19.Before 1990, there was a higher incidence of birth defects among pregnant mothers. Scientists hypothesized that was because the pregnant women were not getting sufficient amounts of folic acid in their diet. In 1985, the average folic acid intake of an American pregnant woman was 150 micrograms/day. After folic acid fortification of cereals and flour in the late 1990s, it was hypothesized that women were now taking in substantially more folic acid daily. A dietary survey of a sample of 49 pregnant women showed that their daily intakes in the year 2001 were 425 micrograms/day, with a standard deviation of 175 micrograms. Did these pregnant women take in statistically MORE folic acid in their diet in 2001 compared to 1985? Run the appropriate test at a 5% level of significance. Choose the correct response for Step 5: Conclusion of this hypothesis test.

Group of answer choices

Do NOT reject the null because (150-425)/(175/7) is LESS than 1.96

Do NOT reject the null hypothesis because (150-425)/(175/7) is LESS than 1.645.

Reject the null hypothesis because (425-150)/(175/7) > 1.645, p<0.001.

Reject the null hypothesis because (425-150)/(175/7) > 1.96, p<0.001

18.Before 1990, there was a higher incidence of birth defects among pregnant mothers. Scientists hypothesized that was because the pregnant women were not getting sufficient amounts of folic acid in their diet. In 1985, the average folic acid intake of an American pregnant woman was 150 micrograms/day. After folic acid fortification of cereals and flour in the late 1990s, it was hypothesized that women were now taking in substantially more folic acid daily. A dietary survey of a sample of 49 pregnant women showed that their daily intakes in the year 2001 were 425 micrograms/day, with a standard deviation of 175 micrograms. Did these pregnant women take in statistically LESS folic acid in their diet in 2001 compared to 1985? Run the appropriate test at a 5% level of significance. Choose the correct response for Step 5: Conclusion of this hypothesis test.

Group of answer choices

Reject the null hypothesis because (150-425)/(175/7) is < -1.645.

Do NOT reject the null hypothesis because (425-150)/(175/7) is NOT <-1.645.

Do NOT reject the null hypothesis because (150-425)/(175/7) > 1.645.

Reject the null hypothesis because (425-150)/(175/7) <- 1.645, p<0.001.

On average, a person who lives in Switzerland consumes the most chocolate each year compared to people in other countries, at 22.36 pounds per person. A sample of 100 Austrians shows they are not far behind, consuming an average of 20.13 pounds per person with a standard deviation of 3.6 pounds. Is the average amount of chocolate consumed by the Austrians significantly DIFFERENT from the amount consumed by those in Switzerland? Run the appropriate test at a 5% level of significance. Choose the correct response for Step 5: Conclusion of this hypothesis test.

Group of answer choices

Reject the null because (20.13-22.36)/(3.6/10) < -1.96, p<0.001.

Reject the null because (22.36-20.13)/(3.6/10) >1.645, p<0.001.

Reject the null because (22.36-20.13)/(3.6/10) >1.96, p<0.001.

Reject the null because (20.13-22.36)/(3.6/10) < -1.645, p<0.001.

17.On average, a person who lives in Switzerland consumes the most chocolate each year compared to people in other countries, at 22.36 pounds per person. A sample of 100 Austrians shows they are not far behind, consuming an average of 20.13 pounds per person with a standard deviation of 3.6 pounds. Is the average amount of chocolate consumed by the Austrians significantly DIFFERENT from the amount consumed by those in Switzerland? Run the appropriate test at a 5% level of significance. Choose the correct response for Step 5: Conclusion of this hypothesis test.

Group of answer choices

Reject the null because (20.13-22.36)/(3.6/10) < -1.96, p<0.001.

Reject the null because (22.36-20.13)/(3.6/10) >1.645, p<0.001.

Reject the null because (22.36-20.13)/(3.6/10) >1.96, p<0.001.

Reject the null because (20.13-22.36)/(3.6/10) < -1.645, p<0.001.

