Suppose that the annual market demand for Bleebs is given by Q=3750-75P The average and marginal costs of producing Bleebs are $10/bleeb.

A) If the firm acts as a single-price monopoly, what are the monopoly quantity, price, and profit?

B) Suppose that there are three hundred identical customers in this market. What is the best two-part tariff that the monopolist can use? If the monopolist implements the two-part tariff, how much profit will it make?

C) It turns out that the monopolist was wrong about the makeup of the customers. At any price, 1/3 of the customers buy twice as much as the other two thirds. If the monopolist implements the two-part tariff in part b, how much profit will it make?

Internal Control : Performance Measures

Essex Engineering

Topic: Performance measures,

Essex is an industrial company with three divisions. Both the Midland Division and the North Division are long established. Senior managers are concerned that these divisions have a high percentage of products that are near the end of their product life-cycle. Forecast sales increases over the next 5 years is expected to be in the region of 4-5% per annum.

The East Division was acquired in 1999 and senior managers are optimistic that this division has very good growth potential. Most of the senior managers at this division have experience of working at the other divisions.

Since 1999 the head office has ranked all divisions according to return on investment (ROI) and residual income (RI). All managers believe that the rankings are important for future promotions and career development.

A small number of other performance measures are also used by managers. These include

These performance measures were agreed by all managers in 1999. At the time it was thought that managers should focus on only a small number of measures.

2002

The managers at the divisions provided the following information for the head office.

Selected data from the budgeted Management Accounts to 31 December 2002

Other measures

The head office has estimated that the group cost of capital is 10%

Ranking divisions in 2000

In 2000 the data on controllable and non-controllable costs and investments will be used to rank divisions.

Questions

Question 1

Based on the data provided comment on the relative financial performance of the two divisions and discuss how the ranking of the divisions changes if controllable and non-controllable costs and capital employed are analysed. (provide the calculation to prove your standpoint)

Question 2

Evaluate the choice of performance measures for the 3 divisions

Question 3

Identify and evaluate the difficulties faced by managers when measuring capital employed for a division.

Question 4

Discuss how using ROI can result in managers making poor investment decisions.

ROI has some built in biases that can lead managers to make poor decisions. First, ROI requires that all costs and benefits be stated in dollars. Because it is usually easier to quantify costs than benefits, ROI measurements can be biased in a way that gives undue weight to costs. Second, ROI focuses on benefits that can be predicted. It also tends to emphasize short run benefits over long run benefits. This biases ROI calculations to weigh short term costs and benefits more heavily than long term costs and benefits.

Question 5

Discuss the particular problems multinational companies have when evaluating the performance of divisions.   

QUESTION #4 /8 (2 marks each) Answer the following questions regarding Exchange-Traded Funds (ETFs), in your own words:

a. How are ETFs typically structured?

b. Please describe how an in-kind exchange works?

c. What are the risks related to the composition of an ETF?

d. Why is “securities lending” a risk for ETFs?

Your local hotel has a dining room which has the capacity to seat 140 guests. It is opened for breakfast and lunch seven days a week and fully expects to be at capacity at these times. During January 2021, management has forecast the seat turnover for breakfast will be 3 times and for lunch 2 times, with the average bill to be $28 for breakfast and $58 for lunch. Beverage revenue is usually 12 per cent of the breakfast revenue and 28 per cent of the lunch revenue.  

Calculate budgeted total revenue of food and beverage for the 31 days of January 2021. Express the answer as a daily food and beverage outcome and also a monthly figure.

You have now decided to collapse your data into on-campus and off-campus living (use data from #7) 2x2 table. Determine if there is a difference between living on-campus or off-campus and exercise status (yes exercise, no exercise).

1. state the null and alternative hypothesis

2. determine a

3. select chi square tool

4. Fine the critical value

5. reject or fail to reject

6. State the conclusion

2 large retail companies (W and T) are compared on a Census variable, percent of people who own their home within 3 square miles of the store. The percent that own their home for W is:

84, 79, 73, 81, 74, 77, 64, 78, 78, 78, 61

Percent for T is:

58, 61, 57, 62, 61, 59, 56, 64, 61, 70.

- Estimate the difference in percent owning their home for the two companies as to central tendency using lambda=.05. In estimating the difference, use 1 parametric approach, 1 robust(trimming) or nonparametric approach, and the best bootstrapping approach(not jackknife). Make a case for which approach is best.

On January​ 1, 2013, an investor bought 300 shares of​ Gottahavit, Inc., for $69 per share. On January​ 3, 2014, the investor sold the stock for ​$74 per share. The stock paid a quarterly dividend of $0.24 per share. How much​(in $) did the investor earn on this investment​ and, assuming the investor is in the 33​% tax​ bracket, how much will she pay in income taxes on this​ transaction? Assume a preferential tax rate of​ 15% on dividends and capital gains.

A)The amount​ (before taxes) the investor earned on this investment is ​$______ ​(Round to the nearest​ dollar.)

B)Assuming a preferential tax rate of​ 15%, the amount she will pay in income taxes on this transaction is ​$_____.​(Round to the nearest​ cent.)

The data below are the final exam scores of 10 randomly selected calculus students and the number of hours they slept the night before the exam:

Using the equation of the regression line, with all numbers in it rounded to 2 decimal places, predict the final exam score of a student who slept for 3 hours the night before the exam. (Round the score to 2 decimal places)

Select one:

49.83

45.64

55.97

50.22

59.58

61.01

A study was conducted to determine whether the final grade of a student in an introductory psychology course is linearly related to his or her performance on the verbal ability test administered before college entrance. The verbal scores and final grades for 10 students are shown in the table below.

Find the following:

The least squares line: ŷ =

Calculate the residual for the second student:

Data was collected from students to determine the effects on overall grade average and number of hours spent playing video games per week.

Grade   Hours/Week
20 23
96 3
74 6
85 5
67 8
56 14
79 4
65 7
Which is the:
-Independent variable?   _______________________
-Dependent variable?   _______________________

-Calculate the coefficient of correlation and interpret the results.

-Determine both the coefficient of determination and non-determination and explain the result.

-Determine the unrounded regression equation for this data set.

-Using the regression equation predict the grade average when 15 hours are played per week. Show all work involved in finding your answer.