliminate defects. To promote the kind of process improvements that happen in the factory, a work force needs incentives such as profit-sharing or other compensation. At the very least, machinists and engineers need to believe their work is valued. Taking away pensions at a time of record sales is simply a bad way to motivate workers to go the extra mile. Boeing right now embodies a strange combination of very good and very bad. McNerney’s management style created its own problems. He vacillated between maintaining his dispassionate, hands-off general management style with multiple-times per day meetings with executives during the Dreamliner grounding crisis. His revolving door policy for managers in charge of the 787 project (four in as many years) generated a sense of uncertainty at all levels in the company and increased pressure to meet goals quickly. This focus on urgency caused him to reflect, after having resolved the major problems in the Dreamliner, that the plane could have been completed sooner had Boeing listened more to the customer and less to innovative technology. He said, in a rare interview in 2014, “What I would like to have done is pursued 70 percent of the technology that still would have satisfied 95 percent of [customer desire]. It would have gotten to them quicker, and it would have cost us less…You get excited about these projects, and things creep into the design and you lose discipline sometimes. We just need to be reminded about that. As described by an anonymous former Boeing executive, “The sense I always got from him in meetings is that it could have been any business…If we’d been making cameras or autos or doing bond trading, it would have all been the same to him. The net effect is distancing from the people who come to work there every day, who bring their hearts and souls to it and want to make it more than a job.

Required

Explain the Project Risk Analysis and Management (PRAM) process and relate it to the case.

Note : Answers should be in word version format written and in details and in your own words

i

dividually students will develop a formal response to the problem(s) posed in the case, addressing the following areas within the analysis, and using the same headings. (Numbers in brackets do not necessarily correspond to length but represent the weight that will be given to each section in the grading):

1. Issue Identification (5%): Identification of the problem/issue that must be resolved or decision that must be made. Phrase the problem/cause in the most succinct way possible. Think about:
   1. Differentiating the immediate from the basic problem
   2. The implications of the problem(s)
   3. Identifying the root cause of the problem(s)
   4. Determining the decision facing the key person(s)?
2. Identification of Key Success Factors (10%): Identify the company-specific factors in point form that are absolutely critical to the success of the organization. These are the factors that, if ignored, will mean the project will probably fail. Include the following considerations:
   1. What factors must be managed successfully for the company to prosper?
   2. Key success factors should reflect the top priorities of the organization in this particular case (eg., quality, productivity, low cost leader, etc.)
   3. These factors are part of the criteria against which you will evaluate solutions (along with basic criteria such as profit)
3. Identification of Alternatives (5%): Identify alternative solutions. Only deal with feasible alternatives. In the next three sections, analyse all alternatives against criteria set out in key success factors and basic requirements (eg., profitability).
4. Quantitative Analysis (40%): Push numbers in an analysis that is relevant to the issue at hand. Differentiate between what is relevant and what is irrelevant.
5. Qualitative Analysis (30%): Be sure to analyze qualitative issues – they need discussion in most cases. In particular, analyze alternatives in light of key success factors – will this alternative solve the problem and fit with our key success factors.
6. Recommendation on Course of Action (5%): State your recommendation. State briefly the justification for your recommended course of action. Make sure your recommendation flows out of your quantitative and qualitative analyses. Tie your recommendation back to the key success factors. The solution and implementation shout fit with problems and criteria identified above.
7. Circumvention of Potential Problems (5%): If there could be problems with your recommendations, state them. As well, suggest ways to overcome these problems – a contingency plan to address potential difficulties.

There is no set length to the report, but clear, succinct and concise language and organization will be considered favourably in the grade.

Students will submit the final report as a word document through the submission link below.

The Case

You are a Senior Consultant for the professional service firm, BUSI 2083 LLP. Your firm specializes in providing a wide variety of internal business solutions for different clients. It is your final week on the job and a Manager asks you for some help prior to your departure. Eager to leaving a lasting impression, you start reading the background information provided by the Manager.

Lesley Donovan is the controller for the East division of Explorer Ltd. Jason Conner, head of plant engineering, has just left Donovan’s office after presenting three alternatives for submission in the capital expenditure budget for the fiscal year 2014. The budget is due to the CEO in two days and therefore Donovan realizes that time is of the essence.

Conner has outlined the following alternatives to replace an outdated milling machine:

1. build a general purpose milling machine;
2. buy a special purpose numerically controlled milling machine; or
3. buy a general purpose milling machine.

Explorer Ltd. is a well-established company. The company was set up about 30 years ago by two brothers Dan and Kevin Thompson, in Huntsville, Ontario, to produce accessories for the automobile industry. The Central division continues to serve the auto industry, and is the largest division in the company with sales of $35 million annually. Dan’s son is now head of this division. Kevin is still active in the company and is the Chief Executive Officer (CEO). His office is located in Toronto.

The parts division supplies seals to the mining and petrochemical industry from a plant in Toronto. This division is only ten years old and until 2010 was highly profitable. As a result of the downturn in the sector of the economy, sales in 2012 were only $12 million.

The East division, located in Scarborough, is the engineering division. Full-time employees tend to work approximately 2,000 hours in the division. Regular product lines include industrial fans, industrial cooling units, and refrigeration units for industrial users. The division is highly capital-intensive and sales tend to be directly related to general economic conditions.

Each division runs independently and performance is based upon budgeted return on investment. Bonuses are paid if the budget target is achieved. Annually, each division prepares a detailed budget submission to Kevin, outlining expected profit performance and capital expenditure requests. The milling machine proposal is part of the capital expenditure request.