It was February 2005, and Fred Gehring and Ludo Onnink—CEO and CFO, respectively, of Tommy Hilfiger Europe (the European subsidiary of Tommy Hilfiger)—had just left the conference room in Amsterdam after hearing Tommy Hilfiger’s quarterly results. For the fifth consecutive year, the results in the U.S. were disappointing; sales had declined by 11% on average over this period, dropping from $1.9 billion in 2000 to $1.1 billion in 2005. In Europe, however, the firm’s performance continued to be strong with sales growing at more than 40% a year, from $82 million in 2000 to $428 million in 2005 (see Exhibit 1). In an attempt to compensate for the decline in its core Tommy Hilfiger brand, the company had acquired the rights to the Karl Lagerfeld brand and was contemplating further brand acquisitions and expansions. Gehring and Onnink were concerned that Tommy Hilfiger’s steady decline in the U.S. would start spilling over to the European business, which thus far had been insulated and was growing at a healthy pace. Tommy Hilfiger, the second of nine children, had grown up in Elmira, New York. In 1969, while a senior in high school, Hilfiger began his fashion career with $150, just enough to purchase 20 pairs of bell-bottom jeans. He opened a shop called People’s Place which quickly grew to 10 stores, expanding to serve nearby college campuses, such as Cornell University. A big rock ‘n’ roll fan, Hilfiger was influenced by the British rock scene, and numerous young musicians—including a young Bruce Springsteen—visited his stores. Hilfiger’s goal was to bring London and New York City fashion to upstate New York. Over time, he gradually shifted from retailer to designer as he began to customize jeans and the other items he sold.  Larger sizes, more prominent logos, and brighter colors became a staple of Tommy Hilfiger designs in the late 1990s. Customers responded with enthusiasm, and Tommy Hilfiger’s sales exploded, crossing the $2 billion mark in 2000. Riding its rapidly growing sales and increasing popularity, the Tommy Hilfiger brand expanded aggressively via additional lines—such as boys’ clothing—and licensing abroad in markets such as Australia, India, Korea, Japan, and South America. However, by the early 2000s the company was beginning to lose steam in the U.S. market. Hiphop artists and their fans had moved on to more urban brands, such as Marc Ecko and FUBU, while the Tommy Hilfiger brand had already become tarnished in the eyes of preppy consumers.In response to this decline, the company began to cut prices, filling the clearance racks of Macy’s and Bloomingdale’s. In addition, the company tried to get away from core design themes to pick up sales by mimicking designs that were selling well in department stores and to expand the brand lineup in order to cater to more audiences. When Tommy Hilfiger filed for its IPO in 1992 it had only its one flagship Tommy Hilfiger brand. By 2005, the company had significantly expanded its brand portfolio. The U.S. Distribution Channel The early 2000s coincided with massive consolidation in the U.S. department store channel. One notable example was Federated’s 2005 acquisition of Marshall Field’s to create the nation's secondlargest department store chain, accounting for 35% of conventional and chain department store sales in the U.S. Within the all-important department store channel, there was an inherent pecking order. At the top of the pyramid were luxury stores such as Neiman Marcus and Saks. The next step down included bridge retailers like Bloomingdale’s and Nordstrom. Below that was the better category, with stores like Macy’s and Parisian. Moderate stores—such as Dillard’s and J. C. Penney—came in next, followed by budget stores, which included Kohl’s and Mervyns. In 2005, department stores accounted for 18% of U.S. clothing sales. The 24-and-under age group—a fashionable, trend-driven market—accounted for 36.5% of Tommy Hilfiger’s sales, but only 29.7% of Polo’s sales. Additionally, while Polo children’s wear accounted for only 8.2% of total sales, this segment made up more than 15% of Tommy Hilfiger’s sales. Tommy Hilfiger ranked highly in terms of awareness relative to Polo (90% vs. 86%). However, the brand fared worse in terms of other key factors deemed to be important for apparel purchasers, such as quality, style, and fit. Market research conducted by the company showed that retailers were offering Tommy Hilfiger merchandise at prices 30% below Polo for comparable items, although customers were willing to pay prices just one tier below Polo (7% to 10% lower). This disconnect in pricing depended primarily on the economics of the U.S. wholesale sector. Department stores requested discounts or markdown support from Tommy Hilfiger to drive higher volumes and traffic to their stores. In order to protect the margins generated from the department store channel, Tommy Hilfiger responded by pushing more and more product volume at lower prices into the channel, which in turn created pressure to discount the products in order to sell through the large volumes. In 2005, Tommy Hilfiger changed its segment reporting to separately report the U.S. and international (including Canada and Europe) wholesale results, which had previously been consolidated in a single wholesale figure. (The financial results by geographic region are reported in Exhibits 5 and 6.) This revealed that, from 2004 to 2005, gross margins in the U.S. wholesale channel declined from 33.5% to 26.2%, and the U.S. wholesale EBITDA dropped from $111 million in 2004 to $11 million in 2005. During the same period, retail’s contribution to sales in the U.S. was increasing. Sales for the U.S. retail business increased from $320 million in 2004 to $345 million in 2005, while the U.S. retail EBITDA went from $64 million in 2004 to $65 million in 2005. Retail gross margins in 2005 were strong at about 50.4%, vs. 26.2% in the wholesale channel. In contrast, the European wholesale distribution channel contributed $365 million in sales in 2004 and $459 million in 2005, with EBITDA of $63 million in 2004 and $98 million in 2005. Gross margins in European wholesale were at 55.4%, more than double the gross margin in the U.S. wholesale business. The European retail channel generated $47 million in sales in 2004 and $72 million in 2005. European retail EBITDA reached $9 million in 2004 and $5 million in 2005. Tommy Hilfiger had already attempted to move into the upscale apparel segment in the spring of 2004 with the launch of the H Hilfiger line, a