Heavy Keele Ltd. (HK) has a long-standing reputation as a manufacturer of quality sailboats. HK currently produces two different models of sailboat from a single production facility — the HK41 and the HK49. The past several years have seen a 25% decline in demand for HK’s sailboats and a significant increase in interest within the boating community for motor vessels. Given this shift in attitudes, HK is now considering a proposal to introduce a motor vessel into its product line — the HKMV55.

If the proposal is accepted, senior management has decided to restructure the firm into two separate divisions for operational purposes — the Sailboat division and the Motor Vessel division. Under the proposal, all current personnel will remain with the Sailboat division and the senior management team will remain unchanged. For accounting purposes, however, the $2 million annual cost of the senior management team will be allocated equally between the two divisions. HK will then seek an entire new management team to oversee the Motor Vessel division. Management has also decided that the new division should operate out of its own production facility. It can be built on the block of land adjacent to the current facility that HK already owns.

Senior management has decided that the appropriate planning horizon for the proposed new Motor Vessel division is 10 years. You work in the controller’s office of HK and have been asked to perform a series of analyses on this proposal. To facilitate your analysis, you have been provided with the Motor Vessel division’s projected income statements over the next 10 years, as well as the following information.

Capital expenditures

• The block of land on which the new production facility will be built was purchased by HK three years ago at a cost of $2.5 million. It has a current market value of $3 million, and it is expected that the value of the land will remain at $3 million when the project is complete.

• Management expects that the production facility will cost $10 million to build. It has an estimated useful life of 20 years and will be depreciated on a straight-line basis to an estimated salvage value of $1 million for accounting purposes. It belongs to an asset class with a CCA rate of 7.5%. At the end of the 10-year planning horizon, the facility will have an estimated market value of $3 million. The building qualifies for the Accelerated Investment Incentive, and 1.5 times the CCA can be taken in the year of acquisition. At the end of the planning horizon, assume that there is still a positive balance remaining in the class after the deduction of the proceeds.

• The new equipment required for the production of the HKMV55 will cost $7 million and has an estimated useful life of 10 years. For accounting purposes, this equipment will also be depreciated on a straight-line basis. It belongs to an asset class with a CCA rate of 10% and has an estimated salvage value of $500,000 at the end of its useful life. The equipment qualifies for the Accelerated Investment Incentive, and 1.5 times the CCA can be taken in the year of acquisition. At the end Corporate Finance Project Details 2 / 3 of the planning horizon, assume that there is still a positive balance remaining in the class after the deduction of the proceeds.

• The new Motor Vessel division requires an initial investment in net working capital of $750,000.

Operating revenues and expenses, and working capital accounts

• Data from the divisional pro forma operating income statements (see Appendix):

o Gross revenues are projected to be $12.5 million in the first three years of operation and $18 million from Year 4 onward.

o Cost of goods sold (COGS) is expected to be 56% of sales in the first three years and then decline to 50% of sales from Year 4 onward.

o The general and administrative costs are expected to be constant at $2.95 million per year over the 10-year planning horizon. Administrative costs include the allocation of senior management costs; the remainder of these costs relate directly to the new Motor Vessel division and are paid in cash when due.

• HK requires its customers to make a 15% deposit at the time of order and pay the balance at the time of delivery. The average lag between the time of order and delivery is two months. Sales occur uniformly throughout the year.

• HK has a policy of keeping a cash balance throughout the year equal to 2.5% of expected sales for the year, and an inventory balance throughout the year equal to 25% of expected COGS for the year. The cash balance is essentially funded by the required customer deposits and is invested in marketable securities at an average rate of 0.5%.

• HK’s suppliers currently offer terms of 1/10, net 60 on all purchases.

Capital structure

• HK’s capital structure consists of a single long-term debt issue with a face value of $20 million and 2 million common shares with a current market price of $15 per share.

• The long-term debt issue carries a coupon rate of 5% with interest paid semiannually. It has eight years remaining until maturity and a current market yield of 6%, also based on semi-annual compounding.

• The common shares have a beta of 1.15. HK paid a dividend of $0.95 per share in its most recently completed financial year. Analysts believe these dividends will grow at an average annual rate of 3% for the foreseeable future. The current risk-free interest rate is 2.5%, and the market price of risk is 6%.

• Recent discussions with HK’s investment banker have indicated that flotation costs would be 7% before tax on any new issue of common shares and 4% after tax on any new issue of long-term debt. Corporate Finance Project Details 3 / 3 General corporate information

• HK’s corporate tax rate is 32%.

