Sydney is deciding whether to buy or lease a vehicle for her personal use only. If Sydney’s cost of funds is 8% per year, which of the following options should she select to acquire the new car?

She should buy the car with no down payment and $700 monthly payments for 5 years

She should buy the car with a $6,000 down payment and $600 monthly payments for 5 years

She should lease the car for $2,000 down, $500 monthly payments for 5 years, and a $10,000 payments at the end of the lease

She should lease the car for $4000 down, $550 monthly payments for 5 years, and a $5,000 payment at the end of the lease.

The total cycle time of an automatied fiber placement (AFP) operation (sheet lamination), used to manufacture a section of the airplane fuselage, is 8 hours and 40 minutes. The setup time before the start of the operation is 10 minutes. After each layer is put down, an inspection stage is performed for 5 minutes. The AFP head requires cleaning cycle of 3 minutes every 7 layers.

a. If the part is made of 20 layers, what is the time required (in minutes) to lay down 1 layer?

b. What is the percentage of down time for this operation?

c. What is the total cycle time (in minutes) for making this part, if the lay down speed was doubled?

America’s Gilded Age in the late nineteenth century began with a raft of innovations – railroads, steel production, oil extraction – but culminated in mammoth trusts owned by “robber barons” who used their wealth and power to drive out competitors, and then to corrupt American politics. We are now in a second Gilded Age – ushered in by semiconductors, software, and the Internet – and a handful of technology giants are the new robber barons. Facebook and Google now dominate the online advertising market, while the advertising revenue going to newspapers, network television, and other newsgathering agencies continues to decline. Google also hosts two-thirds of all Internet searches in the United States, and is so dominant that “to google” has long since become a commonly used verb. In 2006, Google acquired the world’s largest video-hosting site, YouTube. And Facebook, for its part, has acquired more than 70 companies over roughly 15 years, including potential competitors like Instagram and WhatsApp. Amazon, meanwhile, has become the first stop for one-third of all US consumers seeking to buy anything, including more than half of new books. Amazon’s scale translates into bargains for consumers, but it undermines supplier industries, including author royalties and publisher earnings. This consolidation at the leading edge of the US economy has created three big problems. The first concerns economic power. Here, the issue is not the classic one of consumer prices being higher than they’d be under competitive conditions; it is that Big Tech is inhibiting innovation. The incumbents’ size, must-use platforms (owing to network effects), wall-to-wall patents and copyrights, and fleets of lawyers to litigate potential rivals into submission have allowed them to create formidable barriers to new entrants. To be sure, large platforms like Amazon, Google, and Facebook have enabled creators to showcase and introduce new apps, songs, books, videos, and other content. But because of these platforms’ overwhelming bargaining power, they can take a large share of the profits. Partly as a result, the rate at which new jobcreating businesses are formed in the US has fallen by half since 2004. The second problem concerns political influence: massive concentrations of economic power tend to generate political clout that is easily abused. Because of its increasing size, the technology sector provides significant campaign contributions and maintains platoons of lobbyists and lawyers in Washington, DC. Google’s parent company, Alphabet, for example, is the one of the biggest lobbyists in the city. All this power gets results: tax loopholes, subsidies, regulatory exemptions, and other forms of government largesse that is unavailable to smaller firms. Hence, in 2018, Amazon paid no federal taxes, even as it held an auction to extort billions of dollars from states and cities eager to host its second headquarters. The company has also forced Seattle, its main headquarters, to scrap a plan to tax big corporations. That revenue would have been used to pay for homeless shelters for a growing population that can’t afford sky-high rents caused, in part, by Amazon. Big Tech’s political power also buys impunity. Facebook executives withheld evidence of malign Russian activity on their platform far longer than previously disclosed, but suffered no consequences. Perhaps more troubling, they employed a political opposition-research firm to discredit their critics. How long will it be before Facebook uses its own data and platform against its opponents and competitors? Google, too, has used its power to fend off criticism. It has quietly funded hundreds of university professors to write research papers justifying its market dominance, and it has threatened to cut funding to nonprofit think tanks that have criticized its economic and political power. The third problem concerns social power: the control over the flows of communications on which people rely to understand the world. The most obvious example is the news itself. By refusing to take responsibility for the accuracy of what appears on their platforms, the Big Tech firms are actively enabling demagogues, hatemongers, and con artists to exert unprecedented influence over society – perverting political discourse, encouraging bigotry, and even endangering children. The tech companies’ defense is that they are not publishers, but merely the proprietors of platforms and algorithms. But this claim is belied by their platforms’ powerful network effects. The more people participate, the more necessary the platform becomes for everyone else. If people want to know what’s happening in the world, they increasingly have little choice but to engage with YouTube, Facebook, or Twitter. Another aspect of Big Tech’s social power is its increasing capacity to pool and analyze data about all aspects of our lives, choices, and movements. This not only undermines our privacy; it challenges our very autonomy. Targeted advertising doesn’t merely respond to consumer needs and wants. It shapes our understanding of ourselves, our communities, and of the world. These three forms of power – economic, political, and social – are rooted in Big Tech’s increasing dominance over markets, information, and communications. And that dominance is a function of these companies’ size and scope. America responded to abuses of corporate power in the Gilded Age with antitrust laws that allowed the government to break up concentrated economic power. It is time to use antitrust again. Where breaking up Big Tech companies is impractical, those firms should at least be required to make their proprietary technology and data publicly available, and to share their platforms with smaller competitors. Such measures would impose few costs on the economy, given that these giants rely on scale rather than innovation. Moreover, the benefits of reducing Big Tech’s concentrated power would be significant. More competition would reduce the major platforms’ market leverage and political clout. It would also give people more choice about how to receive reliable information, and greater control over which aspects of their personal lives they share. In the second Gilded Age, as in the first, giant firms at the center of the US economy are distorting its market and its politics. Just as the problem is the same, so is the solution.