brand that was intended to be more fashionable and formal. The line, backed by a $10 million marketing budget and Hilfiger’s personal involvement with a tour of six U.S. department stores, did well in Europe and the U.S. (in the company’s own retail stores) but was relatively unsuccessful in the U.S. wholesale channel. The Lagerfeld acquisition was an even larger departure from Tommy Hilfiger’s traditional audience. In early March 2005, Gehring and Onnink presented their fully worked-out plans, first to the CEO and later to the entire board. To their surprise, while the board recognized that there was merit in the plan, they did not embrace it. Gehring and Onnink engaged in several conversations with Hilfiger to express their concerns about the developments in the business and Gehring’s possible interest in acquiring the company. Gehring also had conversations with Joel Horowitz, then chairman of the board, to express Gehring’s concerns about the financial results of the U.S. wholesale operations and his interest in the acquisition. From these interactions, Gehring concluded he would need to secure financing to make his bid credible to Tommy Hilfiger’s board, and he called Silas Chou to discuss potential options. Chou committed his financial support, conditional on Gehring finding a private equity firm to support his bid. Gehring also secured some financing from a European bank, but again the financing was conditional on a private equity-led transaction. In March and April 2005, Gehring and Onnink met with several private equity firms and financial institutions to discuss their interest in acquiring Tommy Hilfiger. In May 2005, Gehring delivered a letter to the board of directors of Tommy Hilfiger, backed with equity financing from Apax Funds and debt financing from Citibank, expressing their joint interest in making a proposal to acquire Tommy Hilfiger for $14.50 in cash per share (representing a 33% premium over the most recent closing price of $10.91). The board rejected the offer but retained J.P. Morgan as a financial advisor to seek additional offers from potential buyers, whether strategic or financial. Gehring and Onnink were appointed the new CEO and CFO, respectively. Hilfiger and Horowitz were invited into the transaction as co-investors and board members. The Way Forward Gehring and Onnink were now in control of the business. They realized they needed to start executing their plan immediately. Could they turn the company’s performance around in the U.S.? And what changes, if any, should they make to support the global expansion of the company? What should their immediate next steps be? The Turnaround (2006–2010) Between signing the transaction documentation in December 2005 and completing the acquisition in May 2006, Gehring and Onnink worked with the Apax team to put together a detailed 100-day plan that included all initiatives the new management team was going to implement immediately after taking charge. Gehring relocated from Amsterdam to New York to take over and initiate a set of radical changes to the U.S. operations right after the closing in May 2006. Approximately 40% of wholesale and corporate staff positions in the U.S. were eliminated, and three distribution centers in the U.S. were consolidated into one site. In terms of the brand portfolio, Karl Lagerfeld and the Tommy Hilfiger brand extension “H” were closed in New York, which resulted in additional savings. The worldwide trademarks for Karl Lagerfeld, Lagerfeld Gallery, and KL Lagerfeld/Lagerfeld had been acquired by Tommy Hilfiger in January 2005. One of the core components of Gehring’s plan was the importance of changing the brand’s perception and positioning in the U.S. The objective was to move from the blurred positioning between low-tier urban street wear and the mid-tier “traditional” brand (competing with Nautica and Charter Club) to a best-in-class “neo-traditional” brand (competing with J. Crew and Polo Ralph Lauren). A turning point in the company’s wholesale strategy was an exclusive distribution deal with Macy’s. In a first-of-its-kind deal that was later adopted by several other brands, the company agreed to eliminate distribution through all other stores in exchange for “most favored nation” status with Macy’s. The collaboration between Gehring and Onnink on the one hand and Apax on the other was crucial to effect this transformation. In May 2010, Apax sold Tommy Hilfiger to Phillips-Van Heusen Corporation, now known as PVH Corp. (NYSE: PVH), for a total consideration of approximately €2.2 billion ($3.0 billion), including €1.9 billion ($2.6 billion) in cash and €276 million ($380 million) in PVH common stock. The price achieved by Apax at exit was almost twice what it paid for Tommy Hilfiger in 2006. This implied that Apax achieved a 5 times money multiple on its equity investment in the transaction. Tommy Hilfiger in 2014 The Tommy Hilfiger business progressed well after the transaction between Apax and PVH. European growth kept up its momentum even during the extremely turbulent European debt crisis and the related recessionary environment that was triggered by it. The pan-European penetration of the brand proved to be a significant strong point whereby a slowdown in business in the Southern European markets was offset by ongoing growth in the Northern markets. The Hilfiger brands generated significant revenue for PVH. In 2012, the Tommy Hilfiger North America segment generated earnings for interest and taxes (EBIT) of $183 million on total revenue of $1.4 billion. This represented significant growth over 2010, when EBIT for North America was $111 million. Meanwhile, the Tommy Hilfiger International segment generated EBIT of $243 million on $1.8 billion of total revenue. Similar to North America, the 2012 EBIT represented significant growth over the 2010 figure of $155 million. In November 2013 Gehring announced his plans to retire from his CEO position during the second half of 2014 and to hand over leadership of the company to long-time associate Daniel Grieder, a 52-year-old Swiss national who has been with the company in various roles since 1997, most recently as CEO of the European business. PVH reached an agreement with Gehring to continue with the company on an ongoing basis as chairman of Tommy Hilfiger and vice chairman of PVH Corp. Onnink also announced his planned resignation effective April 2014, when he would seek new entrepreneurial endeavors but remain involved with the company in an advisory capacity for another year.

