1. Alan owes Brian HK$5,000, which is due on 31 March. On 15 March, he sought Brian’s consent to accept a lesser sum of US$600 on 24 March (i.e., one week in advance of the due date) to discharge the whole debt. Brian agreed to this arrangement. Alan then made a bank loan of US$600 at an annual interest rate of 5% with a view to paying Brian. Today is 24 March, Brian has now changed his mind. He insists to revert to the previous position of full payment HK$5,000 to be paid on 31 March. Advise Alan if his part payment is able to discharge the whole debt in such case. [ Discuss the doctrine of promissory estoppel.]

2       Milky entered into a contract for the hire of 6 rooms in New Castle Hotel in    Kowloon West. The purpose of the contract was to watch the fireworks gala in the Victoria Harbour on the 1st July (Reunification Day) through the windows of the rooms. Milky planned to invite her close friends and their families to stay in the 6 rooms to enjoy the fireworks. Just two hours before start of the fireworks, the Hong Kong Police Force received a serious threat from some terrorist organizations that they would launch large scale attack to the crowds who gathered to watch the fireworks. The Hong Kong Government immediate ordered the cancellation of the fireworks and gave an order that this kind of gala will not be launched at least for five years. Milky, having already paid a deposit, refused to pay the balance of the room charges. The hotel took legal action to recover the balance.

Required:

Analyse the chance of success by the hotel and explain in detail the legal principles that you base on for analysis.

3      Devil Computers Ltd (DCL) produces hard disks for installing in computers. The Hong Kong Land Bank (HKLB) would like to purchase new computers for its new computer room situate at the fourth floor of its headquarters in Homantin. HKLB asked DCL for their hard disks which could survive in good conditions for at least 3 years. DCL sold some of their “long life” hard disks to HKLB.

         In fact, the “long life” hard disks only survived for 6 months and the staff of HKLB complained about the performance and quality of the hard disks.

Required:

Advise whether HKLB could claim damages and repudiate the contract of sale with DCL under the provisions of the Sale of Goods Ordinance. Detail explanation of that specific provision is necessary.     

Please answer questions 2 through 7

1. A deli raises the price of its deluxe cheeseburger from $9.50 to $10.50. The quantity sold falls from 125/day to 100/day. Calculate the arc price elasticity of demand.

2. Given your answer to (1), and given that the marginal cost of is $5, should the restaurant raise or lower its price of its deluxe cheeseburger to increase profits?

3. AutoClean does car detailing for $80 per car. Market research indicates that if the price was increased to $105 quantity demanded would fall to zero. Assuming that demand can be modeled with a linear demand curve, estimate the price elasticity of demand at $80.

4. The only thing that changes in Dullsville is the price of a stay at the Dullsville Inn. You've collected the following data on the rates charged (for a suite with 2 queen-sized beds and 'free' continental breakfast) and the number of rooms occupied. The Inn has 100 suites, and at no time were potential visitors turned away due to no vacancy. Use this data to estimate a 'constant elasticity' demand function. Estimate the price elasticity of demand.

Observation Rate per night Quantity (rooms rented)

1 $70 40

2 $65 50

3 $80 30

4 $52 62

5 $92 31

6 $64 41

7 $43 78

8 $74 35

9 $83 33

10 $54 52

11 $87 30

12 $84 28

13 $68 40

14 $43 69

15 $48 53

16 $78 34

17 $72 48

18 $58 53

19 $56 59

5 - 7. Next door to the Dullsville Inn is the Vagabond Hotel. Their rate for a single room is $50/night, with an average of 60 rooms occupied per night. Assume that the industry norm for the price elasticity of demand for hotels like the Vagabond Hotel is -1.6. Further assume that the demand function is reasonably approximated with a constant-price elasticity of demand functional form: Q = aP^b, where b is the price elasticity of demand.

5. Use the above information to calculate the value for 'a.'

6. Use the resulting demand function to estimate the number of rooms occupied if the price was increased to $60/night.

7. The marginal cost of providing a room at the Vagabond Hotel is $20. Use the markup rule for profit maximization to calculate the profit maximizing rate.

Said Al Hamli and his friend Khaled Al Masri are the owners of a small hotel, the Sun Star, in the Red Sea town of Hurghada. Close to Cairo, the resort town has grown from a fishing village to one of Egypt’s famous vacation spots. Hurghada is the gateway to many small islands and offshore reefs favored by recreational snorkelers and divers and many tourists combine their stay with excursions to the Nile Valley, the Great Pyramids and Luxor.

To take advantage of the growing numbers of tourists, particularly from Europe and the Middle East, Said and Khaled are planning to double the room capacity of their hotel by adding a second building to the already existing structure. Fortunately, Said recognized the great potential of Hurghada ten years ago, well before the town became a hub for recreational tourism, and bought the land adjacent to the hotel for relatively little money when it was still under construction.