The 2013 pro forma income statement for East division is set out below:

Jason Connor has pointed out to Donovan that the existing machine is not only outdated but maintenance costs are becoming prohibitive. Jason also noted that maintenance costs of new general purpose machines are only $26,000 while special purpose machines can save an additional $14,000 in maintenance. Also there would be a significant savings in insurance as the price for a general purpose machine would drop to $3,000 while a special purpose machine would be 67% higher than the general purpose machine. The machine has no market or salvage value and he is sure that its book value is now zero. The trouble is that he doesn’t know which proposal is best for the company. In addition to the cost and revenue date provided, Connor provided comments on each alternative below:

1. Build a general purpose machine:
   • This machine can be built by East division. The division is below capacity at present as a major contract has just been completed. The division could thus produce the machine without affecting revenue-producing activity, but it will take six months to complete. The machine is expected to last five years and have no salvage value because removal costs will probably equal selling price.
   • Connor believes that the division has the technical expertise to undertake the work. In 2012, the division produced a specialized drilling machine that has proven very successful. Connor pointed out that David Williams, chief engineer, loves the design challenge of new machines. Donovan sat down with Connor and produced the following cost estimates:

   Material and parts	$55,000
   Direct labour (DL$)	$90,000
   Variable overhead (50% of DL$)	$45,000
   Fixed overhead (25% of DL$)	$22,500
   TOTAL	$212,500

   • Donovan argues that this job should also bear a proportion of administrative costs; she suggests $12,000.
2. Buy a special purpose machine:
   
   The advantage of this special purpose machine is that only one operator is required and output per hour could increase by 25%. In addition, maintenance costs are significantly reduced because microchip circuitry is employed.
   
   Connor points out that this machine is state-of-the-art and would probably mean that new work could be taken on. A numerically controlled machine required extensive training of operators. In total, 26 weeks are spent in the supplier’s factory located in Florida. While the training is going on, the supplier provides an operator to work the machine without charge. Expected costs of this training period including hotel, per diem, and travel will cost $3,000 per week, excluding the operator’s labour which is set at $15 per hour.
   
   The machine costs $625,000, and the supplier guarantees the salvage value of $25,000 at the end of five years. It is available immediately. It is estimated the machine can generate sales of $243,750 annually at full capacity and require $19,500 in direct materials cost. While the direct material costs are equivalent, the level of sales for the general purpose machine are $48,000 lower than the special purpose machine.
3. Buy a general purpose machine:
   
   The purchase price of this machine is $295,000 and cost levels associated with the machine are expected to be the same as the general purpose machine built by the company because the technology is similar. The salvage value of the machine net of removal costs, is estimated to be $5,000 in five years. It can be delivered immediately.

General comments

The required rate of return for this investment class has been set at 8% by Kevin Thompson.

Required

Prepare the budget submission to Kevin. Show your answers.

Taylor’s “Libertarianism”

                                                                           THE THEORY OF AGENCY

What is Taylor’s concept of agent causation?

Does it accurately reflect what people take themselves to be doing when they perform action?

Why or why not?

(24) The only conception of action that accords with our data is one according to which men— and perhaps some other things too—are sometimes, but of course not always, self-determining beings; that is, beings which are sometimes the causes of their own behavior. In the case of an action that is free, it must be such that it is caused by the agent who performs it, but such that no antecedent conditions were sufficient for his performing just that action. In the case of an action that is both free and rational, it must be such that the agent who performed it did so for some reason, but this reason cannot have been the cause of it.

(25) Now this conception fits what men take themselves to be; namely, beings who act, or who are agents, rather than things that are merely acted upon, and whose behavior is simply the causal consequence of conditions which they have not wrought. When I believe that I have done something, I do believe that it was I who caused it to be done, I who made something happen, and not merely something within me, such as one of my own subjective states, which is not identical with myself. If I believe that something not identical with myself was the cause of my behavior—some event wholly external to myself, for instance, or even one internal to myself, such as a nerve impulse, volition, or whatnot—then I cannot regard that behavior as being an act of mine, unless I further believe that I was the cause of that external or internal event. My pulse, for example, is caused and regulated by certain conditions existing within me, and not by myself. I do not, accordingly, regard this activity of my body as my action, and would be no more tempted to do so if I became suddenly conscious within myself of those conditions or impulses that produce it. This behavior with which I have nothing to do, behavior that is not within my immediate control, behavior that is not only not free activity, but not even the activity of an agent to begin with; it is nothing but a mechanical reflex. Had I never learned that my very life depends on this pulse beat, I would regard it with complete indifference, as something foreign to me, like the oscillations of a clock pendulum that I idly contemplate.

(26) Now this conception of activity, and of an agent who is the cause of it, involves two rather strange metaphysical notions that are never applied elsewhere in nature. The first is that of a self or person—for example, a man—who is not merely a collection of things or events, but a substance and a self-moving being. For on this view it is a man himself, and not merely some

part of him or something within him, that is the cause of his own activity. Now we certainly do not know that a man is anything more than an assemblage of physical things and processes,

which act in accordance with those laws that describe the behavior of all other physical things and processes. Even though a man is a living being, of enormous complexity, there is nothing,

apart from the requirements of this theory, to suggest that his behavior is so radically different in its origin from that of other physical objects, or that an understanding of it must be sought in

some metaphysical realm wholly different from that appropriate to the understanding of non- living things. Second, this conception of activity involves an extraordinary conception of

causation, according to which an agent, which is a substance and not an event, can nevertheless be the cause of an event. Indeed, if he is a free agent then he can, on this conception, cause an event to occur—namely, some act of his own—without anything else causing him to do so. This means that an agent is sometimes a cause, without being an antecedent sufficient condition; for if I affirm that I am the cause of some act of mine, then I am plainly not saying that my very existence is sufficient for its occurrence, which would be absurd. If I say that my hand causes my pencil to move, then I am saying that the motion of my hand is, under the other conditions then prevailing, sufficient for the motion of the pencil. But if I then say that I cause my hand to move, I am not saying anything remotely like this, and surely not that the motion of my self is sufficient for the motion of my arm and hand, since these are the only things about me that are moving.

