Question: What is the amount of cash received from the sale of special materials if Horizon Insurance elects to outsource publishing to G-Art?

Use the following case to help answer this question:

Horizon Insurance (HI) was a full-service regional insurance agency that has done all the printing and publishing of its own promotional brochures, newsletters, informational pamphlets, and required regulatory reports. Linda Wolfe, the business manager of the agency, had for some time thought that the firm might save money and get equally good services by contracting the publishing work G-Art Inc. She asked G-Art Inc. to give her a quote at the same time she asked Bob Myer her controller to prepare an up-to-date statement of the cost of operating Horizon’s publishing department.

Within a few days, the quote from G-Art Inc. arrived. The firm was prepared to provide all the required publications work for $ 410,000 a year with the contract running a guaranteed term of 4 years with annual renewals thereafter. If the estimated number or assumed mix of publications changed in any given year beyond the baseline planning estimates, the contract price would be adjusted accordingly. Wolfe compared G-Art’s quote with the internal cost figures prepared by Myer:

Table 1; Annual cost of operating HI’s publications department: Myer’s figures.

Materials                                                                                                             $40,000

Labor                                                                                                                 $290,000

Department overhead

Manager’s salary $48,000                                  

Allocated cost of office space                                  $10,000

Depreciation of equipment                                       $32,500

Other expenses (travel, education, ect.) $25,000

                                                                                                                             $115,500

                                                                                                                            $445,500

Share of company administrative overhead $30,000

Total cost of department for year $475,000

Wolfe’s initial conclusion was to close Horizon’s publications department and immediately sign the contact offered by G-Art. However, she felt it prudent to give the manager of the department, George Richards, an opportunity to question that tentative conclusion. She called him in and put the facts before him, while at the same time making it clear that Richards’ own job at the agency was not in jeopardy.

Richard came up with the following to keep in mind before his department was closed:

For instance, what will you do with the customed graphic design and printing equipment? It cost $260,000 four years ago, but you’d be lucky if you got $80,000 for it now, even though we had planned on using it for another four years at least. Andthen there is the sizable supply of print materials that includes a lot of specialized ink, specialty card stock, paper, envelopes ect. We bought the custom supplies a year ago when we were pretty flush with cash. At that time it cost us about 125,000 and at the rate we are using it now, it will last us another four years. We used up about one-fifth of it last year. As best as I an tell, Myer’s figure of $40,000 for materials includes about $25,000 for these customized sipplies and $15,000 for generic supplies we use on a regular basis. If we were to buy these custom supplies today it would probably cost us 110% of what we paid for it. But if we try to sell it, we would probably get only 60% of what we paid for it.

Wolf thought that Myer ought to be present during this discussion. She called him in and put Richard’s points to him. Myer said:

If we are going to have all of this talk about “what will happen if” don’t forget the problem of space we’re faced with. We’re paying 12,000 a year in outside office space. If we close Richard’s department we could use of the freed-up space as office space and not need to rent it on the outside.

Wolfe replied:

That’s a good point, though I must say I’m a bit worried about the people if we close the publications department. I don’t think we can find room for any of them elsewhere in the firm. I could see whether G-rt can take any of them, but some of them are getting odler. There’s Walters and Hines, for example. They’ve been with us since they left school 40 years ago, and I think their contract requires us to give them a total severance payoff of about $60,000 each, payable in equal amounts over four years.

Richards showed some relief at this. “ But I still don’t like Myer’s figures” he said. “What about the $30,000 for general administrative overhead. You surely don’t expect to fire anyone in the corporate office if Im closed, do you?

“Probably not” said Myer, but someone has to pay for those costs. We can’t ignore them when we look at an individual department, because fi we do that with each department in turn, we will convince ourselves that accountants, laywers, vice presidents, and the like don’t’ have to be paid for. And they do, believe me”

Clarification: In the fact set, Custom Supplies are expected to sell for 60% of what the company paid for them. Assume (to make numbers cleaner), that this is 60% of their 'current' book value of $100,000 (derived from the fact set), not the original cost.

Balance sheets for Salt Company and Pepper Company on December 31, 2018, follow:

Pepper Company tentatively plans to issue 30,000 shares of its $20 par value stock, which has a current market value of $37 per share net of commissions and other issue costs. Pepper Company then plans to acquire the assets and assume the liabilities of Salt Company for a cash payment of $800,000 and $300,000 in long‐term 8% notes payable. Pepper Company's receivables include $60,000 owed by Salt Company. Pepper Company is willing to pay more than the book value of Salt Company assets because plant assets are undervalued by $215,000 and Salt Company has historically earned above‐normal profits.