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

What is the case about?

What are the important events that occurred in the case?

What can we learn from reading the case?

What advice do you have for the leaders in the case and/or company in the case?

It was February 2005, and Fred Gehring and Ludo Onnink—CEO and CFO, respectively, of Tommy Hilfiger Europe (the European subsidiary of Tommy Hilfiger)—had just left the conference room in Amsterdam after hearing Tommy Hilfiger’s quarterly results. For the fifth consecutive year, the results in the U.S. were disappointing; sales had declined by 11% on average over this period, dropping from $1.9 billion in 2000 to $1.1 billion in 2005. In Europe, however, the firm’s performance continued to be strong with sales growing at more than 40% a year, from $82 million in 2000 to $428 million in 2005 (see Exhibit 1). In an attempt to compensate for the decline in its core Tommy Hilfiger brand, the company had acquired the rights to the Karl Lagerfeld brand and was contemplating further brand acquisitions and expansions. Gehring and Onnink were concerned that Tommy Hilfiger’s steady decline in the U.S. would start spilling over to the European business, which thus far had been insulated and was growing at a healthy pace. Tommy Hilfiger, the second of nine children, had grown up in Elmira, New York. In 1969, while a senior in high school, Hilfiger began his fashion career with $150, just enough to purchase 20 pairs of bell-bottom jeans. He opened a shop called People’s Place which quickly grew to 10 stores, expanding to serve nearby college campuses, such as Cornell University. A big rock ‘n’ roll fan, Hilfiger was influenced by the British rock scene, and numerous young musicians—including a young Bruce Springsteen—visited his stores. Hilfiger’s goal was to bring London and New York City fashion to upstate New York. Over time, he gradually shifted from retailer to designer as he began to customize jeans and the other items he sold.  Larger sizes, more prominent logos, and brighter colors became a staple of Tommy Hilfiger designs in the late 1990s. Customers responded with enthusiasm, and Tommy Hilfiger’s sales exploded, crossing the $2 billion mark in 2000. Riding its rapidly growing sales and increasing popularity, the Tommy Hilfiger brand expanded aggressively via additional lines—such as boys’ clothing—and licensing abroad in markets such as Australia, India, Korea, Japan, and South America. However, by the early 2000s the company was beginning to lose steam in the U.S. market. Hiphop artists and their fans had moved on to more urban brands, such as Marc Ecko and FUBU, while the Tommy Hilfiger brand had already become tarnished in the eyes of preppy consumers.In response to this decline, the company began to cut prices, filling the clearance racks of Macy’s and Bloomingdale’s. In addition, the company tried to get away from core design themes to pick up sales by mimicking designs that were selling well in department stores and to expand the brand lineup in order to cater to more audiences. When Tommy Hilfiger filed for its IPO in 1992 it had only its one flagship Tommy Hilfiger brand. By 2005, the company had significantly expanded its brand portfolio. The U.S. Distribution Channel The early 2000s coincided with massive consolidation in the U.S. department store channel. One notable example was Federated’s 2005 acquisition of Marshall Field’s to create the nation's secondlargest department store chain, accounting for 35% of conventional and chain department store sales in the U.S. Within the all-important department store channel, there was an inherent pecking order. At the top of the pyramid were luxury stores such as Neiman Marcus and Saks. The next step down included bridge retailers like Bloomingdale’s and Nordstrom. Below that was the better category, with stores like Macy’s and Parisian. Moderate stores—such as Dillard’s and J. C. Penney—came in next, followed by budget stores, which included Kohl’s and Mervyns. In 2005, department stores accounted for 18% of U.S. clothing sales. The 24-and-under age group—a fashionable, trend-driven market—accounted for 36.5% of Tommy Hilfiger’s sales, but only 29.7% of Polo’s sales. Additionally, while Polo children’s wear accounted for only 8.2% of total sales, this segment made up more than 15% of Tommy Hilfiger’s sales. Tommy Hilfiger ranked highly in terms of awareness relative to Polo (90% vs. 86%). However, the brand fared worse in terms of other key factors deemed to be important for apparel purchasers, such as quality, style, and fit. Market research conducted by the company showed that retailers were offering Tommy Hilfiger merchandise at prices 30% below Polo for comparable items, although customers were willing to pay prices just one tier below Polo (7% to 10% lower). This disconnect in pricing depended primarily on the economics of the U.S. wholesale sector. Department stores requested discounts or markdown support from Tommy Hilfiger to drive higher volumes and traffic to their stores. In order to protect the margins generated from the department store channel, Tommy Hilfiger responded by pushing more and more product volume at lower prices into the channel, which in turn created pressure to discount the products in order to sell through the large volumes. In 2005, Tommy Hilfiger changed its segment reporting to separately report the U.S. and international (including Canada and Europe) wholesale results, which had previously been consolidated in a single wholesale figure. (The financial results by geographic region are reported in Exhibits 5 and 6.) This revealed that, from 2004 to 2005, gross margins in the U.S. wholesale channel declined from 33.5% to 26.2%, and the U.S. wholesale EBITDA dropped from $111 million in 2004 to $11 million in 2005. During the same period, retail’s contribution to sales in the U.S. was increasing. Sales for the U.S. retail business increased from $320 million in 2004 to $345 million in 2005, while the U.S. retail EBITDA went from $64 million in 2004 to $65 million in 2005. Retail gross margins in 2005 were strong at about 50.4%, vs. 26.2% in the wholesale channel. In contrast, the European wholesale distribution channel contributed $365 million in sales in 2004 and $459 million in 2005, with EBITDA of $63 million in 2004 and $98 million in 2005. Gross margins in European wholesale were at 55.4%, more than double the gross margin in the U.S. wholesale business. The European retail channel generated $47 million in sales in 2004 and $72 million in 2005. European retail EBITDA reached $9 million in 2004 and $5 million in 2005. Tommy