(27) This conception of the causation of events by beings or substances that are not events is, in fact, so different from the usual philosophical conception of a cause that it should not even bear the same name, for "being a cause" ordinarily just means "being an antecedent sufficient condition or set of conditions." Instead, then, of speaking of agents as causing their own acts, it would perhaps be better to use another word entirely, and say, for instance, that they originate them, initiate them, or simply that they perform them. Now this is on the face of it a dubious

conception of what a man is. Yet it is consistent with our data, reflecting the presuppositions of deliberation, and appears to be the only conception that is consistent with them, as determinism and simple indeterminism are not. The theory of agency avoids the absurdities of simple indeterminism by conceding that human behavior is caused, while at the same time avoiding the difficulties of determinism by denying that every chain of causes and effects is infinite. Some such causal chains, on this view, have beginnings, and they begin with agents themselves. Moreover, if we are to suppose that it is sometimes up to me what I do, and understand this in a sense which is not consistent with determinism, we must suppose that I am an agent or a being who initiates his own actions, sometimes under conditions which do not determine what action he shall perform. Deliberation becomes, on this view, something that is not only possible but quite rational, for it does make sense to deliberate about activity that is truly my own and that depends in its outcome upon me as its author, and not merely upon something more or less esoteric that is supposed to be intimately associated with me, such as my thoughts, volitions, choices, or whatnot.

(28) One can hardly affirm such a theory of agency with complete comfort, however, and wholly without embarrassment, for the conception of men and their powers which is involved in it is

strange indeed, if not positively mysterious. In fact, one can hardly be blamed here for simply denying our data outright, rather than embracing this theory to which they do most certainly

point. Our data—to the effect that men do sometimes deliberate before acting, and that when they do, they presuppose among other things that it is up to them what they are going to do—rest upon nothing more than fairly common consent. These data might simply be illusions. It might in fact be that no man ever deliberates, but only imagines that he does, that from pure conceit he supposes himself to be the master of his behavior and the author of his acts. Spinoza has suggested that if a stone, having been thrown into the air, were suddenly to become conscious, it would suppose itself to be the source of its own motion, being then conscious of what it was doing but not aware of the real cause of its behavior. Certainly men are sometimes mistaken in believing that they are behaving as a result of choice deliberately arrived at. A man might, for example, easily imagine that his embarking upon matrimony is the result of the most careful and rational deliberation, when in fact the causes, perfectly sufficient for that behavior, might be of an entirely physiological, unconscious origin. If it is sometimes false that we deliberate and then act as the result of a decision deliberately arrived at, even when we suppose it to be true, it might always be false. No one seems able, as we have noted, to describe deliberation without metaphors, and the conception of a thing's being "within one's power" or "up to him" seems to defy analysis or definition altogether, if taken in a sense which the theory of agency appears to require.

(29) These are, then, dubitable conceptions, despite their being so well implanted in the common sense of mankind. Indeed, when we turn to the theory of fatalism, we shall find formidable metaphysical considerations which appear to rule them out altogether. Perhaps here, as elsewhere in metaphysics, we should be content with discovering difficulties, with seeing what is and what is not consistent with such convictions as we happen to have, and then drawing such satisfaction as we can from the realization that, no matter where we begin, the world is mysterious and the men who try to understand it are even more so. This realization can, with some justification, make one feel wise, even in the full realization of his ignorance.

dividually students will develop a formal response to the problem(s) posed in the case, addressing the following areas within the analysis, and using the same headings. (Numbers in brackets do not necessarily correspond to length but represent the weight that will be given to each section in the grading):

1. Issue Identification (5%): Identification of the problem/issue that must be resolved or decision that must be made. Phrase the problem/cause in the most succinct way possible. Think about:
   1. Differentiating the immediate from the basic problem
   2. The implications of the problem(s)
   3. Identifying the root cause of the problem(s)
   4. Determining the decision facing the key person(s)?
2. Identification of Key Success Factors (10%): Identify the company-specific factors in point form that are absolutely critical to the success of the organization. These are the factors that, if ignored, will mean the project will probably fail. Include the following considerations:
   1. What factors must be managed successfully for the company to prosper?
   2. Key success factors should reflect the top priorities of the organization in this particular case (eg., quality, productivity, low cost leader, etc.)
   3. These factors are part of the criteria against which you will evaluate solutions (along with basic criteria such as profit)
3. Identification of Alternatives (5%): Identify alternative solutions. Only deal with feasible alternatives. In the next three sections, analyse all alternatives against criteria set out in key success factors and basic requirements (eg., profitability).
4. Quantitative Analysis (40%): Push numbers in an analysis that is relevant to the issue at hand. Differentiate between what is relevant and what is irrelevant.
5. Qualitative Analysis (30%): Be sure to analyze qualitative issues – they need discussion in most cases. In particular, analyze alternatives in light of key success factors – will this alternative solve the problem and fit with our key success factors.
6. Recommendation on Course of Action (5%): State your recommendation. State briefly the justification for your recommended course of action. Make sure your recommendation flows out of your quantitative and qualitative analyses. Tie your recommendation back to the key success factors. The solution and implementation shout fit with problems and criteria identified above.
7. Circumvention of Potential Problems (5%): If there could be problems with your recommendations, state them. As well, suggest ways to overcome these problems – a contingency plan to address potential difficulties.

There is no set length to the report, but clear, succinct and concise language and organization will be considered favourably in the grade.

Students will submit the final report as a word document through the submission link below.

The Case

You are a Senior Consultant for the professional service firm, BUSI 2083 LLP. Your firm specializes in providing a wide variety of internal business solutions for different clients. It is your final week on the job and a Manager asks you for some help prior to your departure. Eager to leaving a lasting impression, you start reading the background information provided by the Manager.

Lesley Donovan is the controller for the East division of Explorer Ltd. Jason Conner, head of plant engineering, has just left Donovan’s office after presenting three alternatives for submission in the capital expenditure budget for the fiscal year 2014. The budget is due to the CEO in two days and therefore Donovan realizes that time is of the essence.

Conner has outlined the following alternatives to replace an outdated milling machine:

1. build a general purpose milling machine;
2. buy a special purpose numerically controlled milling machine; or
3. buy a general purpose milling machine.

Explorer Ltd. is a well-established company. The company was set up about 30 years ago by two brothers Dan and Kevin Thompson, in Huntsville, Ontario, to produce accessories for the automobile industry. The Central division continues to serve the auto industry, and is the largest division in the company with sales of $35 million annually. Dan’s son is now head of this division. Kevin is still active in the company and is the Chief Executive Officer (CEO). His office is located in Toronto.

