QUESTION 7 - 6.3

I dislike using Microsoft Word and prefer to use other work processing software. However, nearly everyone that I work with uses Word, so I have to use this product when writing articles, books, and other research reports. For this reason, Microsoft Word holds a near-monopoly position in the word processor market. What is the barrier to entry that helps Microsoft maintain their market power?

QUESTION 8 - 6.3

Suppose there are 100 firms that sell athletic shoes and each has one percent of the market share. What is the HHI statistic for this market?

QUESTION 9 - 6.3

Suppose there are six firms in the breakfast cereal market. The four largest firms have 20 percent of the market share each, and the two smallest firms have 10 percent of the market share each. If one of the largest firms buys one of the smaller firms, what is the market share of the largest firm in the market after the buyout is concluded?

QUESTION 10 - 6.3

What happens to the profits of monopolistically competitive firms in the long run?

randtly Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of its earnings. In other words, Brandtly does not pay any dividends, and it has no plans to pay dividends in the near future. A major pension fund is interested in purchasing Brandtly's stock. The pension fund manager has estimated Brandtly's free cash flows for the next 4 years as follows: $4 million, $5 million, $8 million, and $16 million. After the fourth year, free cash flow is projected to grow at a constant 4%. Brandtly's WACC is 14%, the market value of its debt and preferred stock totals $62 million; and it has 7 million shares of common stock outstanding. Write out your answers completely. For example, 13 million should be entered as 13,000,000. What is the present value of the free cash flows projected during the next 4 years? Round your answer to the nearest cent. Do not round your intermediate calculations. $ What is the firm's horizon, or continuing, value? Round your answer to the nearest cent. $ What is the firm's total value today? Round your answer to the nearest cent. Do not round your intermediate calculations. $ What is an estimate of Brandtly's price per share? Round your answer to the nearest cent. Do not round your intermediate calculations. $

A clarified broth from the fermentation of sucrose using Aspergillus niger consists of 16.94% wt citric acid, 82.69% wt water, and 0.37% wt other solutes. To recover citric acid, the broth would normally be treated first with calcium hydroxide to neutralize the acid and precipitate it as calcium citrate, and then with sulfuric acid to convert calcium citrate back to citric acid. To avoid the need for calcium hydroxide and sulfuric acid, U.S. Patent 4, 25, 671 describes a solvent-extraction process using, which is insoluble in water and has a density of 0.847 g/cm^3. In a typical experiment at 30 C, 50 g of 20% wt citric acid and water was contacted with 0.86 g of amide. The resulting organic phase assumed to be in equilibrium with the aqueous phase, contained 6.39% wt citric acid and 2.97% wt water.

Determine (a) the partition (distribution) coefficients for citric acid and water, and (b) the solvent flow rate in, needed to extract 98% of the citric acid in 1300 kg/ h of broth using 5 countercurrent, equilibrium stages, with the partition coefficients from part (a), but ignoring the solubility of water in the organic phase. In addition, (c) propose a series of subsequent stages to produce near-pure citric acid crystals. In part (b), how serious would it be to ignore the solubility of water in the organic phase? 5.10. Extraction

Brandtly Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of its earnings. In other words, Brandtly does not pay any dividends, and it has no plans to pay dividends in the near future. A major pension fund is interested in purchasing Brandtly's stock. The pension fund manager has estimated Brandtly's free cash flows for the next 4 years as follows: $2 million, $6 million, $8 million, and $15 million. After the fourth year, free cash flow is projected to grow at a constant 7%. Brandtly's WACC is 9%, the market value of its debt and preferred stock totals $54 million; and it has 12 million shares of common stock outstanding.

Write out your answers completely. For example, 13 million should be entered as 13,000,000.

1. What is the present value of the free cash flows projected during the next 4 years? Round your answer to the nearest cent. Do not round your intermediate calculations.
   
   $
2. 
   
3. What is the firm's horizon, or continuing, value? Round your answer to the nearest cent.
   
   $
4. 
   
5. What is the firm's total value today? Round your answer to the nearest cent. Do not round your intermediate calculations.
   
   $
6. 
   
7. What is an estimate of Brandtly's price per share? Round your answer to the nearest cent. Do not round your intermediate calculations

Discussion Post Chapter 11: Pricing Strategy

Instructions

Write a post for the Discussion Forum on this topic, addressing the questions below. You may use either a written paragraph or bullet-point format. Part 1 should be 2–3 paragraphs in length or an equivalent amount of content in bullet-point form. Responses to your classmates’ posts should be 1–2 paragraphs or several bullet points in length.