Hilfiger had already attempted to move into the upscale apparel segment in the spring of 2004 with the launch of the H Hilfiger line, a brand that was intended to be more fashionable and formal. The line, backed by a $10 million marketing budget and Hilfiger’s personal involvement with a tour of six U.S. department stores, did well in Europe and the U.S. (in the company’s own retail stores) but was relatively unsuccessful in the U.S. wholesale channel. The Lagerfeld acquisition was an even larger departure from Tommy Hilfiger’s traditional audience. In early March 2005, Gehring and Onnink presented their fully worked-out plans, first to the CEO and later to the entire board. To their surprise, while the board recognized that there was merit in the plan, they did not embrace it. Gehring and Onnink engaged in several conversations with Hilfiger to express their concerns about the developments in the business and Gehring’s possible interest in acquiring the company. Gehring also had conversations with Joel Horowitz, then chairman of the board, to express Gehring’s concerns about the financial results of the U.S. wholesale operations and his interest in the acquisition. From these interactions, Gehring concluded he would need to secure financing to make his bid credible to Tommy Hilfiger’s board, and he called Silas Chou to discuss potential options. Chou committed his financial support, conditional on Gehring finding a private equity firm to support his bid. Gehring also secured some financing from a European bank, but again the financing was conditional on a private equity-led transaction. In March and April 2005, Gehring and Onnink met with several private equity firms and financial institutions to discuss their interest in acquiring Tommy Hilfiger. In May 2005, Gehring delivered a letter to the board of directors of Tommy Hilfiger, backed with equity financing from Apax Funds and debt financing from Citibank, expressing their joint interest in making a proposal to acquire Tommy Hilfiger for $14.50 in cash per share (representing a 33% premium over the most recent closing price of $10.91). The board rejected the offer but retained J.P. Morgan as a financial advisor to seek additional offers from potential buyers, whether strategic or financial. Gehring and Onnink were appointed the new CEO and CFO, respectively. Hilfiger and Horowitz were invited into the transaction as co-investors and board members. The Way Forward Gehring and Onnink were now in control of the business. They realized they needed to start executing their plan immediately. Could they turn the company’s performance around in the U.S.? And what changes, if any, should they make to support the global expansion of the company? What should their immediate next steps be? The Turnaround (2006–2010) Between signing the transaction documentation in December 2005 and completing the acquisition in May 2006, Gehring and Onnink worked with the Apax team to put together a detailed 100-day plan that included all initiatives the new management team was going to implement immediately after taking charge. Gehring relocated from Amsterdam to New York to take over and initiate a set of radical changes to the U.S. operations right after the closing in May 2006. Approximately 40% of wholesale and corporate staff positions in the U.S. were eliminated, and three distribution centers in the U.S. were consolidated into one site. In terms of the brand portfolio, Karl Lagerfeld and the Tommy Hilfiger brand extension “H” were closed in New York, which resulted in additional savings. The worldwide trademarks for Karl Lagerfeld, Lagerfeld Gallery, and KL Lagerfeld/Lagerfeld had been acquired by Tommy Hilfiger in January 2005. One of the core components of Gehring’s plan was the importance of changing the brand’s perception and positioning in the U.S. The objective was to move from the blurred positioning between low-tier urban street wear and the mid-tier “traditional” brand (competing with Nautica and Charter Club) to a best-in-class “neo-traditional” brand (competing with J. Crew and Polo Ralph Lauren). A turning point in the company’s wholesale strategy was an exclusive distribution deal with Macy’s. In a first-of-its-kind deal that was later adopted by several other brands, the company agreed to eliminate distribution through all other stores in exchange for “most favored nation” status with Macy’s. The collaboration between Gehring and Onnink on the one hand and Apax on the other was crucial to effect this transformation. In May 2010, Apax sold Tommy Hilfiger to Phillips-Van Heusen Corporation, now known as PVH Corp. (NYSE: PVH), for a total consideration of approximately €2.2 billion ($3.0 billion), including €1.9 billion ($2.6 billion) in cash and €276 million ($380 million) in PVH common stock. The price achieved by Apax at exit was almost twice what it paid for Tommy Hilfiger in 2006. This implied that Apax achieved a 5 times money multiple on its equity investment in the transaction. Tommy Hilfiger in 2014 The Tommy Hilfiger business progressed well after the transaction between Apax and PVH. European growth kept up its momentum even during the extremely turbulent European debt crisis and the related recessionary environment that was triggered by it. The pan-European penetration of the brand proved to be a significant strong point whereby a slowdown in business in the Southern European markets was offset by ongoing growth in the Northern markets. The Hilfiger brands generated significant revenue for PVH. In 2012, the Tommy Hilfiger North America segment generated earnings for interest and taxes (EBIT) of $183 million on total revenue of $1.4 billion. This represented significant growth over 2010, when EBIT for North America was $111 million. Meanwhile, the Tommy Hilfiger International segment generated EBIT of $243 million on $1.8 billion of total revenue. Similar to North America, the 2012 EBIT represented significant growth over the 2010 figure of $155 million. In November 2013 Gehring announced his plans to retire from his CEO position during the second half of 2014 and to hand over leadership of the company to long-time associate Daniel Grieder, a 52-year-old Swiss national who has been with the company in various roles since 1997, most recently as CEO of the European business. PVH reached an agreement with Gehring to continue with the company on an ongoing basis as chairman of Tommy Hilfiger and vice chairman of PVH Corp. Onnink also announced his planned resignation effective April 2014, when he would seek new entrepreneurial endeavors but remain involved with the company in an advisory capacity for another year.