The parts division supplies seals to the mining and petrochemical industry from a plant in Toronto. This division is only ten years old and until 2010 was highly profitable. As a result of the downturn in the sector of the economy, sales in 2012 were only $12 million.

The East division, located in Scarborough, is the engineering division. Full-time employees tend to work approximately 2,000 hours in the division. Regular product lines include industrial fans, industrial cooling units, and refrigeration units for industrial users. The division is highly capital-intensive and sales tend to be directly related to general economic conditions.

Each division runs independently and performance is based upon budgeted return on investment. Bonuses are paid if the budget target is achieved. Annually, each division prepares a detailed budget submission to Kevin, outlining expected profit performance and capital expenditure requests. The milling machine proposal is part of the capital expenditure request.

The 2013 pro forma income statement for East division is set out below:

Jason Connor has pointed out to Donovan that the existing machine is not only outdated but maintenance costs are becoming prohibitive. Jason also noted that maintenance costs of new general purpose machines are only $26,000 while special purpose machines can save an additional $14,000 in maintenance. Also there would be a significant savings in insurance as the price for a general purpose machine would drop to $3,000 while a special purpose machine would be 67% higher than the general purpose machine. The machine has no market or salvage value and he is sure that its book value is now zero. The trouble is that he doesn’t know which proposal is best for the company. In addition to the cost and revenue date provided, Connor provided comments on each alternative below:

1. Build a general purpose machine:
   • This machine can be built by East division. The division is below capacity at present as a major contract has just been completed. The division could thus produce the machine without affecting revenue-producing activity, but it will take six months to complete. The machine is expected to last five years and have no salvage value because removal costs will probably equal selling price.
   • Connor believes that the division has the technical expertise to undertake the work. In 2012, the division produced a specialized drilling machine that has proven very successful. Connor pointed out that David Williams, chief engineer, loves the design challenge of new machines. Donovan sat down with Connor and produced the following cost estimates:

   Material and parts	$55,000
   Direct labour (DL$)	$90,000
   Variable overhead (50% of DL$)	$45,000
   Fixed overhead (25% of DL$)	$22,500
   TOTAL	$212,500

   • Donovan argues that this job should also bear a proportion of administrative costs; she suggests $12,000.
2. Buy a special purpose machine:
   
   The advantage of this special purpose machine is that only one operator is required and output per hour could increase by 25%. In addition, maintenance costs are significantly reduced because microchip circuitry is employed.
   
   Connor points out that this machine is state-of-the-art and would probably mean that new work could be taken on. A numerically controlled machine required extensive training of operators. In total, 26 weeks are spent in the supplier’s factory located in Florida. While the training is going on, the supplier provides an operator to work the machine without charge. Expected costs of this training period including hotel, per diem, and travel will cost $3,000 per week, excluding the operator’s labour which is set at $15 per hour.
   
   The machine costs $625,000, and the supplier guarantees the salvage value of $25,000 at the end of five years. It is available immediately. It is estimated the machine can generate sales of $243,750 annually at full capacity and require $19,500 in direct materials cost. While the direct material costs are equivalent, the level of sales for the general purpose machine are $48,000 lower than the special purpose machine.
3. Buy a general purpose machine:
   
   The purchase price of this machine is $295,000 and cost levels associated with the machine are expected to be the same as the general purpose machine built by the company because the technology is similar. The salvage value of the machine net of removal costs, is estimated to be $5,000 in five years. It can be delivered immediately.

General comments

The required rate of return for this investment class has been set at 8% by Kevin Thompson.

Required

Prepare the budget submission to Kevin. .

dividually students will develop a formal response to the problem(s) posed in the case, addressing the following areas within the analysis, and using the same headings. (Numbers in brackets do not necessarily correspond to length but represent the weight that will be given to each section in the grading):

1. Issue Identification (5%): Identification of the problem/issue that must be resolved or decision that must be made. Phrase the problem/cause in the most succinct way possible. Think about:
   1. Differentiating the immediate from the basic problem
   2. The implications of the problem(s)
   3. Identifying the root cause of the problem(s)
   4. Determining the decision facing the key person(s)?
2. Identification of Key Success Factors (10%): Identify the company-specific factors in point form that are absolutely critical to the success of the organization. These are the factors that, if ignored, will mean the project will probably fail. Include the following considerations:
   1. What factors must be managed successfully for the company to prosper?
   2. Key success factors should reflect the top priorities of the organization in this particular case (eg., quality, productivity, low cost leader, etc.)
   3. These factors are part of the criteria against which you will evaluate solutions (along with basic criteria such as profit)
3. Identification of Alternatives (5%): Identify alternative solutions. Only deal with feasible alternatives. In the next three sections, analyse all alternatives against criteria set out in key success factors and basic requirements (eg., profitability).
4. Quantitative Analysis (40%): Push numbers in an analysis that is relevant to the issue at hand. Differentiate between what is relevant and what is irrelevant.
5. Qualitative Analysis (30%): Be sure to analyze qualitative issues – they need discussion in most cases. In particular, analyze alternatives in light of key success factors – will this alternative solve the problem and fit with our key success factors.
6. Recommendation on Course of Action (5%): State your recommendation. State briefly the justification for your recommended course of action. Make sure your recommendation flows out of your quantitative and qualitative analyses. Tie your recommendation back to the key success factors. The solution and implementation shout fit with problems and criteria identified above.
7. Circumvention of Potential Problems (5%): If there could be problems with your recommendations, state them. As well, suggest ways to overcome these problems – a contingency plan to address potential difficulties.

There is no set length to the report, but clear, succinct and concise language and organization will be considered favourably in the grade.

Students will submit the final report as a word document through the submission link below.

The Case

You are a Senior Consultant for the professional service firm, BUSI 2083 LLP. Your firm specializes in providing a wide variety of internal business solutions for different clients. It is your final week on the job and a Manager asks you for some help prior to your departure. Eager to leaving a lasting impression, you start reading the background information provided by the Manager.

Lesley Donovan is the controller for the East division of Explorer Ltd. Jason Conner, head of plant engineering, has just left Donovan’s office after presenting three alternatives for submission in the capital expenditure budget for the fiscal year 2014. The budget is due to the CEO in two days and therefore Donovan realizes that time is of the essence.