QUESTIONS:

1. In what ways have Google and Facebook become dominant in the technology sector?

2. How have the Big Tech created barriers to entry and consolidated their market power?

3. What has been the impact of the bargaining power of large platforms on new job-creating businesses?

4. Define the network effects and the positive network externalities. Explain why people all over the world would rely increasingly on YouTube, Facebook, or Twitter to reach the information?

5. What would be the new ways of dealing with the monopoly power attained by the Big Tech?

Analysis and Interpretation of Profitability
Balance sheets and income statements for Best Buy Co., Inc. follow.

(a) Compute net operating profit after tax (NOPAT) for 2011. Assume that the combined federal and statutory rate is: 37.0%. (Hint: Treat equity in income of affiliates as operating. Round your answer to the nearest whole number.)

2011 NOPAT = Answer($ millions)

(b) Compute net operating assets (NOA) for 2011 and 2010. (Hint: Treat Equity and Other Investments and Long-Term Liabilities as operating.)

2011 NOA = Answer($ millions)

2010 NOA = Answer

($ millions)

(c) Compute Best Buy's RNOA, net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2011. (Do not round until final answer. Round two decimal places. Do not use NOPM x NOAT to calculate RNOA.)

2011 RNOA = Answer%

2011 NOPM = Answer

%
2011 NOAT = Answer

(d) Compute net nonoperating obligations (NNO) for 2011 and 2010.

2011 NNO = Answer($ millions)

2010 NNO = Answer

($ millions)

(e) Compute return on equity (ROE) for 2011. (Round your answers to two decimal places. Do not round until your final answer.)

2011 ROE = Answer%

(f) Infer the nonoperating return component of ROE for 2011. (Use answers from above to calculate. Round your answer to two decimal places.)

2011 nonoperating return = Answer%

Question 2                                                                                     

On January 1, 2015, Portia Ltd. issued shares worth $1,120,000 to Storm Ltd. to acquire 80% of Storm’s outstanding shares. On the acquisition date, Storm’s statement of financial position shows share capital of $420,000 and retained earnings of $777,000. At the acquisition date, all of Storm’s identifiable assets and liabilities equaled their fair values with the exception of the following:

          Inventories (fair value exceeded book value by $14,000)

          Investments (fair value exceeded book value by $14,000)

          Equipment (fair value exceed net book value by $105,000)

At the acquisition date, Storm’s accumulated amortization account for the equipment had a balance of $805,000. As of the acquisition date, Storm’s equipment had a remaining useful life of 10 years.