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

What is the case about?

What are the important events that occurred in the case?

What can we learn from reading the case?

What advice do you have for the leaders in the case and/or company in the case?

Robert Montoya, Inc., is a leading producer of wine in the United States. The firm was founded in 1950 by Robert Montoya, an Air Force veteran who had spent several years in France both before and after World War II. This experience convinced him that California could produce wines that were as good as or better than the best France had to offer. Originally, Robert Montoya sold his wine to wholesalers for distribution under their own brand names. Then in the early 1950s, when wine sales were expanding rapidly, he joined with his brother Marshall and several other producers to form Robert Montoya, Inc., which then began an aggressive promotion campaign. Today, its wines are sold throughout the world.

            The table Wine market has matured and Robert Montoya's wine cooler sales have been steadily decreasing. Consequently, to increase winery sales, management is currently considering a potential new product: a premium red wine using the cabernet sauvignon grape. The new wine' is designed to appeal to middle-to-upper-income professionals. The new product, Suave Mauve, would be positioned between the traditional table wines and super premium table wines. In market research samplings at the company's Napa Valley headquarters, it was judged superior to various competing products. Sarah Sharpe, the financial vice president, must analyze this project, along with two other potential investments, and then present her findings to the company's executive committee.

            Production facilities for the new wine would be set up in an unused section of Robert Montoya's main plant. New machinery with an estimated cost of $1,800,000 would be purchased, but shipping costs to- move the machinery to Robert Montoya's plant would total $80,000, and installation charges would add another $120,000 to the total equipment cost. Furthermore, Robert Montoya's inventories (the new product requires aging for 5 years in oak barrels made in France) would have to be increased by $100,000. This cash flow is assumed to occur at the time of the initial investment. The machinery has a remaining economic life of 4 years, and the company has obtained a special tax ruling that allows it to depreciate the equipment under the MACRS 3-year class life. Under current tax law, the depreciation allowances are 0.33, 0.45, 0.15, and 0.07 in Years 1 through 4, respectively. The machinery is expected to have a salvage value of $200,000 after 4 years of use.

            The section of the plant in which production would occur had not been used for several years and, consequently, had suffered some deterioration. Last year, as part of a routine facilities improvement program, $300,000 was spent to rehabilitate that section of the main plant. Earnie Jones, the chief accountant, believes that this outlay, which has already been paid and expensed for tax purposes, should be charged to the wine project. His contention is that if the rehabilitation had not taken place, the firm would have had to spend the $300,000 to make the plant suitable for the wine project.

            Robert Montoya's management expects to sell 125,000 bottles of the new wine in each of the next 4 years, at a wholesale price of $50 per bottle, but $30 per bottle would be needed to cover cash operating costs. In examining the sales figures, Sharpe noted a short memo from Robert Montoya's sales manager which expressed concern that the wine project would cut into the firm's sales of other wines-this type of effect is called cannibalization. Specifically, the sales manager estimated that existing wine sales would fall by 5 percent if the new wine were introduced. Sharpe then talked to both the sales and production managers and concluded that the new project would probably lower the firm's existing wine sales by $60,000 per year, but, at the same time, it would also reduce production costs by $40,000 per year, all on a pre-tax basis. Thus, the net externality effect would be -$60,000 + $40,000 = -$20,000. Robert Montoya's federal-plus-state tax rate is 40 percent, and its overall cost of capital is 10 percent, calculated as follows:

                                    WACC = W_d r _d (1-T) + W_sr_s

                                                = 0.5(10%) (0.6) + 0.5(14%)

                                                = 10%.

            Now assume that you are Sharpe's assistant and she has asked you to analyze this project, along with two other projects, and then to present your findings in a "tutorial" manner to Robert Montoya's executive committee. As financial vice president, Sharpe wants to educate some of the other executives, especially the marketing and sales managers, in the theory of capital budgeting so that these executives will have a better understanding of capital budgeting decisions. Therefore, Sharpe wants you to ask and then answer a series of questions as set forth next. Keep in mind that you will be questioned closely during your presentation, so you should understand every step of the analysis, including any assumptions and weaknesses that may be lurking in the background and that someone might spring on you in the meeting.

5. Estimate the project’s operating cash flows. (Hint: Again use Table 1 as a guide.) What are the project’s NPV, IRR, modified IRR (MIRR), and payback? Should the project be under-taken?