Conner has outlined the following alternatives to replace an outdated milling machine:

1. build a general purpose milling machine;
2. buy a special purpose numerically controlled milling machine; or
3. buy a general purpose milling machine.

Explorer Ltd. is a well-established company. The company was set up about 30 years ago by two brothers Dan and Kevin Thompson, in Huntsville, Ontario, to produce accessories for the automobile industry. The Central division continues to serve the auto industry, and is the largest division in the company with sales of $35 million annually. Dan’s son is now head of this division. Kevin is still active in the company and is the Chief Executive Officer (CEO). His office is located in Toronto.

The parts division supplies seals to the mining and petrochemical industry from a plant in Toronto. This division is only ten years old and until 2010 was highly profitable. As a result of the downturn in the sector of the economy, sales in 2012 were only $12 million.

The East division, located in Scarborough, is the engineering division. Full-time employees tend to work approximately 2,000 hours in the division. Regular product lines include industrial fans, industrial cooling units, and refrigeration units for industrial users. The division is highly capital-intensive and sales tend to be directly related to general economic conditions.

Each division runs independently and performance is based upon budgeted return on investment. Bonuses are paid if the budget target is achieved. Annually, each division prepares a detailed budget submission to Kevin, outlining expected profit performance and capital expenditure requests. The milling machine proposal is part of the capital expenditure request.

The 2013 pro forma income statement for East division is set out below:

Jason Connor has pointed out to Donovan that the existing machine is not only outdated but maintenance costs are becoming prohibitive. Jason also noted that maintenance costs of new general purpose machines are only $26,000 while special purpose machines can save an additional $14,000 in maintenance. Also there would be a significant savings in insurance as the price for a general purpose machine would drop to $3,000 while a special purpose machine would be 67% higher than the general purpose machine. The machine has no market or salvage value and he is sure that its book value is now zero. The trouble is that he doesn’t know which proposal is best for the company. In addition to the cost and revenue date provided, Connor provided comments on each alternative below:

1. Build a general purpose machine:
   • This machine can be built by East division. The division is below capacity at present as a major contract has just been completed. The division could thus produce the machine without affecting revenue-producing activity, but it will take six months to complete. The machine is expected to last five years and have no salvage value because removal costs will probably equal selling price.
   • Connor believes that the division has the technical expertise to undertake the work. In 2012, the division produced a specialized drilling machine that has proven very successful. Connor pointed out that David Williams, chief engineer, loves the design challenge of new machines. Donovan sat down with Connor and produced the following cost estimates:

   Material and parts	$55,000
   Direct labour (DL$)	$90,000
   Variable overhead (50% of DL$)	$45,000
   Fixed overhead (25% of DL$)	$22,500
   TOTAL	$212,500

   • Donovan argues that this job should also bear a proportion of administrative costs; she suggests $12,000.
2. Buy a special purpose machine:
   
   The advantage of this special purpose machine is that only one operator is required and output per hour could increase by 25%. In addition, maintenance costs are significantly reduced because microchip circuitry is employed.
   
   Connor points out that this machine is state-of-the-art and would probably mean that new work could be taken on. A numerically controlled machine required extensive training of operators. In total, 26 weeks are spent in the supplier’s factory located in Florida. While the training is going on, the supplier provides an operator to work the machine without charge. Expected costs of this training period including hotel, per diem, and travel will cost $3,000 per week, excluding the operator’s labour which is set at $15 per hour.
   
   The machine costs $625,000, and the supplier guarantees the salvage value of $25,000 at the end of five years. It is available immediately. It is estimated the machine can generate sales of $243,750 annually at full capacity and require $19,500 in direct materials cost. While the direct material costs are equivalent, the level of sales for the general purpose machine are $48,000 lower than the special purpose machine.
3. Buy a general purpose machine:
   
   The purchase price of this machine is $295,000 and cost levels associated with the machine are expected to be the same as the general purpose machine built by the company because the technology is similar. The salvage value of the machine net of removal costs, is estimated to be $5,000 in five years. It can be delivered immediately.

General comments

The required rate of return for this investment class has been set at 8% by Kevin Thompson.

Required

Prepare the budget submission to Kevin. Show your answers.

dividually students will develop a formal response to the problem(s) posed in the case, addressing the following areas within the analysis, and using the same headings. (Numbers in brackets do not necessarily correspond to length but represent the weight that will be given to each section in the grading):

1. Issue Identification (5%): Identification of the problem/issue that must be resolved or decision that must be made. Phrase the problem/cause in the most succinct way possible. Think about:
   1. Differentiating the immediate from the basic problem
   2. The implications of the problem(s)
   3. Identifying the root cause of the problem(s)
   4. Determining the decision facing the key person(s)?
2. Identification of Key Success Factors (10%): Identify the company-specific factors in point form that are absolutely critical to the success of the organization. These are the factors that, if ignored, will mean the project will probably fail. Include the following considerations:
   1. What factors must be managed successfully for the company to prosper?
   2. Key success factors should reflect the top priorities of the organization in this particular case (eg., quality, productivity, low cost leader, etc.)
   3. These factors are part of the criteria against which you will evaluate solutions (along with basic criteria such as profit)
3. Identification of Alternatives (5%): Identify alternative solutions. Only deal with feasible alternatives. In the next three sections, analyse all alternatives against criteria set out in key success factors and basic requirements (eg., profitability).
4. Quantitative Analysis (40%): Push numbers in an analysis that is relevant to the issue at hand. Differentiate between what is relevant and what is irrelevant.
5. Qualitative Analysis (30%): Be sure to analyze qualitative issues – they need discussion in most cases. In particular, analyze alternatives in light of key success factors – will this alternative solve the problem and fit with our key success factors.
6. Recommendation on Course of Action (5%): State your recommendation. State briefly the justification for your recommended course of action. Make sure your recommendation flows out of your quantitative and qualitative analyses. Tie your recommendation back to the key success factors. The solution and implementation shout fit with problems and criteria identified above.
7. Circumvention of Potential Problems (5%): If there could be problems with your recommendations, state them. As well, suggest ways to overcome these problems – a contingency plan to address potential difficulties.