• Senior management has determined that 12% is the appropriate discount rate to use in evaluating the proposal to expand its operations to motor vessels.

Question 7

If a market is informationally efficient, should it respond to an announcement of HK’s intention to expand into the motor vessel market, and if so, how should it respond?

Question 8

The financial executive has three fundamental roles. Use the details of HK’s proposal to illustrate each of these three roles.

Question 9

The two primary alternatives to the NPV method for evaluating investment projects are the internal rate of return (IRR) method and the payback period (PBP) method.

a) Describe the IRR method and the PBP method.

b) Identify one advantage and one disadvantage each for the IRR method and the PBP method.

c) Which of the three capital budgeting methods — NPV, IRR, and PBP — is conceptually preferable? Explain why.

Lack of sleep puts you at higher risk for colds, first experimental study finds By Hanae ArmitageSep. 1, 2015, 11:00 AM Moms and sleep researchers alike have stressed the importance of solid shuteye for years, especially when it comes to fighting off the common cold. Their stance is a sensible one—skimping on sleep weakens the body’s natural defense system, leaving it more vulnerable to viruses. But the connection relied largely on self-reported, subjective surveys—until now. For the first time, a team of scientists reports that they have locked down the link experimentally, showing that sleep-deprived individuals are more than four times more likely to catch a cold than those who are well-rested.

“It’s very nice to see an experiment looking at sleep as an important regulator for specific antiviral immune responses,” says Michael Irwin, a psychoneuroimmunologist at University of California (UC), Los Angeles, who is not involved with the study. “In this particular case, there’s a hard clinical outcome showing [sleep deprivation] and susceptibility to the common cold.”

In a carefully controlled two-part experiment, scientists began by collecting nightly sleep data on 164 healthy individuals for 1 week. Participants were asked to record the times at which they went to bed and woke up. They also wore small watchlike devices that use a technique called wrist actigraphy to monitor movement (much like a Fitbit tracks activity) while they slept. Aric Prather, lead author of the study and a sleep researcher at UC San Francisco, says that he and his colleagues associate the wrist actigraphy data with being awake—if during a reported sleep period, the wrist band records movement, they take that as an indication of wakefulness, and subtract the time spent moving from the hours asleep.

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Then came part two: the cold infections. Scientists quarantined participants in a hotel and gave them nose drops containing rhinovirus—the virus responsible for the common cold. They then closed off the hotel floor for 5 days, letting the hosts’ immune system do the rest. To ensure the most accurate results, researchers drew participants’ blood before the viral exposure to test for levels of rhinovirus antibody, a defensive agent in the immune system that recognizes and attacks rhinovirus. If they found high, preexisting levels of the protective protein, they removed the participant from the study so that prior immunity would not bias the infection rates of the group.

In order to officially register as “sick,” participants had to exhibit one “objective sign of illness” and one other immune response. Signs of illness revolved around mucus production. After viral exposure, scientists collected used tissues daily and, essentially, weighed the snot. Ten grams or more counted as a sign of illness. They also looked at congestion. The researchers dripped a harmless dye into participants’ noses and waited to see how long it took to reach the back of their throats; longer than 35 minutes tallied as a sign of illness. Valid immune response required one of two things: A mucus sample flushed from a participant’s nasal passage had to show signs of viral replication or blood work needed to show new levels of the rhinovirus-fighting antibody.

Of the 164 participants, 124 received the actual virus instead of the control, and 48 of them got sick. By checking the sleep duration of the sick participants, researchers report in the current issue of SLEEP that individuals who slept fewer than 5 hours a night were 4.5 times more likely to get sick than those who slept 7 hours or more. Those who slept 5 to 6 hours were 4.2 times more likely to get sick, but those who slept 6 to 7 hours per night were at no greater risk of catching a cold than those who slept 7 hours or more, suggesting that there’s a sleep threshold for potent immune defense.

“Sleep often takes a back seat to other health behaviors like nutrition and exercise,” Prather says. “I think this [experiment] provides some really clear evidence for those people who get less than 5 or 6 hours of sleep—there really is a clear biological cost.”

The question Is as follows:

What broad question is being addressed by the study?

• To what populations(s) does the question apply?

• Is the study experimental or observational?

• For an experimental study, what are the treatments and outcomes?

• What are the relevant variables in the study?

