Ariel Sunnyvale graduated from university six years ago with an undergraduate degree in finance. Although she is satisfied with her current job, her goal is to become an investment banker. She feels that an MBA degree would allow her to achieve her goal. After examining schools, she has narrowed her choice to either Northern University or Southern University. Although internships are encouraged by both schools, to get class credit for the internship, no salary can be paid. Other than internships, neither school will allow its students to work while enrolled in its MBA program. Ariel currently works at the money management firm of Greyson Partners. Her annual salary at the firm is $64,000 per year, expected to increase at 2.75 percent per year until retirement. She is currently 30 years old and expects to work for 37 more years. Her current job includes a fully paid health insurance plan, and her current average tax rate is 25 percent. Ariel has a savings account with enough money to cover the entire cost of her MBA program. The Faculty of Management at Northern University is one of the top MBA programs in the country. The MBA degree requires two years of full-time enrollment at the university. The annual tuition is $50,000, payable at the beginning of each school year. Books and other supplies are estimated to cost $3,000 per year. Ariel expects that after graduation from Northern, she will receive a job offer for about $88,000 per year, with a $5,000 signing bonus. The salary at this job will increase at 3 percent per year. Because of the higher salary, her average income tax rate will increase to 27 percent. The School of Business at Southern University began its MBA program 16 years ago and is less well known than Northern University's Faculty of Management. Southern University offers an accelerated, one-year program, with a tuition cost of $80,000 to be paid upon graduation. Books and other supplies for the program are expected to cost $4,500. Ariel thinks that she will receive an offer of $100,000 per year upon graduation, with an $15,000 signing bonus. The salary at this job will increase at 3.5 percent per year. Her average tax rate at this level of income will be 28.5 percent. Both schools offer a health insurance plan that will cost $3,000 per year, payable at the beginning of the year. Ariel also estimates that room and board expenses will cost $2,000 more per year at both schools than her current expenses, payable at the beginning of each year. The appropriate discount rate is 6.5 percent.
1. What other, perhaps non-quantifiable, factors affect Ariel's decision to get an MBA?
2. Assuming all salaries are paid at the end of each year, which is the best option for Ariel—from a strictly financial standpoint.
3. Suppose, instead of being able to pay cash for her MBA, Ariel must borrow the money. The current borrowing rate is 3.75 percent. How would this affect her decision?
In: Finance
Jimmy and Jane Have Goals Jimmy Johnson is 25 years old. He and his wife Jane have two children, Emmitt and Patricia, ages 2 and 4 respectively. Jimmy wants to retire in 40 years and build boats. He would like a nice retirement home with some land on a peaceful lake in the mountains of Georgia. Jimmy believes that to purchase a home and lot in 40 years would cost $300,000 in today’s prices. In forty years Jimmy also believes he and Patricia can live comfortably on $50,000 a year in today's dollar terms. Realizing that retirement is only 40 years away, and that he still had two children to raise and put through college, Jimmy thought he had better start saving for his retirement dreams. Also, Patricia is only 14 years away from college, and before Patricia finishes, Emmitt will be ready for school in 16 years. Currently Jimmy has $25,000 in an emergency money market account earning 2.0% interest compounded daily. His desire is to never have to use those emergency funds and that they will become a part of his estate. He also owns his own home that has a market value of $225,000 and a mortgage of $150,000. The 5.0% mortgage has 27 years remaining and his monthly payments are $1126 for principal and interest alone. Jimmy’s annual salary is $60,000. His employer puts an additional $3,000 into a 401(k) retirement plan. This retirement amount currently equals $9,000 and it is invested in a stock mutual fund, which has been earning an annual rate of return of 8.0%.