There is no set length to the report, but clear, succinct and concise language and organization will be considered favourably in the grade.

Students will submit the final report as a word document through the submission link below.

The Case

You are a Senior Consultant for the professional service firm, BUSI 2083 LLP. Your firm specializes in providing a wide variety of internal business solutions for different clients. It is your final week on the job and a Manager asks you for some help prior to your departure. Eager to leaving a lasting impression, you start reading the background information provided by the Manager.

Lesley Donovan is the controller for the East division of Explorer Ltd. Jason Conner, head of plant engineering, has just left Donovan’s office after presenting three alternatives for submission in the capital expenditure budget for the fiscal year 2014. The budget is due to the CEO in two days and therefore Donovan realizes that time is of the essence.

Conner has outlined the following alternatives to replace an outdated milling machine:

1. build a general purpose milling machine;
2. buy a special purpose numerically controlled milling machine; or
3. buy a general purpose milling machine.

Explorer Ltd. is a well-established company. The company was set up about 30 years ago by two brothers Dan and Kevin Thompson, in Huntsville, Ontario, to produce accessories for the automobile industry. The Central division continues to serve the auto industry, and is the largest division in the company with sales of $35 million annually. Dan’s son is now head of this division. Kevin is still active in the company and is the Chief Executive Officer (CEO). His office is located in Toronto.

The parts division supplies seals to the mining and petrochemical industry from a plant in Toronto. This division is only ten years old and until 2010 was highly profitable. As a result of the downturn in the sector of the economy, sales in 2012 were only $12 million.

The East division, located in Scarborough, is the engineering division. Full-time employees tend to work approximately 2,000 hours in the division. Regular product lines include industrial fans, industrial cooling units, and refrigeration units for industrial users. The division is highly capital-intensive and sales tend to be directly related to general economic conditions.

Each division runs independently and performance is based upon budgeted return on investment. Bonuses are paid if the budget target is achieved. Annually, each division prepares a detailed budget submission to Kevin, outlining expected profit performance and capital expenditure requests. The milling machine proposal is part of the capital expenditure request.

The 2013 pro forma income statement for East division is set out below:

Jason Connor has pointed out to Donovan that the existing machine is not only outdated but maintenance costs are becoming prohibitive. Jason also noted that maintenance costs of new general purpose machines are only $26,000 while special purpose machines can save an additional $14,000 in maintenance. Also there would be a significant savings in insurance as the price for a general purpose machine would drop to $3,000 while a special purpose machine would be 67% higher than the general purpose machine. The machine has no market or salvage value and he is sure that its book value is now zero. The trouble is that he doesn’t know which proposal is best for the company. In addition to the cost and revenue date provided, Connor provided comments on each alternative below:

1. Build a general purpose machine:
   • This machine can be built by East division. The division is below capacity at present as a major contract has just been completed. The division could thus produce the machine without affecting revenue-producing activity, but it will take six months to complete. The machine is expected to last five years and have no salvage value because removal costs will probably equal selling price.
   • Connor believes that the division has the technical expertise to undertake the work. In 2012, the division produced a specialized drilling machine that has proven very successful. Connor pointed out that David Williams, chief engineer, loves the design challenge of new machines. Donovan sat down with Connor and produced the following cost estimates:

   Material and parts	$55,000
   Direct labour (DL$)	$90,000
   Variable overhead (50% of DL$)	$45,000
   Fixed overhead (25% of DL$)	$22,500
   TOTAL	$212,500

   • Donovan argues that this job should also bear a proportion of administrative costs; she suggests $12,000.
2. Buy a special purpose machine:
   
   The advantage of this special purpose machine is that only one operator is required and output per hour could increase by 25%. In addition, maintenance costs are significantly reduced because microchip circuitry is employed.
   
   Connor points out that this machine is state-of-the-art and would probably mean that new work could be taken on. A numerically controlled machine required extensive training of operators. In total, 26 weeks are spent in the supplier’s factory located in Florida. While the training is going on, the supplier provides an operator to work the machine without charge. Expected costs of this training period including hotel, per diem, and travel will cost $3,000 per week, excluding the operator’s labour which is set at $15 per hour.
   
   The machine costs $625,000, and the supplier guarantees the salvage value of $25,000 at the end of five years. It is available immediately. It is estimated the machine can generate sales of $243,750 annually at full capacity and require $19,500 in direct materials cost. While the direct material costs are equivalent, the level of sales for the general purpose machine are $48,000 lower than the special purpose machine.
3. Buy a general purpose machine:
   
   The purchase price of this machine is $295,000 and cost levels associated with the machine are expected to be the same as the general purpose machine built by the company because the technology is similar. The salvage value of the machine net of removal costs, is estimated to be $5,000 in five years. It can be delivered immediately.

General comments

The required rate of return for this investment class has been set at 8% by Kevin Thompson.

Required

Prepare the budget submission to Kevin. Show your answers.

dividually students will develop a formal response to the problem(s) posed in the case, addressing the following areas within the analysis, and using the same headings. (Numbers in brackets do not necessarily correspond to length but represent the weight that will be given to each section in the grading):

1. Issue Identification (5%): Identification of the problem/issue that must be resolved or decision that must be made. Phrase the problem/cause in the most succinct way possible. Think about:
   1. Differentiating the immediate from the basic problem
   2. The implications of the problem(s)
   3. Identifying the root cause of the problem(s)
   4. Determining the decision facing the key person(s)?
2. Identification of Key Success Factors (10%): Identify the company-specific factors in point form that are absolutely critical to the success of the organization. These are the factors that, if ignored, will mean the project will probably fail. Include the following considerations:
   1. What factors must be managed successfully for the company to prosper?
   2. Key success factors should reflect the top priorities of the organization in this particular case (eg., quality, productivity, low cost leader, etc.)
   3. These factors are part of the criteria against which you will evaluate solutions (along with basic criteria such as profit)
3. Identification of Alternatives (5%): Identify alternative solutions. Only deal with feasible alternatives. In the next three sections, analyse all alternatives against criteria set out in key success factors and basic requirements (eg., profitability).
4. Quantitative Analysis (40%): Push numbers in an analysis that is relevant to the issue at hand. Differentiate between what is relevant and what is irrelevant.
5. Qualitative Analysis (30%): Be sure to analyze qualitative issues – they need discussion in most cases. In particular, analyze alternatives in light of key success factors – will this alternative solve the problem and fit with our key success factors.
6. Recommendation on Course of Action (5%): State your recommendation. State briefly the justification for your recommended course of action. Make sure your recommendation flows out of your quantitative and qualitative analyses. Tie your recommendation back to the key success factors. The solution and implementation shout fit with problems and criteria identified above.
7. Circumvention of Potential Problems (5%): If there could be problems with your recommendations, state them. As well, suggest ways to overcome these problems – a contingency plan to address potential difficulties.