• What is the size of the sample in the study?

• How were the subjects in the sample selected?

• What are the parameters (means or proportions) of interest?

• What values of statistics (means or proportions) are reported?

• What are some interesting strengths or weaknesses of the study?

• What are the conclusions of the study and why?

Negotiation - CASE STUDY: HOW GIVING FACE CAN BREW SUCCESS

• What does the below case study teach us about entrapment?

Overview

Peter Benjamin, the owner of an Australian chemical engineering consultancy, has a warning for those wanting to do business in China: “Many Chinese see it as their patriotic duty to shoot down foreigners, so you can be like a clay pigeon at target practice.” Despite this, Benjamin has been successful in China and is responsible for the design of many of the country’s modern breweries. He was invited to submit a proposal for a huge Guangdong brewery by Dr. Pasteur Lai, the son of a former Chinese minister of health and now an Australian citizen. Lai had many connections deep within the Chinese government, had done his homework on Benjamin, and was able to report to the Chinese that Benjamin was the premier brewery designer and builder in Australia.

The Scene

Benjamin was initially cynical. “We get a lot of ‘tire kickers’ in this business—people who aren’t serious about a project but just want to test the waters,” he explained. Benjamin sent the Chinese a questionnaire, asking for information about specifications, resources, brewery capacity, products they planned to produce, budget, and business plans. The response he received convinced him to head to China to discuss a potential deal to build Guangdong province’s largest brewery— a $20 million project. But, having heard from others about their China experiences, he decided to pitch only for the business in which his company had special technology to offer. “One of the first things you need to understand about China is that you can’t compete against cheap, local rivals,” he advises. “The Chinese only want foreigners involved if we can offer special technology they can’t get at home. We knew if the Chinese could have got locally what we offered, they would not have approached us.”

Preparing to Negotiate

In the lead up to the negotiations, Benjamin knew his business could provide strengths the Chinese business lacked. He had access to technology that could increase the capacity of the planned brewery while also reducing waste. He specialized in understanding and predicting market trends and had access to sophisticated, international market data the Chinese company lacked. The Chinese party had no experience in designing breweries whereas, since 1983, Benjamin had built or redesigned all Australia’s major breweries and most of its boutique breweries. Before starting negotiations, he did extensive research on the Chinese market, including its beer industry and the Guangzhou company. He found that, despite the company’s listing on the Shanghai Stock Exchange, it had direct links to the Chinese government. “If you’re working with a brewery in China, you’re working with the government, because the industry is so tightly regulated. I also found that the government department in charge of the alcohol industry is run by ex–Red Guards, so I knew I was dealing with people who had to report back to important government figures. I thought that, if I could find ways to make them look good in the eyes of their bosses, it would help in developing a beneficial business relationship,” he said. When Benjamin arrived in China, he discovered that the Chinese were also talking to German, French, and Belgian companies, and that the Chinese company’s plans for the brewery were not as well defined as had initially appeared. “I decided my job was to be the expert, and I knew I should tell them what they needed, rather than let them tell me. It was clear they knew nothing about designing breweries.” Benjamin also understood the sensitivities in pointing out the shortcomings of the Chinese plans. He had spoken with Chinese Australians (including two on his staff who had become the key members of his team in China) and read widely on Chinese culture, so he recognized the risk of causing the Chinese to lose face. To avoid doing so, he offered to work with the Chinese on developing the competitive brief using the latest technology. This would allow him to begin building relationships with the Chinese before the tendering process had begun. It would also give the Chinese lead negotiator face with his bosses (and the Chinese government officials), as he would be able to develop a better business brief using foreign technology. It also gave Benjamin’s business a head start in the tender competition.

Uncommon Tactics

“Before tendering began, we were working with the client to develop the brief while the other companies were sitting around,” he said. The Chinese arranged the accommodation for the tendering companies. Each foreign team—the French, Germans, Belgians, and Australians—was lodged by the Guangdong government at the same hotel. “We would go and have a meeting with the Chinese. When we got back to the hotel, the other businesses would always be waiting in the lobby to be picked up for their meetings. It was made pretty clear that we were competing against each other,” Benjamin said. Working in such a specialized field— brewery design—meant that the foreign negotiating teams knew each other, and they used this to their advantage. “We knew the Chinese were trying to pit us against each other, so we turned their tactic around. We met every afternoon in the hotel bar and compared notes. We could then work out together whether this negotiation was about price, technology, reputation, or some other driver. Of course it was about price and technology—it always is,” he said.