With the current level of the federal debt, Jimmy is not counting on receiving any funds from social security at his retirement. With all of the concern about college tuition increasing over the years, Jimmy believes that the children will have to go to the local junior college for their first two years and then a state school for their last two years. The cost to attend the local junior college is $5,000 per year today, and the cost to attend a state school is $15,000 per year today. Inflation will have a great impact on Jimmy’s future retirement and college plans for his children. Based on what he has read and heard on the news, Jimmy believes that inflation will average 3.0% per year for the next 40 years; however, the cost of a college education will increase by 5.0% per year for the junior college and state schools. Also, with the desirability of vacation homes, the house and property in Georgia will probably increase at a rate of 5.0% per year, while his current home will increase in value at a rate of 3.0% per year. Jimmy hopes that his annual salary will increase by at least 4.0% per year. Note: For each of the computations completed below, answers can be stated to the nearest dollar.
Assuming that Jimmy has no money set aside for his children’s college at this time, approximately how much will he have to save per month for Emmitt’s education, for Patricia’s education, if he earns 7.0% on the invested funds and the balance of education funds stays invested through the end of college. (Note that this question is a two-step process for each of Emmitt and Patricia’s education.)
In: Finance
I am not sure how to approach this. You are managing a bake sale
for a club at your school. It’s being held each weekend in the fall
that the football team has a home game. This year, there will be
five home games. The club sells cookies in packages of two dozen.
The selling price per package is $8.65. The packaging material
costs $.11 (11 cents) per package. You pay the regular kitchen
staff a direct labor cost for mixing and baking at $10.50 per hour.
Baking utensils and supplies for the entire season will cost $500
(excluding the direct costs of cookies) . Before each game, the
cookies are prepared in a school kitchen for a fixed rental fee of
$90 per session and clean-up labor is paid a fixed total of $50 per
session. You estimate that 500 packages of cookies will be baked
for each sale and that 96% of them will be sold. Alumni volunteers,
who receive no compensation, sell half of the packages and
students, who receive a commission of $.15 per package, sell the
other half. You plan to run an advertisement in the school
newspaper before all five games and each advertisement costs $200.
You are to: 1) Go to the internet and find a cookie recipe. Your
recipe must have at least 5 ingredients. 2) Research the prices of
the cookie ingredients at a local supermarket, warehouse or online
grocer. Do NOT change the recipe. To convert the recipe quantities,
you can use an online conversion calculator. There are several
available so use your favorite search engine. 3) Develop a budget
for the five bake sales. Give the amounts per each sale and the
budget in total. You are free to develop any format for the budget.
I encourage you to develop a format that is most useful to you.
Make sure your budget is complete in that it includes both expected
income and expected expenses with a bottom line expected net
income. Use your imagination when it comes to the direct labor
calculation. Your kitchen can be large and full of commercial
ovens. 4) Analyze the club’s fundraising effort in written format.
5) Make suggestions for next year’s bake sale manager, including
those suggestions that would improve the bottom line with
approximations of how much the bottom line will improve.
You will submit in your packet: Title page with name of student
who completed the analysis. Be sure to acknowledge those students
who you worked with. Your recipe including quantity and cost of
the ingredients along with the source of the prices and directions
for baking. Your budget. Be sure that all items are labeled to
make it understandable. Your analysis, unique to each student,
which should be at 2-3 pages in length. You might begin with an
overview of the project, then analyze the results, and finally
suggest alternative courses of action that would improve on the
success of the project. Write as if you are providing this packet
to your club faculty advisor and also to the next year’s bake sale
manager. Specifically use their names in the report. Have fun, be
creative and include any additional items.
In: Accounting
2. The population mean for commute time is 25.1 minutes and the standard deviation is 10.2 minutes in Aurora, CO.
a) Based on a sample size of 35 individuals, determine the two-sided 90% confidence interval for the distribution of commute times for this population.
b) The sample that we selected above has a mean commute time of 35 minutes. Based on our confidence interval, does the sample of individuals appear to be representative of the population? Why or why not?
2. We want to determine whether UCCS students who are successful in getting into grad school have higher GRE scores compared to all UCCS students who took the GRE exam. We select a random sample (n=20) of successful grad school applicants from UCCS. Based on our sample, the mean is 550 and the standard deviation is 60. The population mean for all UCCS students who took the exam was 480. GRE scores are normally distributed.
a) What would be the 2-sided 99% confidence interval?
b) Based on the 99% confidence interval, do successful grad school applicants appear to have a higher average score on the GRE exam compared to all UCCS students who took the exam? Why or why not?