There is no set length to the report, but clear, succinct and concise language and organization will be considered favourably in the grade.

Students will submit the final report as a word document through the submission link below.

The Case

You are a Senior Consultant for the professional service firm, BUSI 2083 LLP. Your firm specializes in providing a wide variety of internal business solutions for different clients. It is your final week on the job and a Manager asks you for some help prior to your departure. Eager to leaving a lasting impression, you start reading the background information provided by the Manager.

Lesley Donovan is the controller for the East division of Explorer Ltd. Jason Conner, head of plant engineering, has just left Donovan’s office after presenting three alternatives for submission in the capital expenditure budget for the fiscal year 2014. The budget is due to the CEO in two days and therefore Donovan realizes that time is of the essence.

Conner has outlined the following alternatives to replace an outdated milling machine:

1. build a general purpose milling machine;
2. buy a special purpose numerically controlled milling machine; or
3. buy a general purpose milling machine.

Explorer Ltd. is a well-established company. The company was set up about 30 years ago by two brothers Dan and Kevin Thompson, in Huntsville, Ontario, to produce accessories for the automobile industry. The Central division continues to serve the auto industry, and is the largest division in the company with sales of $35 million annually. Dan’s son is now head of this division. Kevin is still active in the company and is the Chief Executive Officer (CEO). His office is located in Toronto.

The parts division supplies seals to the mining and petrochemical industry from a plant in Toronto. This division is only ten years old and until 2010 was highly profitable. As a result of the downturn in the sector of the economy, sales in 2012 were only $12 million.

The East division, located in Scarborough, is the engineering division. Full-time employees tend to work approximately 2,000 hours in the division. Regular product lines include industrial fans, industrial cooling units, and refrigeration units for industrial users. The division is highly capital-intensive and sales tend to be directly related to general economic conditions.

Each division runs independently and performance is based upon budgeted return on investment. Bonuses are paid if the budget target is achieved. Annually, each division prepares a detailed budget submission to Kevin, outlining expected profit performance and capital expenditure requests. The milling machine proposal is part of the capital expenditure request.

The 2013 pro forma income statement for East division is set out below:

Jason Connor has pointed out to Donovan that the existing machine is not only outdated but maintenance costs are becoming prohibitive. Jason also noted that maintenance costs of new general purpose machines are only $26,000 while special purpose machines can save an additional $14,000 in maintenance. Also there would be a significant savings in insurance as the price for a general purpose machine would drop to $3,000 while a special purpose machine would be 67% higher than the general purpose machine. The machine has no market or salvage value and he is sure that its book value is now zero. The trouble is that he doesn’t know which proposal is best for the company. In addition to the cost and revenue date provided, Connor provided comments on each alternative below:

1. Build a general purpose machine:
   • This machine can be built by East division. The division is below capacity at present as a major contract has just been completed. The division could thus produce the machine without affecting revenue-producing activity, but it will take six months to complete. The machine is expected to last five years and have no salvage value because removal costs will probably equal selling price.
   • Connor believes that the division has the technical expertise to undertake the work. In 2012, the division produced a specialized drilling machine that has proven very successful. Connor pointed out that David Williams, chief engineer, loves the design challenge of new machines. Donovan sat down with Connor and produced the following cost estimates:

   Material and parts	$55,000
   Direct labour (DL$)	$90,000
   Variable overhead (50% of DL$)	$45,000
   Fixed overhead (25% of DL$)	$22,500
   TOTAL	$212,500

   • Donovan argues that this job should also bear a proportion of administrative costs; she suggests $12,000.
2. Buy a special purpose machine:
   
   The advantage of this special purpose machine is that only one operator is required and output per hour could increase by 25%. In addition, maintenance costs are significantly reduced because microchip circuitry is employed.
   
   Connor points out that this machine is state-of-the-art and would probably mean that new work could be taken on. A numerically controlled machine required extensive training of operators. In total, 26 weeks are spent in the supplier’s factory located in Florida. While the training is going on, the supplier provides an operator to work the machine without charge. Expected costs of this training period including hotel, per diem, and travel will cost $3,000 per week, excluding the operator’s labour which is set at $15 per hour.
   
   The machine costs $625,000, and the supplier guarantees the salvage value of $25,000 at the end of five years. It is available immediately. It is estimated the machine can generate sales of $243,750 annually at full capacity and require $19,500 in direct materials cost. While the direct material costs are equivalent, the level of sales for the general purpose machine are $48,000 lower than the special purpose machine.
3. Buy a general purpose machine:
   
   The purchase price of this machine is $295,000 and cost levels associated with the machine are expected to be the same as the general purpose machine built by the company because the technology is similar. The salvage value of the machine net of removal costs, is estimated to be $5,000 in five years. It can be delivered immediately.

General comments

The required rate of return for this investment class has been set at 8% by Kevin Thompson.

Required

Prepare the budget submission to Kevin. .

Read the following passage, the speech by Pope Urban II calling for a crusade, and then answer the following questions:

​

- What is the reason for this crusade in his words and is therefore, what animated nearly 100,000 to cross Europe to take up arms.

​

-What is offered in return for action to those who follow the cross.

- Why would this be enough to sell off all you own, leave your families, and head off to possible death?