The negotiations took place over several weeks, during which each of the foreign companies met with the Chinese team almost daily. “We talked about the price and technology constantly. We were always discussing the scope of the project, to fit it in with a budget with which they were happy, but which still delivered excellent technology. There were perhaps thirty Chinese, and every time we met, there would be different people talking. You’d think you had an agreement, and then one of the Chinese would suddenly pull you aside and tell you the complete opposite. It was very confusing.”

Shoring Up Advantage

To ensure he was not misunderstanding the negotiations, which were being conducted through an interpreter with the Chinese team, Benjamin had brought from Australia two of his China-born staff—a chemical engineer and an accountant. “I decided I needed to use my two Chinese team members as my interpreters, because the Chinese language is often not explicit: The meaning of what they were saying was often only implied. It was the best decision I made, because I got the chance to log onto real feedback.” Benjamin also began to see the language barrier as an advantage. “Not knowing the language gave me carte blanche to completely change my mind on things I already had said, because I could use the excuse that I had not properly understood. They kept changing the negotiations on me, so it gave me the chance to do the same back and get away with it.” Benjamin had great respect for his competitors. They were professional managers, corporate people. But they also had superior attitudes toward the Chinese, and indeed also toward Benjamin and Australia. They refused to believe that a worldclass brewery designer could be found in Australia. After several weeks, the French and Belgian businesses pulled out, frustrated at the drawn-out negotiating process. They had offered their best price when first challenged and had left themselves no room to maneuver. Between them, the French and Belgian negotiators had two other problems. First, they were both professional managers involved in a number of projects, so it was easy for them to give up and go home to take up other projects waiting on their desks. Second, no one on the French team liked Chinese cuisine, so returning home looked very attractive to them. Benjamin, however, was a specialist chemical engineer who owned his own business, had already invested $350,000 in preparation, and was not inclined to walk away.

Patience Pays

“I went in suspecting we were going to spend ninety percent of the time arguing price, particularly since the Chinese started negotiating by crying poor. They kept saying they had a limited budget, so I started high and kept shaving off the smallest amount, but never near my limit. I knew from my initial questionnaire and research they could afford to pay what the technology and I were worth. Even though this represented a great opportunity to enter the Chinese market, I also needed to get properly rewarded,” he explained. “When I first got to China I was told of a Chinese saying—‘China has 5,000 years of history, so what’s an extra hundred years?’ This basically means that they are patient and will wait for the right deal. We had invested a lot of money to go to China, and we were not about to turn around and come home just because it was taking longer than we wanted.” The Chinese team tried to use Benjamin’s planned return date as leverage, in a bid to pressure him into agreeing to their price terms on the basis that he was leaving the country. But he recognized the ploy. “I realized they were dragging negotiations out until my departure, so I told them my date was flexible and I’d just stay until we finished. I acted as though I no longer had a deadline, and politely pointed out they were the ones who had to build a brewery within a certain time frame.” Benjamin spent every evening with his Chinese negotiating team, analyzing each day and trying to figure out the Chinese strategy. They would probe and explain to him Chinese cultural perceptions, which Benjamin found invaluable for understanding the Chinese tactics.

Being Tested

“There was one meeting in which one of the Chinese team became very angry and distressed. That night one of my interpreters told me that the individual had probably been testing my reaction. He explained that Chinese don’t do business with people they don’t know, and that sometimes they will use different emotions to see how the other party reacts under pressure. “Chinese culture is so different that you need that local Chinese input. You can never have intuitive understanding of everything that influences and drives them—that would take fifty lifetimes. The next best thing is to have local contacts to guide you.” Benjamin found other confusing elements about the negotiating process. “We would have in-principle agreement on issues, and then they would just change their mind. We have since learned this is standard. Even if you have something in writing, it is only ever a ‘discussion document.’ The Chinese expect you to ‘be like bamboo and bend with the wind.’

With the negotiations down to just two companies, Benjamin tried a new tactic. He pitched the environmental benefits of his brewery design, explaining how his technology could make the Chinese brewery a world leader in waste management. His technological solution would diminish environmental waste while ensuring maximum capacity and building up the Chinese company’s reputation as a world leader. Meanwhile, the Chinese team had also done its homework and was secretly favoring Benjamin’s company based on its reputation for delivering on time and to specifications. In the end, the specialist technology Benjamin could offer ostensibly won him the contract. But Benjamin believes it was more about relationships and face. “I put effort into helping them look good. I designed the brief with them using the latest technology. I helped solve other problems they had not considered, such as environment management that would save them money. I suggested my solutions would make their business a world leader. It was about giving them an opportunity to shine.”