Part 1: Pricing Strategy

Briefly describe pricing for your product or service. How does this compare to competitors, assuming competitors are at or near break-even point with their pricing? Analyze pricing alternatives and make recommendations about pricing going forward based on the following:

• How sensitive are your customers to changes in price?
• What revenue do you need to break even and achieve profitability?

• What does the price say about your product in terms of value, quality, prestige, etc.?

Part 2: Respond to Classmates’ Posts

After you have created your own post, look over the discussion forum posts of your classmates and respond to at least two of them.

Part 3: Incorporate Feedback

Review the feedback you receive from classmates and your instructor. Use this feedback to revise and improve your work before submitting it as part of the “Complete Marketing Plan” assignment.

Meteorology: Storms Weather-wise magazine is published in association with the American Meteorological society. Volume 46, Number 6 has a rating system to classify Nor’easter storms that frequently hit New England states and can cause much damage near the ocean coast. A severe storm has an average peak wave height of 16.4 feet for waves hitting the shore. Suppose that a Nor’easter is in progress at the severe storm class rating.

(a) Let us say that we want to set up a statistical test to see if the wave action (i.e, height) is dying down or getting worse. What would be the null hypothesis regarding average wave height?

(b) If you wanted to test the hypothesis that the storm is getting worse, what would you use for the alternate hypothesis?

(c) If you wanted to test the hypothesis that the waves are dying down, what would you use for the alternate hypothesis?

(d) Suppose you do not know if the storm is getting worse or dying out. You just want to test the hypothesis that the average wave height is different (either higher or lower) from the severe storm class rating. What would you use for the alternate hypothesis?

(e) For each of the tests in parts (b), (c), and (d), would the area corresponding to the P-value be on the left, on the right, or on both sides of the mean?

Is capitalism sustainable? Does business need to change the way it is presently conducted to be sustainable and competitive in the future? The above questions are your research topics for this week’s assignment. These are questions that many academics, economists, and policymakers in the United States ask themselves based upon the facts. This week you are asked to fact find (data) and consider how changes in the utilization of resources used by businesses are going to be factored going forward in the coming years. For example, how will humans and businesses deal with the end or near the end of specific resources (i.e. oil, iron, seafood, etcetera)? Keep in mind, as you learned in economics, that all resources are limited. Thus, based on current consumption rates they will run out. Also, within this equation, one must consider the environment and the questions of social responsibility to those who do not have access to such resources but are affected by the current capitalist society. In addition, clean water and air are a necessity for all forms of life. How does one protect these precious resources and continue to strive toward meeting profit objectives each fiscal quarter? Is capitalism as we know it at the end of its life cycle? While this is not an easy assignment or one where there are correct answers, there are answers and they should/must be based on good data and logic. In this assignment, you are asked to conduct your research and report the data while making an argument as it pertains to the original question. Is capitalism sustainable?

Part C

Go to the Phase Changes tab. Select the particular molecule, and set the temperature to the given values by using the stove to increase or decrease the temperature. Increase the pressure of the cylinder by moving the lid of the cylinder down with the help of the finger. The pressure of the cylinder is indicated by the pressure gauge on the top left corner of the simulation. On the right-hand side of the simulation is the phase diagram for the molecule.

As the molecules collide on the walls of the cylinder, the pressure of the cylinder does not remain constant; it fluctuates slightly as indicated by the gauge.

In the phase diagram, observe the red point. When a particular molecule is selected, set the temperature and pressure condition to the required value. Observe the position of the red point on the phase diagram when the pressure reaches approximately near the required value.

Which of the following conditions will result in the formation of a supercritical fluid?

Check all that apply.

Please show all calculations!

Exercise 1:

Early in the year Bill Barnes and several friends organized a corporation called Barnes Communications, Inc. The corporation was authorized to issue 50,000 shares of $100 par value, 10% cumulative preferred stock and 400,000 shares of $2 par value common stock. The following transactions (among others) occurred during the year:

Jan. 6    Issued for cash 20,000 shares of common stock at $14 per share. The shares were issued to Barnes and 10 other investors.

Jan. 7    Issued an additional 500 shares of common stock to Barnes in exchange for his services in organizing the corporation. The stockholders agreed that these services were worth $7,000.

Jan. 12 Issued 2,500 shares of preferred stock for cash of $250,000.

June 4 Acquired land as a building site in exchange for 15,000 shares of common stock. In view of the appraised value of the land and the progress of the company, the directors agreed that the common stock was be valued for purposes of this transaction at $15 per share.

Nov. 15 The first annual dividend of $10 per share was declared on the preferred stock to be paid December 20.