3. In an effort to determine whether exposure to high lead levels has an effect on blood pressure in young children, blood-pressure measurements were taken on 30 children aged 5-6 years living in a specific community exposed to high lead levels. For these children, the mean diastolic blood pressure was found to be 66.2 mm Hg with standard deviation 7.9 mm Hg. From a nationwide study, we know that the mean diastolic blood pressure is 58.2 mm Hg for 5- to 6-year old children. We will assume that exposure to lead will have either no effect or cause an increase in blood pressure. Determine a one-sided 95% confidence interval for diastolic blood pressure among 5- to 6-year-old children in this community based on the observed 30 children. Based on this confidence interval, does it appear that children who are exposed to lead have higher blood pressure?
In: Statistics and Probability
Case Study 1
Staria is a seventeen-year-old girl who has been brought to your outpatient treatment center by her mother. Staria has been suspended from high school on two occasions over the past six weeks for fighting and disorderly conduct. She has a history of recurrent detention and classroom dismissals for similar, though less severe, behavior at her previous high school. On the last occasion, she and another student were engaged in an altercation in the hallway. When security was called in, it was discovered that Staria had a pint of vodka and a small quantity of marijuana in her locker. At the time, it was noticed that Starina seemed intoxicated. She later tested positive for marijuana.
You meet Staria and her mother and learn that Staria stole alcohol and marijuana from her father's stash and that he was outraged by the discovery. Staria blames her parents for her school dismissal and feels she is being blamed and scapegoated by her parents. According to her, her parents are the ones who need counseling. She also reports that her grandfather recently passed away due to cirrhosis. Her mother states that Staria has a twin sister, who never uses drugs, cigarettes, or alcohol and that Staria should be more like her sister.
Case Study 2
George is a civil service employee who has been struggling with
his drinking problem for years. He has tried to control his alcohol
use and has made many attempts to refrain. Lately, he has been
drinking more frequently to feel the same effect; he even drinks
before he goes to work. His family has a history of alcoholism.
Although George is aware of the genetic origins concept, he feels
embarrassed and struggles to identify himself as an alcoholic. He
compares himself with others who drink far more than he does, and
in his perception, this rationalizes that he is not that bad.
George continues to drink despite the adverse consequences on his
health and sociocultural relationships. In the past three years, he
has experienced the following consequences:
One arrest for driving under the influence (DUI)
Loss of a job
Mood swings
Fights and arguments with family members over his drinking
Frequent inability to stop drinking
Blackouts
Need for increasing amounts of alcohol in order to get high
George's present employer asks him to attend Alcoholics Anonymous meetings. George responds, "I am not like those people. I am not that bad."
Using the DSM-V criterion, diagnose Staria and George. Explain the diagnosis by incorporating discussion over the concepts of addiction (i.e., withdrawal, tolerance, physical dependence, comorbidity, and psychological dependence). Be sure to explain the selected diagnosis.
The models for substance use can be categorized as physiological and psychological. Within each of these general categories, however, are different specialized foci. Review the Theories of Alcoholism document, as well as conduct research to determine which model(s) aid in understanding what is happening with Staria and George.
In: Psychology
Case # 3: Ms. A
Ms. A is a 27 y.o. computer analyst employed at Intel, Inc. She is unmarried, has no children and has been in a significant relationship with a female partner, Tina, for 5 years. Tina and Ms. A live together in a home they own in Albuquerque.
For the past 9 months, Ms. A has been experiencing consistent and regular shakiness, sweating, shortness of breath and an exaggerated startle response. In addition, she experiences significant, unfocused worry and anxiety. Ms. A has tried to control the “worry” but to no avail. Ms. A comes to you, a Licensed Independent Social Worker in private practice, as she believes she is on the verge of having a “nervous breakdown”.