The Last Round of Negotiations

Before agreement was reached, and after the last of three proposals had been delivered and considered, nine separate negotiations were held to discuss:

•      Payment terms and advance payments

•      Currency decisions

•      Inspections policy

•      Warranties

•      Delivery of overseas and local components

•      Commissioning and training of the Guangzhou company’s personnel

•      Penalties

•      Performance requirements

•      Capacity to deliver

By this time, the Chinese team was reduced to twelve people. While Benjamin and his team were in China on the last occasion, the Chinese team split in half and each went abroad—to Europe and Australia—to evaluate Benjamin’s suppliers (and through them, him) of pump valves, electronic equipment, stainless steel, and laser welding. His suppliers all appear to have given him a pass mark, but one subjective problem remained. While Benjamin’s team was well ahead of the other teams on all criteria, some members of the Chinese team remained opposed to the Australian team—because it was Australian—saying they wanted, on the basis of image and reputation, a brewery designer and builder from Europe. The vice governor of Guangdong province finally stepped in, we understand, and made the decision in favor of Benjamin’s company. Within forty-five minutes of his decision, the negotiation leader was on the phone to Benjamin at his hotel. “We want you to sign the contract,” he said out of the blue and with no preamble. “Come to the office now. Also bring $2,000 to pay for the celebration banquet at lunchtime.” Benjamin and his team went directly to the provincial office. Before he signed the contract, he said to the team leader, “Thank you very much for your agreement to commission us to build your brewery. In consideration of that, we wish to present you with a five percent discount.” The step was artful. Bringing the project in five percent under budget gave face to everyone on the Chinese team, including the vice governor. They would not forget this.

Commentary

After winning the job to design the Guangdong brewery, Benjamin was exclusively commissioned to design a $5 million winery in Xinjiang province. This demonstrated how trusted he had become in China.

Legacy systems are any software or old information systems that are critical to the business.
These systems may be based on outdated technologies that are still operating within an
organisation. According to the study, the financial services industry is one of the biggest
spenders on IT, but the majority of this spend is on maintenance activities required to keep
legacy systems operational. By some estimates, 75% of the IT budgets of banks and insurance
companies are consumed maintaining existing systems.
Maintaining legacy systems can be time, labour, and money consuming. This is because legacy
applications are typically monolithic, which means they are single-tier software applications
with all parts of the application built into one platform. In contrast, modern applications are
often broken down into loosely coupled individual services called microservices. Some of the
remedial plans include reengineering of the legacy platform, addressing architectural style and
consumption constraints, source code conversion, operating system and hardware replacement,
and outsourcing data centre management.
Running legacy systems may not be sufficient to meet the needs of the current dynamic
business market. Therefore, modernisation legacy systems seem necessary. Modernisation
legacy application is the process of transforming an application built with outdated technology
into a modern application with the latest technology. In the process of modernisation legacy
systems, the organisation should have a well-thought-out plan detailing how the organisation
should begin transforming legacy application to modern applications. The organisation should
also determine what its goals are for accomplishing the modernisation of legacy applications.
In addition, the organisation must ensure that its IT departments have the skills base to perform
legacy application modernisation.

Q!. As an Information Systems specialist, what factors would influence your consideration
when modernising a legacy information system? Justify your answers. (Note: your
answer shall not exceed TWO (2) pages.) 20 marks

Q2. Explain how does information systems affect traditional companies' business process.
Use examples to express your answer. 12 marks

Q3.In some industries, the adoption of information systems and technology has remained
unchanged over the past few decades. Nevertheless, managers and business
professionals today foresee information systems as a tool to stay competitive. Use an
example to discuss how do the implementation of information systems can help a
company to achieve competitive advantage. 20 marks

Q4. The pandemic has changed the way businesses of all kinds are conducted. Many
companies have decided to adopt cloud computing as their IT solutions. You are
required to assess FIVE (5) drivers for adopting cloud computing. 20 marks

Q5. The impact of pandemic not only affected the IT staff workload but also has restricted
the in-house information system development team. As an information system CIO,
what is the alternative to in-house development? Discuss THREE (3) benefits of your
suggestion and FIVE (5) possible reasons for it. 18 marks