Additional information:

Portia records its investments using the cost method.

Portia uses the entity theory method of consolidation.

In 2017, Portia sold all its investments for a gain of $63,000.

In 2018, Portia purchased equipment from Storm for $127,400. At the sale date, Storm’s net book value of the equipment was $98,000. Storm had originally purchased the equipment for $140,000. After the purchase, Portia amortized the equipment at a rate of $18,200 per year for the remaining 7 years of its useful life, taking a full year of amortization in 2018.

During 2019, Storm purchased goods from Portia. At the end of 2019, Storm still had $28,000 of these goods in inventory. Portia had earned a gross margin of 40% on the sale. The goods were sold to external customers in 2020.

During 2019, Portia purchased goods from Storm. At the end of 2019, Portia still had $140,000 of these goods in inventory. Storm had earned a gross margin of 40% on the sale. The goods were sold to external customers in 2020.

During 2020, Portia sold goods of $140,000 to Storm. Portia earned a gross profit of $56,000 on this sale. At the end of 2020, Storm still had $56,000 worth of goods in inventory.

During 2020, Storm sold goods of $980,000 to Portia at a gross margin of 40%. At the end of 2020, Portia still had 10% of the goods in inventory.

During 2020, Portia received $126,000 in royalties from Storm. Between January 1, 2015 and December 31, 2019, Portia received $700,000 in royalties from Storm.

The financial statements for Portia and Storm for the year ended December 31, 2020 are presented on the following pages.

Statement of Financial Position

As of December 31, 2020

                                                                                                      Portia Ltd.      Storm Ltd.

Assets:

Current assets:

Cash                                                                                      $        70,000    $       28,000

Accounts receivable                                                                   210,000             224,000

Inventory                                                                                       252,000             140,000

                                                                                                      532,000             392,000

Noncurrent assets:

Land                                                                                             140,000                   -

Equipment                                                                                 7,000,000        3,780,000

Accumulated amortization, equipment                      (2,478,000)       (1,736,000)

Investment in Storm                                                                  1,120,000           ____-___

                                                                                                    5,782,000        2,044,000

Total assets                                                                           $ 6,314,000     $ 2,436,000

Liabilities and shareholders’ equity:

Current liabilities:

Accounts payable                                                                 $     630,000     $    280,000

Noncurrent liabilities:

Loan payable                                                                               420,000             700,000

                                                                                                    1,050,000             980,000

Shareholders’ equity:

Share capital                                                                             1,680,000             420,000

Retained earnings                                                                    3,584,000        1,036,000

                                                                                                    5,264,000        1,456,000

                                                                                                 $ 6,314,000     $ 2,436,000

Condensed Statement of Comprehensive Income

For the year ended December 31, 2020

                                                                                          Portia Ltd.      Storm Ltd.

Revenue:

            Sales                                             $ 2,804,200   $ 2,100,000

            Royalties                                            210,000                -

            Dividends                                           100,800      ____-___

                                                                      3,115,000      2,100,000

                  Expenses:

                              Cost of sales                                   1,680,000      1,260,000

                              Other                                                   784,000        575,400

                                                                                        2,464,000      1,835,400

                  Net and comprehensive income          $    651,000   $    264,600

Statement of Changes in Equity – Retained Earnings Section

For the year ended December 31, 2020

                                                                                                      Portia Ltd.      Storm Ltd.

Retained earnings, beginning of the year                           $ 3,353,000 $    897,400

Net income                                                                                   651,000         264,600

Dividends declared                                                                    (420,000)      (126,000)

Retained earnings, end of year                                $ 3,584,000 $ 1,036,000

Required:

Prepare Portia’s consolidated financial statements for the year ended December 31, 2020. Be sure to show all your supporting calculations.