Fill in Xs. Payback period of S = about 2 years, L = about 3 years. Omit MIRR.

6. Now suppose the project had involved replacement rather than expansion of existing facilities. Describe briefly how the analysis would have to be changed to deal with a replacement project.

Depreciable basis = price + freight + installation. In year 1, 2,000,000 X 33% (or 0.33) MACRS factor = 660,000 (depreciation expense). 2,000,000 – 660,000 = 1,340,000 end-of-year book value.

            MACRS          Depr.               End-of-year

Year    Factor              Expense           Book Value

1         33%                     660,000                  1,340,000

2          X                     X                                 X

3          X                     X                                 X

4          7                     140,000                                0                   

            100%               1,800,000

Cash Flow Statements:

                                    Year 0             Year 1             Year 2             Year 3             Year 4

Unit price                                            $           50       X                     X         $          50

Unit sales                                            100,000        X                     X              100,000

Revenues                                             5,000,000        X                     X         5,000,000

Operating costs                                   3,000,000        X                     X         3,000,000

Depreciation                                           660,000        X                     X              140,000

Other project effects                              20,000        X                     X                20,000

Before tax income                               1,320,000        X                     X         1,840,000

Taxes                                                     528,000        X                     X              736,000

Net income                                             792,000        X                     X         1,104,000

Plus depreciation                                    660,000        X                     X              140,000

Net op cash flow                                 1,452,000        X                     X         1,244,000

Salvage value                                                                                                       200,000

SV tax                                                                                                                            X

Recovery of NWC                                                                                                       X

Termination CF                                                                                                              X

Project NCF                ($-2,100,000)              X         X                     X                        X

                                    =========                =          =                      =                         =

Hello, I am using IntelliJ IDEA with JavaFX to build a travel expensive calculator, but I dont konw how to conver user input to doulbe. Pleasse teach me how to add all textfield and display it after I click submit.

public class Main extends Application {

    @Override
    public void start(Stage primaryStage) throws Exception{

        Label label1 = new Label ("(1) Number of days on the trip");
        Label label2 = new Label ("(2) Transportation cost (choose one only)");
        Label label3 = new Label ("Airfare Cost ");
        Label label4 = new Label ("Miles driven  ");
        Label label5 = new Label ("(3) Conference registration cost ");
        Label label6 = new Label ("(4) Lodging Cost (per night) ");
        Label label7 = new Label ("(5) Food cost (total) ");
        Label label8 = new Label ("(6) Lodging Cost (per night) ");
        Label TotalExpensive = new Label("Total expenses: ");
        Label TotalExpensiveResult = new Label(" ");



        TextField field1 = new TextField();
        TextField field2 = new TextField();
        TextField field3 = new TextField();
        TextField field4 = new TextField();
        TextField field5 = new TextField();
        TextField field6 = new TextField();
        TextField field7 = new TextField();


        Button button1 = new Button ("Submit"); //Create submit button
        Button button2 = new Button ("Cancel"); //Create Cancel button

        HBox hBox = new HBox(20, label1, field1);
        HBox hBox1 = new HBox(10, label2);
        HBox hBox2 = new HBox(15, label3, field2);
        HBox hBox3 = new HBox(10, label4, field3);
        HBox hBox4 = new HBox(12, label5, field4);
        HBox hBox5 = new HBox(32, label6, field5);
        HBox hBox6 = new HBox(75, label7, field6);
        HBox hBox7 = new HBox(32, label8, field7);
        HBox hBox8 = new HBox(20, button1, button2);
        HBox hBox9 = new HBox(20, TotalExpensive, TotalExpensiveResult);


        hBox.setAlignment(Pos.BASELINE_RIGHT);
        hBox1.setAlignment(Pos.BASELINE_LEFT);
        hBox2.setAlignment(Pos.BASELINE_RIGHT);
        hBox3.setAlignment(Pos.BASELINE_RIGHT);
        hBox4.setAlignment(Pos.BASELINE_RIGHT);
        hBox5.setAlignment(Pos.BASELINE_RIGHT);
        hBox6.setAlignment(Pos.BASELINE_RIGHT);
        hBox7.setAlignment(Pos.BASELINE_RIGHT);
        hBox8.setAlignment(Pos.CENTER);
        hBox9.setAlignment(Pos.CENTER);

        hBox.setPadding(new Insets(0,0,15,0));
        hBox3.setPadding(new Insets(0,0,15,0));
        hBox8.setPadding(new Insets(25,0,15,0));



        GridPane gridPane = new GridPane ();

        gridPane.add(hBox, 0, 0);
        gridPane.add(hBox1, 0, 1);
        gridPane.add(hBox2, 0, 2);
        gridPane.add(hBox3, 0, 3);
        gridPane.add(hBox4, 0, 4);
        gridPane.add(hBox5, 0, 5);
        gridPane.add(hBox6, 0, 6);
        gridPane.add(hBox7, 0, 7);
        gridPane.add(hBox8, 0, 8);
        gridPane.add(hBox9, 0, 9);