Q6. Determine the approaches that are available to ease the implementation of a new
information systems. Suggest the best approach suitable to implement an information
system for the financial service department. Justify your answer. 10 marks

Legacy systems are any software or old information systems that are critical to the business.
These systems may be based on outdated technologies that are still operating within an
organisation. According to the study, the financial services industry is one of the biggest
spenders on IT, but the majority of this spend is on maintenance activities required to keep
legacy systems operational. By some estimates, 75% of the IT budgets of banks and insurance
companies are consumed maintaining existing systems.
Maintaining legacy systems can be time, labour, and money consuming. This is because legacy
applications are typically monolithic, which means they are single-tier software applications
with all parts of the application built into one platform. In contrast, modern applications are
often broken down into loosely coupled individual services called microservices. Some of the
remedial plans include reengineering of the legacy platform, addressing architectural style and
consumption constraints, source code conversion, operating system and hardware replacement,
and outsourcing data centre management.
Running legacy systems may not be sufficient to meet the needs of the current dynamic
business market. Therefore, modernisation legacy systems seem necessary. Modernisation
legacy application is the process of transforming an application built with outdated technology
into a modern application with the latest technology. In the process of modernisation legacy
systems, the organisation should have a well-thought-out plan detailing how the organisation
should begin transforming legacy application to modern applications. The organisation should
also determine what its goals are for accomplishing the modernisation of legacy applications.
In addition, the organisation must ensure that its IT departments have the skills base to perform
legacy application modernisation.

Q!. As an Information Systems specialist, what factors would influence your consideration
when modernising a legacy information system? Justify your answers. (Note: your
answer shall not exceed TWO (2) pages.) 20 marks

Q2. Explain how does information systems affect traditional companies' business process.
Use examples to express your answer. 12 marks

Q3.In some industries, the adoption of information systems and technology has remained
unchanged over the past few decades. Nevertheless, managers and business
professionals today foresee information systems as a tool to stay competitive. Use an
example to discuss how do the implementation of information systems can help a
company to achieve competitive advantage. 20 marks

Q4. The pandemic has changed the way businesses of all kinds are conducted. Many
companies have decided to adopt cloud computing as their IT solutions. You are
required to assess FIVE (5) drivers for adopting cloud computing. 20 marks

Q5. The impact of pandemic not only affected the IT staff workload but also has restricted
the in-house information system development team. As an information system CIO,
what is the alternative to in-house development? Discuss THREE (3) benefits of your
suggestion and FIVE (5) possible reasons for it. 18 marks

Q6. Determine the approaches that are available to ease the implementation of a new
information systems. Suggest the best approach suitable to implement an information
system for the financial service department. Justify your answer. 10 marks

In April 2019, Paul Marrapese, an independent security researcher from San Jose, California, has published research warning that peer-to-peer software developed by Shenzhen Yunni Technology firm, that's used in millions of IoT devices around the world, has a vulnerability that could allow an attacker to eavesdrop on conversations or press household items into service as nodes in a botnet.

The software, called iLnkP2P, is designed to enable a user to connect to IoT devices from anywhere by using a smartphone app. The iLnkP2P functionality is built into a range of products from companies that include HiChip, TENVIS, SV3C, VStarcam, Wanscam, NEO Coolcam, Sricam, Eye Sight, and HVCAM.

What Marrapese found is that as many as 2 million devices, and possibly more, using iLnkP2P software for P2P communication do not have authentication or encryption controls built-in, meaning that an attacker could directly connect to a device and bypass the firewall. Marrapese discovered the iLinkP2P flaw after buying an inexpensive IoTconnected camera on Amazon.

"I found that I was able to connect to it externally without any sort of port forwarding, which both intrigued and concerned me," Marrapese told Information Security Media Group. "I found that the camera used P2P to achieve this, and started digging into how it worked. From there, I quickly learned how ubiquitous and dangerous it was."

While the flaws with the iLnkP2P peer-to-peer software apparently have not yet been exploited in the wild, Marrapses believes it's better for consumers to know now before an attacker decides to start taking advantage of this particular vulnerability.

"There have been plenty of stories in the past about IP cameras and baby monitors being hacked, but I believe iLnkP2P is a brand new vector not currently being exploited in the wild," Marrapese says. "With that being said, the biggest motivation behind this disclosure is to inform consumers before it's too late - because I believe it's only a matter of time." As part of his research, Marrapese says he attempted to contact not only Shenzhen Yunni Technology but also several of the IoT manufacturers that use the company's P2P software. As of Monday, even after publishing results, he had not heard back from anyone.