Prepare a pro forma balance sheet showing the effects of these planned transactions.

4. DNS hijacking is a common technique that is used by censors (i.e., networks who perform censoring actions), where fake DNS responses can be injected. As a DNS request could traverse a number of routers along the path, each router along the path could inject a fake DNS response. In the paper “The Collateral Damage of Internet Censorship by DNS Injection”, authors use a technique similar to traceroute to identify the router that actually injects the fake DNS response. Authors deliberately decrease the TTL (time-to-live) value in the IP header to monitor ICMP packet and fake DNS response to decide the router that injects fake response. In this paper, DNS is built on UDP. However, DNS can also be built on top of TCP. This expands the attack surface for attackers. Specifically, the censors inject RST packets to both the client and the server in one TCP connection if a DNS query in this connection carries “sensitive” information. Different from UDP, TCP requires three-way handshake. Therefore, the packet that carries sensative information (e.g., a TCP-based DNS query) will be the packet that comes later than packets for three-way handshake. Let us make the following assumptions for this question 1. We assume that DNS over TCP is using a publicly-known port number. 2. Censors are stateless, which means that they will not consider whether a TCP packet belongs to an established connection. They make decision based on each individual packet instead of packets belonging to the same connection. In order to make the method discussed in “The Collateral Damage of Internet Censorship by DNS Injection” to be useful in this new setting, we need to make a few changes of this method. Question: Please verify whether each of the following changes is needed or not (1 Point). And please justify your answer (1 Points). a. When you select a target IP to send honey queries, this IP should never respond you with TCP RST packets if you send a TCP-based DNS query to this IP. b. When you send out a honey query (a TCP-based DNS query with a sensitive domain) to a target IP, you can directly send this TCP-based DNS query to this target IP without establishing a TCP connection with the target IP (i.e., through 3-way handshake). c. You should now expect RST packets from the censor rather than a forged DNS response.

Kit Kat is the UK's best-selling chocolate bar. 650 bars are consumed every second globally. Kit Kat was introduced in 1958 and continues to generate strong consumer demand. In 2009, Kit Kat was listed as one of Time’s “13 Most Influential Candy Bars of All Time”. Kit Kat is also the number one best-selling chocolate in Japan, and the only non-American brand in America’s list of top 5 chocolate favorites. Kit Kat is the world’s first chocolate bar made from 100% sustainable cocoa. Kit Kat has a case to be the healthiest candy bar in the market. Kit Kat’s tagline is a simple and memorable “Have a break...Have a Kit Kat!” one that effectively communicates the brand’s vision. With such a catchy tagline, Kit Kat has branded itself as the go-to social snack for people of all ages. In late 2013, just as Kit Kat was searching for the next brand to partner with, Google approached Kit Kat with a proposal to name version 4.4 of their Android operating system the Android Kit Kat.

However, in the competitive modern world consumers' tastes continually change. There has been in recent years an ongoing revolution in modifying products. In previous times, sweets and chocolate bars remained in more or less the same form for many years. Today, however, modern sophisticated consumers constantly seek novelty and change, and consumers have become the driving force behind product modification.

Although Kit Kat continued to be the Number 1 confectionery brand, by the late 2010s its volume sales were falling. Faced with several increasingly attractive competitive offerings, consumers began to see Kit Kat in its traditional form as lacking in excitement and interest, with purchases being driven more by habit than positive choice. Although the four-finger Kit Kat continued to be highly popular with its core target market of 25-40-year-olds, it was losing popular appeal with younger consumers.

The image problem was most evident among core count line consumers i.e. The youth segment those who are between the ages of 12-20-year-olds. In this important age group, while Kit Kat had been part of 'growing up' and may also have made regular appearances in lunch boxes, it was hardly relevant to their lifestyle. Moreover, Kit Kat created the International Youth Day that supports the youth of today to move forward in their dreams and aspirations along with enjoying their breaks. Kit Kat intensifies its promotion campaign to this segment during exams time. Students after being exhausted from studying turn to Kit Kat for a break. Kit Kat recognizes the power of digital networks and social media platforms in influencing the youth consumer choice and strategically uses social media to win their affections. The traditional four-finger Kit Kat did not seem relevant to them. In 2011 therefore, Nestlé felt it was time for some re-invention. The company decided to develop a new format of Kit Kat whilst still retaining the four-finger variety with which consumers are so familiar.