On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $260 million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions):

Required:
1. Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion.
2. Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming this project does not qualify for revenue recognition over time.
3. Suppose the estimated costs to complete at the end of 2019 are $110 million instead of $60 million. Compute the amount of revenue and gross profit or loss to be recognized in 2019 using the percentage of completion method.

Required 1

Required 2

Required 3

Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion. (Enter your answers in millions. Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer.)

Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion. (Enter your answers in millions. Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer.)

Show less

Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming this project does not qualify for revenue recognition over time. (Enter your answers in millions. Loss amounts should be indicated with a minus sign.)

Suppose the estimated costs to complete at the end of 2019 are $110 million instead of $60 million. Compute the amount of revenue and gross profit or loss to be recognized in 2019 using the percentage of completion method. (Enter your answers in millions. Use percentages as calculated and rounded in the table below to arrive at your final answer.)

In order to meet the rising demand from an increasing global population, the United Nations Food and Agriculture Organization had estimated that food production would have to increase by 70 percent to cope with demand. Given the finite supply of arable land and water, producing higher yields through increased farm productivity was seen by many as the only viable option. Biotechnology (Biotech) crops offered one means to increase productivity by offering greater yields while potentially using fewer natural resources such as land, fertilizers, herbicides, pesticides and water. Driven by these opportunities, in 1996, two different biotech seeds- soybean and cotton- were farmed commercially for the first time. Both were developed by Monsanto, a leading global producer of biotech seeds.
Consider the market for cotton seeds in India. Cotton is a neccessary item having few substitutes especially in the Indian weather. With the increasing denmand for cotton, the cotton farmers were keen to buy the biotech seeds. Monsanto , the biotech seed producing company was a pioneer in cotton seed production. It has been doing business in India since 1949. In 2002, Monsanto, through a joint venture, introduced the first in-the-seed cotton trait biotechnology. This trait served to protect cotton crops against potentially devastating pests, thereby reducing the need for pesticides and improving yields. By 2010, over 40 Indian seed companies had begun to offer similar biotechnology cotton seeds, thereby improving the yield of cotton and making the market competitive. Biotech seeds became very popular and became necessary for cotton production. Suppliers of biotech seeds also became sensitive to changes in price of biotech seeds. By April 2010, the governments of three Indian provinces, collectively accounting for 70 percent of cotton production in the country had established a ceiling price that seed companies could charge farmers for biotech cotton seeds. This was a dramatic departure from the free market mechanisms put in place by the central government since the economic reforms launched in 1991. Companies producing biotech seeds were upset with this decision of the government. They did not understand why the government has to step in and bring down prices in such a competitive market.

1. Consider the market for cotton in India. Draw the demand and supply of cotton production in India and comment on the elasticity.

2. What would be the impact on equilibrium price and quantity of cotton due to the introduction of biotech cotton seeds?

3. Why do you think the biotech cotton seeds producing companies are unhappy with the government's decision of price ceiling on biotech cotton seeds? Explain (with the help of a well-labelled diagram, drawn by hand) how a price ceiling impacts production of a commodity.

4. Suppose, instead of price ceiling, the government announced a subsidy on biotech cotton seeds, to help the farmers producing cotton. Explain (with the help of a well-labelled diagram, drawn by hand) how this would impact the market equilibrium price and quantity?

ANSWER ASAP

In order to meet the rising demand from an increasing global population, the United Nations Food and Agriculture Organization had estimated that food production would have to increase by 70 percent to cope with demand. Given the finite supply of arable land and water, producing higher yields through increased farm productivity was seen by many as the only viable option. Biotechnology (Biotech) crops offered one means to increase productivity by offering greater yields while potentially using fewer natural resources such as land, fertilizers, herbicides, pesticides and water. Driven by these opportunities, in 1996, two different biotech seeds- soybean and cotton- were farmed commercially for the first time. Both were developed by Monsanto, a leading global producer of biotech seeds.