Now, Said and Khaled are studying the new layout and trying to determine if the expected revenues justify the substantial initial investment of EGP 70 million ($11.8 million). According to their calculations, operating cost would rise by EGP 23.8 million ($4 million) in the first year, which would include hiring and training of new personnel, maintenance of facilities and equipment etc., and likely increase by about 5 percent per year thereafter. With an aggressive marketing strategy, Said and Khaled believe that a revenue enhancement of EGP 20.8 million in the first year is realistic and that a subsequent annual increase of about 15 percent for eight to nine years, with revenues leveling off thereafter, can be achieved. Ideally, Khaled would like to retire in ten years. Seeking advice from you, a knowledgeable friend, they share their detailed cost and revenue projections with you.

QUESTIONS

The Sai Kung Inn is a small family-run hotel in the New Territories. As a family-owned business, it relies mainly on traveler recommendations and on visitors to local Sai Kung residents. In particular, it ranks in the top 10% of TripAdvisor’s accommodations in Sai Kung. The Sai Kung Inn has 12 guest rooms, and to keep the operation running efficiently it employs two full-time reception staff, and three morning housekeeping staff.

Winnie is the hotel manager and the daughter of the property owner. She is considering to adopt a balanced scorecard approach for performance evaluation. She has identified a number of potential performance measures:

1. 1) Number of items on hotel restaurant menu

2. 2) Revenue

3. 3) Percentage of reception staff completing hospitality and customer satisfaction course

4. 4) Customer satisfaction with dining options

5. 5) Average percentage occupancy

6. 6) Number of restaurant staff completing cooking training courses

7. 7) Percentage of cleaning staff completing housekeeping and hygiene courses

8. 8) Average TripAdvisor rating

9. 9) Number of guest complaints about room cleanliness

10. 10) Average number of minutes taken to process guests’ check-in

11. 11) Total profits

12. 12) Frequency and quality of room cleaning

Required:

1. (a) Using the 12 performance measures suggested above, draw a balanced scorecard diagram for The Sai Kung Inn with the four main categories of the balanced scorecard, classifying each of the performance measures into one of the four categories. Draw arrows between individual performance measures to show causal links and indicate with a “+” or “–” whether the performance measure should increase or decrease.

2. (b) Winnie believes that The Sai Kung Inn’s occupancy rate is lower than her competitors because The Sai Kung Inn charges slightly higher prices and does not attract guests who prefer cheaper accommodation. Winnie believes that in order to improve the financial performance of The Sai Kung Inn, the company should focus on improving customer satisfaction to justify higher prices, instead of reducing costs to compete on price. She would like to improve the rank on TripAdvisor to be the top-rated accommodation in Sai Kung, by focusing on operational and staff improvements. Help Winnie develop two new performance measures to build into her balanced scorecard. For each performance measure you suggest, identify which category it would fit into, how to measure it, and how it relates to the organization goal.

Q-1

# of workers   Output (flags(

0 0

1         50

2       110

3 180

4 260

5            350

The table shows the number of flags that can be made per month depending on the number of workers at Acme Flag Company. Does the Acme Flag Company experience the law of diminishing returns in the table above?

Q-2

The major characteristic of a monopoly is

Q-3

Ceteris paribus, the demand curve faced by a firm that is a monopoly will be ______the demand curve faced by a firm in perfect competition.

Q-4

As output increases, marginal cost

Q-5

   # of workers   Output (flags)

      0    0

1     50

2 110

  3    180

4 260

3    350

The table shows the number of flags that can be made per month depending on the number of workers at Acme Flag Company. The price that Acme can charge for flags is $20. What is the average product of the 4th worker?

Q-7

Long-run competitive equilibrium implies that

Q-9

Which of the following statement is true?

Q-11

A price ceiling _______ output and ________ price in a monopoly market.

Q-13

Economic theory suggests that a monopoly is the best form of business organization when

Q-15

If a local movie theater is a monopolist, price discrimination means that;

Q-16

Monopolies generally offer consumers ___ and ____ than competitive firms.

Q-16

f output changes in fixed proportion to a change in all of a firm's productive resources, the firm has

Q-17

Profits for the profit maximizing monopolist will equal

Q-18

Unlike a firm in perfect competition, a monopolist may be able to

20

he point of diminishing returns occur at the point where

Demand can be estimated with experimental data, time-series data, or cross-section data. In this case, cross-section data appear in the Excel file. Soft drink consumption in cans per capita per year is related to six-pack price, income per capita, and mean temperature across the 48 contiguous states in the United States.

QUESTIONS 1. Given the data, please construct the demand estimation for soft drink consumption in the United States by

(1) a multiple-linear regression equation and

(2) a log-linear (exponential) regression equation

2. Given the MS Excel output in Question 1, please compare the two regression equations’ coefficient of determination (R-square), F-test and t-test. Which equation is a good (better) fit? Which equation shows the stronger overall significance to predict the future demand? Which equation will you choose as a better estimation for quantity demanded? Which equation will you choose as a better estimation for elasticities? Explain your answer in the language of statistics.