While conducting the biopsychosocial history, Ms. A advises you she has always been a “worrier”. In high school she displayed perfectionistic tendencies, often worried she would be late to school, was very compliant and had excessive concern about her school performance. Additionally, Ms. A reports regularly feeling inadequate and avoidant of people or situations for fear of being rejected or criticized. These characteristics continued through college and have become increasingly more prevalent, impacting her performance at work as well as her relationship with Tina.
Currently, Ms. A is anxious about most situations and experiences this most every day of the week. Sundays tend to be worse for her as she is thinking about returning to work on Monday. Ms. A reports she is frequently irritable and agitated with co-workers and Tina. Since her worries have intensified, she has not been able to sleep due to restlessness, is chronically tired and fatigued, has trouble concentrating and generally feels “on edge”. Her work performance has declined as she is not able to meet deadlines and frequently misses meetings. Her boss has expressed concern and urged Ms. A to seek assistance.
You note these symptoms have been present during the last 9 months. Ms. A has seen her primary care physician who indicated Ms. A is in good health. Additional history you obtain indicates no use/abuse of substances.
While exploring Ms. A’s sense of inadequacy, you discover this has been a pervasive pattern beginning in late adolescence. One of the reasons Ms. A became a computer analyst was to avoid working in “teams” which would require a great deal of interpersonal contact and interactions. She has few friends and rarely socializes for fear of being unaccepted and spurned. Ms. A’s preoccupation with being criticized or rebuffed is emotionally debilitating. Developing her relationship with Tina was extremely difficult. Ms. A felt inferior to her and attempted to sabotage the relationship several times. Only after Tina “proved” she loved Ms. A did Ms. A allow a relationship to develop. Presently, Ms. A is concerned about her relationship as Tina is regularly frustrated with Ms. A’s constant worry, feelings of inadequacy, reluctance to socialize or doing things Tina likes, such as snowboarding and cycling.
Based on the above vignette for Case #3, list the principal diagnosis/diagnoses (including any and all appropriate subtypes and specifiers)
In: Psychology
This assignment concerns the idea of "private equity," a notion that is very important to the financial strategy of firms. We had a brief discussion on Blackrock, which is a private equity firm. Many companies have recently been bought by private equity, including Dell. Private equity firms argue that they can re-engineer the firm without shareholders breathing down their neck.
But private equity can be a very dangerous thing. Private operators buy companies by borrowing money, then load the debt on the companies books, strip it of all value, and leave it to go bankrupt. A particularly egregious case involved the Simmons mattress company, and the same might be unfolding at Toys R Us.
In his 2014 letter to investors, Warren Buffet had warned about the ethics of this phenomenon:
Families that own successful businesses have multiple options when they contemplate sale. Frequently, the best decision is to do nothing. There are worse things in life than having a prosperous business that one understands well. But sitting tight is seldom recommended by Wall Street. (Don’t ask the barber whether you need a haircut.)
When one part of a family wishes to sell while others wish to continue, a public offering often makes sense. But, when owners wish to cash out entirely, they usually consider one of two paths.
The first is sale to a competitor who is salivating at the possibility of wringing “synergies” from the combining of the two companies. This buyer invariably contemplates getting rid of large numbers of the seller’s associates, the very people who have helped the owner build his business. A caring owner, however – and there are plenty of them – usually does not want to leave his long-time associates sadly singing the old country song: “She got the goldmine, I got the shaft.”
The second choice for sellers is the Wall Street buyer. For some years, these purchasers accurately called themselves “leveraged buyout firms.” When that term got a bad name in the early 1990s – remember RJR and Barbarians at the Gate? – these buyers hastily relabeled themselves “private-equity.”
The name may have changed but that was all: Equity is dramatically reduced and debt is piled on in virtually all private-equity purchases. Indeed, the amount that a private-equity purchaser offers to the seller is in part determined by the buyer assessing the maximum amount of debt that can be placed on the acquired company.