Dec. 20 Paid the cash dividend declared on November 15.

Dec. 31 After the financial statements were prepared, the net income for the year was $147,200.

a. Prepare journal entries to record the above transactions.

b. Prepare the stockholders’ equity section of the Barnes Communications, Inc. balance sheet at December 31, 2016.

Exercise 2:

On April 1, 2015, Mattson Industries purchased new equipment at a cost of $325,000. The useful life of this equipment was estimated at 5 years, with a residual value of $25,000.

Compute the annual depreciation expense for each year until this equipment becomes fully depreciated under each depreciation method listed below.

a. Straight-line, with depreciation for fractional years rounded to the nearest whole month.

b. 200 percent declining-balance.

c. Assume that the equipment is sold at the end of December 2017, for $176,250 cash. Prepare the journal entry to record the sale of the equipment under the straight-line method.

Exercise 3:

During the fiscal year ended December 31, 2017, Swanson Corporation engaged in the following transactions involving notes payable:

Aug. 6     Borrowed $12,000 from Maple Grove Bank, signing a 45-day, 12%

             note payable.

Sept. 16 Purchased office equipment from Seawald Equipment. The invoice amount was $18,000, and Seawald agreed to accept, as full payment a 10 percent, three-month note for the invoice amount.

Sept. 20 Paid Maple Grove Bank the note plus accrued interest.

Nov. 1 Borrowed $250,000 from Mike Swanson, a major corporate stockholder. The corporation issued Swanson a $250,000, 15 percent, 90-day note payable.

Dec. 1 Purchased merchandise inventory in the amount of $5,000 from Gathman Corporation. Gathman accepted a 90-day, 14 percent note as full settlement of the purchase. Swanson Corporation uses a perpetual inventory system.

Dec. 16 The $18,000 note payable to Seawald Equipment matures today. Swanson paid the accrued interest on this note and issued a new 30-day, 16 percent note payable in the amount of $18,000 to replace the note that matured.

a. Prepare journal entries to record each of the above transactions. Use a 360-day year in making the interest calculations.

b. Prepare the adjusting entry needed at December 31 to accrue interest.

c. Provide a possible explanation why the new 30-day note payable to Seawald Equipment pays 16 percent interest instead of the 10 percent rate charged on the September 16 note.

Exercise 4

On January 1, 2017, Park Rapids Lumber Company issued $80 million in 20-year, 10% bonds payable. Interest is payable semiannually on June 30th and December 31st. Bond discounts and premiums are amortized straight-line at each interest payment date.

a. Record the journal entry when the bonds were issued on January 1, 2017, make the necessary the journal entry to record the payment of bond interest on June 30, 2017, under each of the following assumptions:

1. The bonds were issued at 98. Round your answers to the nearest dollar.

2. The bonds were issued at 101. Round your answers to the nearest dollar.

b. Compute the net bond liability at December 31, 2017, under assumptions 1 and 2 above. Round to the nearest dollar.

c. Under which of the above assumptions, 1 or 2 would the investor’s effective rate of interest be higher? Explain.

Exercise 5

Speed World Cycles sells high-performance motorcycles and Motocross racers. One of Speed World’s most popular models is the Kazomma 900 dirt bike. During the current year, Speed World purchased eight of these cycles at the following costs:

Purchase Date                               Units Purchased      Unit Cost   Total Cost

July 1                                                                 2                  $4,950          $9,900

July 22                                                              3                    5,000           15,000

August 3                                                  3                        5,100           15,300

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

                                                                      8                                             $40,200

On July 28, Speed World sold four Kazomma 900 dirt bikes to the Vince Wilson racing team. The remaining four bikes remained in inventory at September 30, the end of Speed World’s fiscal year.

Assume that Speed World uses a perpetual inventory system.

a. Compute the cost of goods sold relating to the sale on July 28 and the ending inventory of Kazomma 900 dirt bikes at September 30, using the following cost flow assumptions:

1. Average cost

2. FIFO

3. LIFO

Show the number of units and the unit costs of each layer comprising the cost of goods sold and ending inventory.

b. Using the cost figures computed in part a. answer the following questions:

1. Which of the three cost flow assumptions will result in Speed World Cycles reporting the highest net income for the current year? Would this always be the case? Explain.

2. Which of the three cost flow assumptions will minimize the income taxes owed by Speed World Cycles for the year? Would you expect this usually to be the case? Explain.

3. May Speed World Cycles use the cost flow assumption that results in the highest net income for the current year in its financial statements, but use the cost flow assumption that minimizes taxable income for the current year in its income tax return? Explain.