Before reading Detroit's Forgotten History by Bill McGraw, I had no idea that slavery occurred anywhere in Michigan, especially in Detroit. From middle school to high school, I learned a good amount of knowledge on slavery, but I was led to believe that slavery only occurred in Southern states. And for the southern states still having slavery this resulted in the Civil War. Thinking about it now, my best knowledge of slavery are the events that occurred because of it, instead of slavery itself. For example, the Underground Railroad was taught heavily in school, while the direct subject of slavery wasn't. This is very surprising since the magnitude slavery has on United States's history. Education system neglected teaching the harsh, violent riots of slavery but focused more on uprising events like the Underground railroad. Now events like the Underground railroad deserve recognition, but at the same time we shouldn't shy away from the harsh, violent acts these innocent people endured. Living near Detroit my whole life, and not knowing that slavery played a huge role in the foundation of Detroit is very disappointing. I entirely agree with McGraw's statement that: "Local students learn about the Underground Railroad in school, but Detroit’s slave history is rarely taught.”? In the , Underground Railroad and Violence by Roy E. Finkenbine, Finkenbine addresses the violence that occurred against free black people after the Civil War. Violence was used against African Americans to make them leave or even die. Free blacks from the south and north made their way to the east side of Detroit to live in the neighborhoods. This obviously provoking the fellow neighbors in these neighborhoods, violence then would break out. These acts of violence were meant to push the free slaves away but instead it did the opposite. These free slaves were so desperate and determined to stay free that they were willing to return the violence back. Members of the African American community and some white allies fought back to protect the free slaves wanting to stay free (Finkenbine pg. 23). The law that played a significant role in the uprisings and violence described by Finkenbine was the Fugitive Slave Act of 1793. Violence erupted during this act because slave owners were able to track any of their runaway slaves in the United States. This act did nothing but create more violence because these free slaves were tired of the hardship, so they were going to fight back to live a free life. “Slavery is the ground zero of race relations.” This is an extremely heavy and true statement. After the black community were free by slavery, they were still not accepted in America. With Jim Crow laws and other acts against the black community, the fight was still not over. African Americans had to face the fact that slavery was just the first battle. More racial situations and acts were coming toward them and even this day we see it. Still today racial altercations occur frequently in America and it is just saddening. Noticing the lack of progress this country has made toward this dilemma is truly depressing. As a nation we still can't look or treat people the same, and having to go back to racial objections is horrifying. Taking more action and to keep fighting this oppression is the best way to move forward. Slavery will never be forgotten as a historical period, but not improving from it could be even worse and unforgettable as history goes on.

reply to this comment by discussing and agreeing the topic mentioned, please.

First, BICA is considering the purchase of the Empty Arms hotel. Next year's NOI and cash flow is expected to be $2,000,000 and BIC's economic forecast of market supply and demand and vacancy levels indicated they will continue to be in balance. As a result NOI should increase by 1.5 percent each year based upon expected capital improvements, and BIC believes they should earn 9% total return on the investment.

What is the estimated value of the property?

What cap rate should be found from recently sold properties that are comparable to Empty Arms? NOTE how the cap rate reflects the growth in NOI.

Should they purchase this investment if the negotiated asking price is $27M?

Round Tree Manor is a hotel that provides two types of rooms with three rental classes: Super Saver, Deluxe, and Business. The profit per night for each type of room and rental class is as follows:

Type I rooms do not have wireless Internet access and are not available for the Business rental class.

Round Tree's management makes a forecast of the demand by rental class for each night in the future. A linear programming model developed to maximize profit is used to determine how many reservations to accept for each rental class. The demand forecast for a particular night is 140 rentals in the Super Saver class, 60 rentals in the Deluxe class, and 40 rentals in the Business class. Round Tree has 125 Type I rooms and 135 Type II rooms.

1. Use linear programming to determine how many reservations to accept in each rental class and how the reservations should be allocated to room types.
   

   Variable	# of reservations
   SuperSaver rentals allocated to room type I
   SuperSaver rentals allocated to room type II
   Deluxe rentals allocated to room type I
   Deluxe rentals allocated to room type II
   Business rentals allocated to room type II

   
   Is the demand by any rental class not satisfied?

Round Tree Manor is a hotel that provides two types of rooms with three rental classes: Super Saver, Deluxe, and Business. The profit per night for each type of room and rental class is as follows: Rental Class Super Saver Deluxe Business Type I $30 $35 -- Room Type II $20 $30 $40 Type I rooms do not have Internet access and are not available for the Business rental class. Round Tree’s management makes a forecast of the demand by rental class for each night in the future. A linear programming model developed to maximize profit is used to determine how many reservations to accept for each rental class. The demand forecast for a particular night is 130 rentals in the Super Saver class, 60 rentals in the Deluxe class, and 50 rentals in the Business class. Round Tree has 100 Type I rooms and 120 Type II rooms.

Use linear programming to determine how many reservations to accept in each rental class and how the reservations should be allocated to room types. Summarize the model in algebraic form by defining the decision variables, the objective function and all the constraints.