Later, if things go well and equity begins to build, leveraged buy-out shops will often seek to re-leverage with new borrowings. They then typically use part of the proceeds to pay a huge dividend that drives equity sharply downward, sometimes even to a negative figure.
In truth, “equity” is a dirty word for many private-equity buyers; what they love is debt. And, because debt is currently so inexpensive, these buyers can frequently pay top dollar. Later, the business will be resold, often to another leveraged buyer. In effect, the business becomes a piece of merchandise.
So workers and customers suffer, while financiers make money.
In this assignment, please write a 500-word analysis of private equity. Give your essay an original title. You can be pro-private equity or anti. I want you demonstrate how well you understand this concept.
In: Finance
CASE STUDY
NEW LINE IN MOBILE PHONES
One of the oldest principles of marketing is that sellers may sell features, but buyers
essentially buy benefits. This is a distinction sometimes lost on technology led organizations,
and the service sector is no exception. Recent experience of the UK’s largest
telecommunications company, Della’s, illustrates how crucial it is to see service offers in
terms of the benefits they bring to customers. The company was aware of extensive research
which had found high levels of confusion among purchasers of mobile phones, with a
seemingly infinite permutation of features and prices. With four main networks to choose
from, dozens of tariffs and hundreds of handsets, it is easy to see why buyers sought a way of
simplifying their buying process. Throughout the 1990s, Della’s had positioned its UK
network as superior technically to its competitors. Advertising focused on high coverage rates
and call reliability.
Della’s was the UK's most popular mobile phone operator, with almost eight million
customers, including 4.2 million Pay as you Talk customers. It had opened the UK's first
cellular network on 1 January 1985 and was the market leader since 1986. Della's networks in
the UK - analogue and digital - between them carried over 100 million calls each week. It
took Della’s more than 13 years to connect its first three million subscribers but only 12
months to connect the next three million. Della’s had the largest share of the UK cellular
market with 33% and had more international roaming agreements than any other UK mobile
operator. It could offer its subscribers roaming with 220 networks in 104 countries.
Despite all of the above, Della’s was aware that although it was recognized as an extremely
strong business in the corporate marketplace, it was not so strong in the market for personal
customers. Research indicated that personal buyers bought Della’s for essentially rational
reasons rather than having any emotional attachment to the brand. The success of the
competing Digital network, which had developed a very strong image, was a lesson to Della’s
that many people did not understand many of the product features on offer, but instead
identified with a brand whose values they could share. Della’s recognized that it needed to be
perceived as adding value to a consumer’s lifestyle. Given the increasing complexity of
product features, positioning on technical features was likely to make life more confusing for
personal customers. An alternative approach was needed which focused on image and
lifestyle benefits.
QUESTION
Critically analyse the information provided on Della’s position in the market, and design a marketing plan to strengthen Della’s visibility and their competitive advantage.
Thanks for your assistance!!!
In: Operations Management
Review the provisions of the Sarbanes-Oxley Act of 2002 to address the accounting scandals in the late 1990s and early 2000s (Enron, WorldCom, etc.)BELOW:
List the existing provisions in the Act do you believe (if any) are unnecessary or over-regulate the profession?