Consider the market for cotton seeds in India. Cotton is a necessary item having few substitutes especially in the Indian weather. With the increasing demand for cotton, the cotton farmers were keen to buy the biotech seeds. Monsanto , the biotech seed producing company was a pioneer in cotton seed production. It has been doing business in India since 1949. In 2002, Monsanto, through a joint venture, introduced the first in-the-seed cotton trait biotechnology. This trait served to protect cotton crops against potentially devastating pests, thereby reducing the need for pesticides and improving yields. By 2010, over 40 Indian seed companies had begun to offer similar biotechnology cotton seeds, thereby improving the yield of cotton and making the market competitive. Biotech seeds became very popular and became necessary for cotton production. Suppliers of biotech seeds also became sensitive to changes in price of biotech seeds. By April 2010, the governments of three Indian provinces, collectively accounting for 70 percent of cotton production in the country had established a ceiling price that seed companies could charge farmers for biotech cotton seeds. This was a dramatic departure from the free market mechanisms put in place by the central government since the economic reforms launched in 1991. Companies producing biotech seeds were upset with this decision of the government. They did not understand why the government has to step in and bring down prices in such a competitive market. (15marks)

1. Consider the market for cotton in India. Draw the demand and supply of cotton production in India and comment on the elasticity.

2. What would be the impact on equilibrium price and quantity of cotton due to the introduction of biotech cotton seeds?

3. Why do you think the biotech cotton seeds producing companies are unhappy with the government's decision of price ceiling on biotech cotton seeds? Explain (with the help of a well-labelled diagram, drawn by hand) how a price ceiling impacts production of a commodity.

4. Suppose, instead of price ceiling, the government announced a subsidy on biotech cotton seeds, to help the farmers producing cotton. Explain (with the help of a well-labelled diagram, drawn by hand) how this would impact the market equilibrium price and quantity?

Please answer to the best of your understanding.

1. Due to the lockdown situation in 2020, online videoconferencing services such as Zoom have become popular. Students can take all of their classes online. However, a more immersive experience is promised by VR headset technology. • Please do some research online and describe three brands of VR headsets and VR cameras that may be poised to benefit if education has a VR future. • What are the advantages and limitations of VR (vs Zoom type online classes) as an education delivery channel? • From a channel design standpoint, what do you see as the key variables to consider in determining whether VR classes could be a feasible channel choice for education in colleges even after the lockdown situation is resolved?

2.The sharing or gig economy involves internet platforms (e.g., Uber, Airbnb…) that allow service providers to monetize their unused time and assets. Gigi considers her skills to be in report writing, spreadsheets, and internet search. Can she make some reasonable side income with these skills in the gig economy? Please cover the following issues: 1. Decide on Gigi’s product and who the target consumer is. What might be the price of her service and anticipated income? 2. Discuss a few platform/channels for this type of work (e.g., fiverr, taskrabbit…) through which consumers can be reached and the service delivered. Should Gigi operate a multi-channel? Is there a possibility of channel conflict with the platform?

X, Inc. is a volume manufacturer of high technology automotive mirrors (including cell link and voice activation). FX is looking to expand their operations to add a second product line capable of producing 1.3 Million units per year. The equipment investment cost for this new operation is $27 Million. The project falls under a 7 year MACRS class life and the company estimates that the salvage value will be $2.7 Million at the end of the 6 year project. The average selling price for each mirror is $85 per unit. The annual expected sales shown below: Year 2018 2019 2020 2021 2022 2023 Volume (000) 600 750 1000 1200 1200 1200 The material cost for each mirror is $20 (with 20 % of the material imported from Canada and 30% from China). The labor to produce each mirror is $13 with additional variable cost of manufacturing at $15 per unit. The fixed cost of manufacturing operations is $10 Million per year. FX maintains 1 month of raw materials and 1 month of WIP and finished goods combined to balance overall automotive demand. Assume that FX has a federal tax rate of 35% and a state tax rate of 4%. Also assume that FX uses a MARR of 15% for all economic analyses. a) Assume the material cost and inflation (material, labor, overhead) can fluctuate over next 6 years similar to the past 6 years. Put together a cash flow model (using simulation) to project the NPV