Users of IoT devices that make use of the iLnkP2P software scan a barcode or copy a sixdigit number that is included in the product. From there, the owner can access the device from a smartphone app.

It's through these unique identifier numbers that Marrapese was able to discover that each device manufacturer used a specific alphabetic prefix to identify their particular product. For instance, HiChip uses "FFFF" as a prefix for the identification number for its devices. Once Marrapese was able to identify these devices through the unique number systems, he created several proof-of-concept attacks that took advantage of the flaws in the software.

a) In this case study, it is mentioned that vulnerable IoT devices can service as nodes in a botnet. Explain the working mechanism of a Botnet. Discuss any two attacks carried out by a botnet.

b) Report the importance of security in IoT devices. How does encryption help improve security for these devices?

c) Discuss the importance of lightweight cryptography in IoT enabled low-power devices. List the potential lightweight cryptographic algorithms for low-power IoT devices.

In this lab, we will write some utility methods within a class called ListUtils. These three methods will all be static methods, and their purpose will be to perform conversions between objects implementing one type of interface and objects implementing another type. For example, we will write a method for converting from an Iterable object to a Collection, and so on. We will discuss more about how this will work below.

Tip: you will definitely want to import java.util for this lab, since List and all of its relatives use it.

Iterable to Collection task:
public static <E> Collection<E> iterToCollection(Iterable<? extends E> iterable)

(3pts) Every Collection is an Iterable but not every Iterable is a Collection. However, if we have an Iterable, it implies a sequence of elements, so we can use that to built a Collection. That is what we will do in this method. To implement the method, we will need to create some kind of Collection object, and add elements from the Iterable's sequence to it one by one.

Hint: we don't want to store the result in a Collection itself, because it is just an interface, but there may be a more familiar choice of structure which implements Collection.

Collection to List task:
public static <E> List<E> collToList(Collection<? extends E> coll)

(3pts) As above, every List is a Collection but not every Collection is a List. However, if we have a Collection, it implies a fixed number of elements which can be retrieved in sequence, so we can use that to built a List by numbering the element indices in the order they are retrieved. That is what we will do in this method. To implement the method, we will need to create some kind of List object, and add elements from the Collection.

List to Map task:
public static <E> Map<Integer, E> listToMap(List<? extends E> list)

(3pts) A Map, sometimes known as an associative array or dictionary, is in some ways similar to a List, except that instead of accessing elements by the indices 0, 1, 2, etc., the elements are accessed by a key, which may or may not be in order, and which may or may not be a number. Every element in a Map is stored as a key-value pair (the value of the element plus the key which is used to access it). Thus, when we call the get() method, instead of passing in an int index, we pass in the key corresponding to the element we're looking for. An example of a class which implements the Map interface in Java is the HashMap class.

A List is not a Map and a Map is not a List. However a Map stores collections of data indexed by some kind of mapping. A Map is essentially a dictionary which allows us to look up elements in a collection of data using some reference key to find each element. The reference key for a Map can be any data type, but if we make that data type an Integer, then we can use the key to represent a List index. Thus, in this method, we will take a List and use it to build a Map by using the list index of each element as the element's key within the Map. Thus, if our List contains the elements 2, 4, and 6, then this method will produce a Map with the mappings 0 ⇒ 2, 1 ⇒ 4, and 2 ⇒ 6. As above, this would involve creating an appropriate type of Map and adding the elements from the List.

a) Based on recent statistics, Green Way Airlines expects 4.2% of its customers will be “no shows”. If the airline sold 260 seats for a flight, how many people would the airline expect as “no-shows”? (Round to the nearest whole number)

b) If the airplane can hold 254 passengers, can all those who show up at the gate get on the plane? Explain

4. Volunteers from Habitat for Humanity are painting 16 interior walls in new homes that have been built. Each wall measures 14 feet by 6 2/3 feet. a) If a gallon of paint covers 400 square feet, how many gallons will be required to paint all the walls? (Round to next whole number) b) If each gallon costs $27.95, find the cost of the project.

5. In a recent year, wind machines in the United States generated 17.8 billion kilowatt-hours of electricity (enough to power more than 1.6 million households). The nation's total electricity production was 4450 billion kilowatt-hours. What percent of the total electrical energy production was generated by wind machines?