        //*******Here*********
        button1.setOnAction(event -> {
            double cost = field1;
            TotalExpensiveResult.setText("Total Cost: $" + cost);
        });




        gridPane.setAlignment(Pos.CENTER);
        gridPane.setPadding( new Insets(20, 20, 20, 20));
        gridPane.setVgap( 10);
        gridPane.setHgap( 10);

        primaryStage.setTitle("Travel Expenses Calculator");
        primaryStage.setScene(new Scene (gridPane));
        primaryStage.show();


    }

Special Checking Is Handed a Loss Sammy Benson supervised greater Downtown Bank's Special Check Sorting Unit, which processed odd-sized, foreign, and damaged checks. Once the checks were sent to his unit, they were manually interpreted, recorded, entered into the appropriate account transactions, and filed for return. Sammy supervised three check sorting clerks in his department. These jobs were staffed by relatively untrained, entry-level individuals who had just graduated from high school. During the summer, Greater Downtown Bank hired low-income, disadvantaged young people for various jobs throughout the company as part of its Community Upbeat campaign. To participate in this effort, representatives from the Human Resources Department visited selected high schools to interview students. Since the students were already prescreened by the school, the interviews were little more than "get-acquainted" discussions. Last summer, Sammy's unit supplied one of the jobs in this effort. Juanita Perez was hired in this context to work as a Special Checks clerk. She was scheduled to begin working in June after graduating from the local vocational high school, where she maintained a C average. This was her first full-time job. When Juanita reported to the bank for a brief induction program, she was scared. It was not only her first day on the job, but the first time she had ever been in the bank. Nevertheless, she kept up her courage and reported to the Human Resources Department as planned. After waiting in the lobby for a while, she was taken to a small meeting room where she and two other new hires were shown how to fill out and sign various forms and documents. Next, an administrative assistant read to the new hires a series of personnel policies about work schedules, breaks, overtime, pay secrecy, attendance, and benefits. She signed more forms, wondering what all this meant. As the meeting drew to a close, Sammy Benson arrived after receiving a call from Human Resources. He and Juanita were introduced for the first time. Sammy escorted Juanita back to the Human Resources Department, showing her the bank's various offices and other departments. He gave her a quick tour of his area, introducing her to the other clerks as he went. Sammy was careful not to interrupt their work, however, nor did he explain to Juanita what they were doing. It was obvious by the expressions on their faces that the employees were surprised to see her. After a quick tour and passing introductions, Sammy gave Juanita some basic instructions in her job. He gave Juanita the job of processing foreign checks. He felt this task was the easiest job to learn and do correctly. During her first day on the job, Sammy spent about 15 minutes showing her the procedure: inspect, record, enter, adjust, file. Since he had to prepare for a meeting later that day, that was all the time he could spend with her. By the end of the first week, Juanita seemed to be getting the hang of things: She came to work on time, stayed busy, and was fairly pleasant and easy to get along with. Sammy intended to spend as much time as possible with her during this period; however, because she seemed to catch on quickly and he was very busy, he saw her only occasionally over the next few weeks. Then, after about a month, Juanita called in sick one day. A replacement was brought in, and as she looked through Juanita's desk for a notepad, she found what appeared to be a large pile of unfiled checks. When Sammy looked through the pile, he found that there were, in fact, quite a few unprocessed checks, some of which dated from Juanita's first day on the job. As they were the more unusual kinds of checks the department handled, Sammy assumed that she apparently had not known how to process them. Unfortunately, the combined value of these checks totaled around $65,000. The bank had lost the "float" value on them, and Sammy knew that customer complaints would be coming in soon. Sammy expected Juanita to come back to work the following day, and he wondered if he should write up a warning notice for her immediately. (Source: Alan Clardy, Ph.D., Advantage Human Resources, HRD Press, 1994) Based on the case study, answer the following questions. 1 Why do you think the problem occurs? What probably cause the problem of Juanita's poor performance? Explain.

2 Sammy is considering issuing a formal written warning notice to Juanita upon her return.

a) Do you think this is an appropriate action to take? Why is it and why is it not? Discuss.

] b) How can Sammy be sure he is making the right decision either to issue or not issuing the warning notice? Propose two (2) possible ways that can guide Sammy in making effective decisions.

3 What could be done by Sammy to manage Juanita's poor performance problem? Suggest four (4) methods of how Sammy can provide Juanita with skills and knowledge to improve her performance. Provide suitable example to support your answer.

4 Managers have the most significant impact on employee performance. Based on this statement, how would Sammy align the performance of his staff with the organizational goals? Propose four (4) work practices that Sammy can apply which lead to both high individual and high organizational performance. Provide suitable example to support your answer.

1. Buyers of new cars can consider Internal Combustion Engine (ICE) cars or new electric cars (EVs). If the price of ICE cars goes up because of a higher carbon tax, then the demand for EV cars will increase. Is it True or False?

2. An increase in the cost of aluminium will cause the supply of soft-drink cans to increase. Is it True or False?

3.The incidence of a tax is shared between buyers and sellers in the long run, whether or not the industry is constant cost. Is it True or False

4. An increase in the demand for avocados will in the short run, lead to a rise in the equilibrium price of avocados and more growers will enter the industry. Is it True or False