Nestle is a market-focused producer that recognizes the need for regular change. This is required because consumers want and demand change, rival firms are constantly re-inventing themselves and their products and, innovation and inventiveness keep an organization flexible and able to respond to further change.

To find out exactly what consumers were looking for, Nestlé carried out detailed market research, including detailed qualitative research. Many pairs of young people were invited to give their views on different formats for the new product whether they preferred one or two fingers, what flavors they preferred (caramel, peanut butter, orange jelly, chocolate layers, etc). Researchers also considered the most appropriate form of packaging to add further interest and attraction to the product. A survey group might consist of, for example, males and females who were 17, 18, 19 or 20 years old, of different ethnic origin, from different parts of the UK, and a mix of students and non-students.

A top Kit Kat competitor, Cadbury is an international confectionery company that is headquartered in London, United Kingdom. It was founded during the year 1824 and the company is owned by Mondelez International since 2010. Cadbury's main objective is to become the World’s biggest confectionery company in the world. Cadbury brand is considered as the second-largest brand in the world. It has its business operations in about 50 countries. Cadbury always seeks to challenge Kit Kat in every segment of the market. Cadbury is legally fighting Nestlé over the shape of Kit Kat. In short Cadbury and Nestlé are bitter rivals and Cadbury is looking for the appropriate time to attack Nestlé.

Questions:
1- As a manager for Kit Kat brand in Lebanon, critically analyze what kind of strategies you can apply during maturity stage and during this time of the corona virus time. Explain the different kinds of strategies and support your answer with real example.

2- An important function of marketing is to drive growth in sales and revenue for a company. Explain all growth strategies that Kit Kat can apply in order to achieve comptetive advantages over Cadburys. What specific strategy would you recommend and why? Support your answer with examples.

3- Evaluate how Kit Kat should segment its market. Which segmentation variable is the most applicable for Kit Kat and what are the criteria they must consider?

4- Not everyone who buys a product has the same needs or wants the same benefits from it. Based on the above statement, discuss and explain how Kit Kat can identify their distinctive market segments with clear marketing implications.

I bought a new car recently -- a Kia Forte. Kia, of course, is a South Korean company. The price sticker says 2% of the parts in my car were made in the US or Canada, 55% were made in Mexico, and 43% were made in Korea. Final assembly of the vehicle was in Mexico. I bought it at a dealership here in Phoenix. So which country gets GDP credit for this car? Why?

Your company is looking at a new project in Mexico. The project will cost 1,075,000 pesos. The cash flows are expected to be 375,000 pesos per year for 5 years. The current spot exchange rate is 19.07 pesos per dollar. The risk-free rate in the US is 4%, and the risk-free rate in Mexico 8%. The dollar required return is 10%. What is the net present value of this investment in U.S. Dollars?

Look at the data from Table C6-3 relating to group rentals.

-How many different samples of 3 are possible?

-List all possible samples of size 3, and compute the mean number of group rental

instances in each sample.

-Compare the mean of the distribution of sample means to the population mean.

Use MINITAB to solve the following:

Data were collected on the amount of free memory during peak usage times of the AIX system on a university campus. The unit used was real memory page (4096 bytes). Suppose that the free memory is normally distributed. Using a significance level of 0.02, is there evidence that the standard deviation in the population of free memory during peak usage time is different from 100?

Use MINITAB to solve the following:

Data were collected on the amount of free memory during peak usage times of the AIX system on a university campus. The unit used was real memory page (4096 bytes). Suppose that the free memory is normally distributed. Using a significance level of 0.02, is there evidence that the standard deviation in the population of free memory during peak usage time is different from 100?

On 31 October 2013, Josh borrowed money from his parents. He promised that he would repay the money on 31 October 2017, with interest at a nominal interest rate of 7% p.a., compounding quarterly. The total amount that he was due to pay his parents at that time was exactly $10,000 but he started his studies at university so he couldn’t afford to repay the loan. If interest continues to accrue, what amount must Josh pay on 31 October 2022 to fully pay off the loan?