6. If a 5 1/4 inch line on a map represents a 9-mile road, how many miles would be represented by a 3 1/2 inch line?

7. At a fire sale, items are being sold at 3/4 off the marked price. What is the sale price of an item that has a marked price of $156?

8. Sixteen ounces of mouthwash costs $3.49 while a 33-ounce container of the same brand costs $6.99. Which is a better buy? Why?

9. The price of gasoline jumped from $3.24 per gallon to $4.05 per gallon in one year. What was the percent increase?

10. You buy 2.75 yards of material at $4.80 per yard and pay $0.87 sales tax. What is the total cost for your purchase?

11. Ruth orders clothes from a retail catalog. She orders two turtleneck tops for $35 each, two pairs of stretch pants for $45 each, one winter jacket for $130, and three leather belts for $25 each. The shipping and handling charge for the order is $15. What is the total charge for Ruth's order?

12. A recipe for a wedding punch calls for 12 quarts of champagne. If the champagne comes in bottles that are 4/5 of a quart, how many bottles of champagne would be needed?

13. One bank offers a 4-year car loan at an annual simple interest rate of 7% plus a loan application fee of $45. A second bank offers 4-year car loans at an annual simple interest rate of 8% but no loan application fee. If you need to borrow $5800 to purchase a car, which of the two bank loans has the lesser loan cost? (Assume you keep the car for all 4 years.)

14. In a recent survey of new car buyers, 20 of 63 men said they would prefer to buy a silver car while 16 of 49 women said they would prefer silver. a) Which group has a stronger preference for silver cars? b) Explain your answer

15. How many acres are contained in 1 square mile? (1 mile = 5280 ft.; 1 acre = 43,560 sq. ft.)

Many entrepreneurial ventures raise money from venture capitalists. Getting venture capital funding is a complex process of finding one or more partners to commit to back the company on its journey. The relationship between entrepreneurs and venture capitalists is important – it can be very positive and help a venture succeed, or it can be stressful and have negative implications. We will spend quite a bit of time trying to understand what venture capitalists do and how they structure deals with entrepreneurial ventures. The big question – Can venture capitalists help you and your venture succeed? Venture capitalists are professionals who specialize in investing in high growth potential ventures. They typically raise funds from institutional investors, corporations or individuals and form partnerships that deploy capital over a period of up to ten years. The venture capitalists act as General Partners and the investors are Limited Partners. Venture capital firms have two income streams. They charge a management fee based on the amount in the fund and they take a share of the profits – that share is called the carried interest. For most funds, the management fee is under 2% per year and the carried interest percentage is between 15 and 30%. Most venture capital firms have several partners and invest in multiple companies, often in separate rounds of financing for each company. Venture capital firms tend to specialize in geography, stage of investment, and/or industry. At one end of the spectrum, some funds only invest in early-stage companies. Other firms invest in more established companies to fund growth. The professional venture capital industry has existed since the 1940s though the industry remained small until the mid-1990s as the Internet revolution took hold. Total capital deployed in the industry is under $300 billion. There are several hundred active venture capital funds in the United States and around the world. Venture capital is a “hits” business. Even the best investors lose money or make modest returns on a majority of the companies they back. A few great successes generate most of the value, as was true with companies like Intel, Genentech, Apple, Amazon, Google, Facebook and more recent companies like Uber and Airbnb. A small number of venture capital firms consistently back big winners. In recent years, Sequoia, Benchmark, Accel, and Greylock have had a disproportionate number of “Unicorn” hits – these are companies that attain valuations of $1 billion or more. There is enormous variety in the industry. Some funds are small – from $10 million up to $100 million. These firms are willing to back new companies and write initial checks of several hundred thousand up to a few million dollars. Most venture funds reserve capital to make follow-on investments in companies that are doing well. Larger funds – those up to $1 billion in capital – will only invest in companies that might need tens of millions of dollars over the life of the fund. Venture capitalists are active investors. They often insist on a seat on the board of directors and they negotiate for certain control rights such as the right to replace the CEO or to approve any large capital expenditure or corporate action. Venture capitalists almost always use a standard investment vehicle – convertible preferred stock – though the exact terms depend on many factors. Some venture capitalists have been successful entrepreneurs while others have experience in large companies or finance.

What do you think about raising money from venture capital firms? How do you decide whether you should do so?