On November 27, 1095, Pope Urban II makes perhaps the most influential speech of the Middle Ages (Links to an external site.), giving rise to the Crusades (Links to an external site.) by calling all Christians in Europe to war against Muslims in order to reclaim the Holy Land, with a cry of “Deus vult!” or “God wills it!”

​

Oh, race of Franks, race from across the mountains, race chosen and beloved by God as shines forth in very many of your works set apart from all nations by the situation of your country, as well as by your catholic faith and the honor of the holy church! To you our discourse is addressed and for you our exhortation is intended. We wish you to know what a grievous cause has led us to Your country, what peril threatening you and all the faithful has brought us.

From the confines of Jerusalem and the city of Constantinople a horrible tale has gone forth and very frequently has been brought to our ears, namely, that a race from the kingdom of the Persians, an accursed race, a race utterly alienated from God, a generation forsooth which has not directed its heart and has not entrusted its spirit to God, has invaded the lands of those Christians and has depopulated them by the sword, pillage and fire; it has led away a part of the captives into its own country, and a part it has destroyed by cruel tortures; it has either entirely destroyed the churches of God or appropriated them for the rites of its own religion. They destroy the altars, after having defiled them with their uncleanness. They circumcise the Christians, and the blood of the circumcision they either spread upon the altars or pour into the vases of the baptismal font. When they wish to torture people by a base death, they perforate their navels, and dragging forth the extremity of the intestines, bind it to a stake; then with flogging they lead the victim around until the viscera having gushed forth the victim falls prostrate upon the ground. Others they bind to a post and pierce with arrows. Others they compel to extend their necks and then, attacking them with naked swords, attempt to cut through the neck with a single blow. What shall I say of the abominable rape of the women? To speak of it is worse than to be silent. The kingdom of the Greeks is now dismembered by them and deprived of territory so vast in extent that it cannot be traversed in a march of two months. On whom therefore is the labor of avenging these wrongs and of recovering this territory incumbent, if not upon you? You, upon whom above other nations God has conferred remarkable glory in arms, great courage, bodily activity, and strength to humble the hairy scalp of those who resist you.

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Let the deeds of your ancestors move you and incite your minds to manly achievements; the glory and greatness of king Charles the Great, and of his son Louis, and of your other kings, who have destroyed the kingdoms of the pagans, and have extended in these lands the territory of the holy church. Let the holy sepulcher of the Lord our Savior, which is possessed by unclean nations, especially incite you, and the holy places which are now treated with ignominy and irreverently polluted with their filthiness. Oh, most valiant soldiers and descendants of invincible ancestors, be not degenerate, but recall the valor of your progenitors.

But if you are hindered by love of children, parents and wives, remember what the Lord says in the Gospel, "He that loveth father or mother more than me, is not worthy of me." "Every one that hath forsaken houses, or brethren, or sisters, or father, or mother, or wife, or children, or lands for my name's sake shall receive an hundredfold and shall inherit everlasting life." Let none of your possessions detain you, no solicitude for your family affairs, since this land which you inhabit, shut in on all sides by the seas and surrounded by the mountain peaks, is too narrow for your large population; nor does it abound in wealth; and it furnishes scarcely food enough for its cultivators. Hence it is that you murder one another, that you wage war, and that frequently you perish by mutual wounds. Let therefore hatred depart from among you, let your quarrels end, let wars cease, and let all dissensions and controversies slumber. Enter upon the road to the Holy Sepulcher; wrest that land from the wicked race, and subject it to yourselves. That land which as the Scripture says "floweth with milk and honey," was given by God into the possession of the children of Israel Jerusalem is the navel of the world; the land is fruitful above others, like another paradise of delights. This the Redeemer of the human race has made illustrious by His advent, has beautified by residence, has consecrated by suffering, has redeemed by death, has glorified by burial. This royal city, therefore, situated at the centre of the world, is now held captive by His enemies, and is in subjection to those who do not know God, to the worship of the heathens. She seeks therefore and desires to be liberated, and does not cease to implore you to come to her aid. From you especially she asks succor, because, as we have already said, God has conferred upon you above all nations great glory in arms. Accordingly undertake this journey for the remission of your sins, with the assurance of the imperishable glory of the kingdom of heaven.

When Pope Urban had said these and very many similar things in his urbane discourse, he so influenced to one purpose the desires of all who were present, that they cried out, "It is the will of God! It is the will of God!" When the venerable Roman pontiff heard that, with eyes uplifted to heaven he gave thanks to God and, with his hand commanding silence, said:

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Most beloved brethren, today is manifest in you what the Lord says in the Gospel, "Where two or three are gathered together in my name there am I in the midst of them." Unless the Lord God had been present in your spirits, all of you would not have uttered the same cry. For, although the cry issued from numerous mouths, yet the origin of the cry was one. Therefore I say to you that God, who implanted this in your breasts, has drawn it forth from you. Let this then be your war-cry in combats, because this word is given to you by God. When an armed attack is made upon the enemy, let this one cry be raised by all the soldiers of God: It is the will of God! It is the will of God!

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And we do not command or advise that the old or feeble, or those unfit for bearing arms, undertake this journey; nor ought women to set out at all, without their husbands or brothers or legal guardians. For such are more of a hindrance than aid, more of a burden than advantage. Let the rich aid the needy; and according to their wealth, let them take with them experienced soldiers. The priests and clerks of any order are not to go without the consent of their bishop; for this journey would profit them nothing if they went without permission of these. Also, it is not fitting that laymen should enter upon the pilgrimage without the blessing of their priests.

Whoever, therefore, shall determine upon this holy pilgrimage and shall make his vow to God to that effect and shall offer himself to Him as a, living sacrifice, holy, acceptable unto God, shall wear the sign of the cross of the Lord on his forehead or on his breast. When,' truly',' having fulfilled his vow be wishes to return, let him place the cross on his back between his shoulders. Such, indeed, by the twofold action will fulfill the precept of the Lord, as He commands in the Gospel, "He that taketh not his cross and followeth after me, is not worthy of me."

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Source: Dana C. Munro, "Urban and the Crusaders", Translations and Reprints from the Original Sources of European History, Vol 1:2, (Philadelphia: University of Pennsylvania, 1895), 5-8