As a result of corporate accounting scandals, such as those at Enron and WorldCom, the U.S. Congress enacted the Sarbanes-Oxley Act of 2002 (SOX). The purpose of SOX is to restore trust in publicly traded corporations, their management, their financial statements, and their auditors. SOX enhances internal control and financial reporting requirements and establishes new regulatory requirements for publicly traded companies and their independent auditors. Publicly traded companies have spent millions of dollars upgrading their internal controls and accounting systems to comply with SOX regulations. As shown in Exhibit 1-10, SOX requires the company’s CEO and CFO to assume responsibility for their company’s financial statements and disclosures. The CEO and CFO must certify that the financial statements and disclosures fairly present, in all material respects, the operations and financial condition of the company. Additionally, they must accept responsibility for establishing and maintaining an adequate internal control structure and procedures for financial reporting. The company must have its internal controls and financial reporting procedures assessed annually. Some Important Features of SOX SOX also requires audit committee members to be independent; that is, they may not receive any consulting or advisory fees from the company other than for their service on the board of directors. In addition, at least one of the members should be a financial expert. The audit committee oversees not only the internal audit function but also the company’s audit by independent CPAs. To ensure that CPA firms maintain independence from their client company, SOX does not allow CPA firms to provide certain nonaudit services (such as bookkeeping and financial information systems design) to companies during the same period of time in which they are providing audit services. If a company wants to obtain such services from a CPA firm, it must hire a different firm to do the nonaudit work. Tax services may be provided by the same CPA firm if pre-approved by the audit committee. The audit partner must rotate off the audit engagement every five years, and the audit firm must undergo quality reviews every one to three years. SOX also increases the penalties for white-collar crimes such as corporate fraud. These penalties include both monetary fines and substantial imprisonment. For example, knowingly destroying or creating documents to “impede, obstruct, or influence” any federal investigation can result in up to 20 years of imprisonment. SOX also contains a “clawback” provision in which previously paid CEO’s and CFO’s incentive-based compensation can be recovered if the financial statements were misstated due to misconduct. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 further strengthens the clawback rules, such that firms must recover all incentive compensation paid to any current or former executive, in the three years preceding the restatement, if that compensation would not have been paid under the restated financial statements. In other words, executives will not be allowed to profit from misstated financial statements, even if the misstatement was not due to misconduct.
In: Accounting
Case Study 2: The Turn Around at Ford Ford has been going through difficult times and recovered more than once. The company’s share of the automobile market continues to shrink, and its cost structure has contributed to financial losses. In 2006, Ford lost $12.6 billion. In 2007, Ford did better, posting losses of only $2.7 billion. At the same time, however, Ford’s market shares dwindled and in 2007, its share was 14.8%—down from 26% in the 1990s. In an effort to match its production with the demand for its products, as well as address concerns with its high labor costs, Ford has focused on trying to get smaller to achieve long-term success in the automobile industry. One of the primary ways for Ford to achieve this goal is to take further steps to reduce the size of its workforce. Ford’s workforce went from 283,000 employees in 2006 to 171,000 in 2013. Ford then announced a new round of buyouts and early-retirement packages to its workers in an effort to cut costs and replace those leaving with lower-paid workers. Some of the offers made to reduce the labor supply in 2013 included: Workers who were eligible for retirement would receive a $50,000 offer, higher than the $35,000 in the previous round of buyouts. Skilled-trade workers, such as maintenance workers, will get an additional $20,000, bringing the total potential payout for such a worker to $70,000. Following the 2013 round of buyouts, Ford extended its tactics to reduce the size of its workforce and ongoing expenses further through means such as the following: Extending a buyout option for its 78,000 employees and special incentives for its 40,800 workers who are eligible for retirement to retire sooner rather than later. Offering a lump sum payment for 90,000 retired engineers and office workers to forgo their regular monthly pension check for the rest of their lives. The automaker’s goal in offering the company-wide buyouts was to cut jobs, reduce its ongoing pension expenses, to position itself to be more competitive in the market, and to align its labor capacity with the demand for its products. In 2018, Ford announced that by 2020 around 90% of Ford’s sales in North America would be trucks, SUVs and commercial vehicles. The only two cars to be manufactured in North America would be the Mustang and the Focus Active Crossover. The company has reallocated $7 billion of its research funds from cars to trucks and SUVs.
Questions
What factors have contributed to the large-scale labor surplus at Ford?
What impact is the most recent strategic plan at Ford likely to have on the company’s labor supply?
Over the years, Ford has decided to pursue employee buyouts and attrition in an attempt to shrink its workforce to match its productivity demands. Why do you think Ford uses these two tactics? Do you think these are the best options for Ford to achieve its goals?
What are the downsides of these two approaches? Are there any other approaches you might recommend addressing its labor surplus?
In: Operations Management