Motorola Mobility LLC is a company that develops mobile devices. Headquartered in Chicago, Illinois, United States, the company was formed on January 4, 2011 by the split of Motorola Inc. into two separate companies; Motorola Mobility took on the company's consumer-oriented product lines, including its mobile phone business and its cable modems and set-top boxes for digital cable and satellite television services, while Motorola Solutions retained the company's enterprise-oriented product lines. Early 2012, Google decided to purchase Motorola mobility LLC for $12.5b. Google had a plan to keep Motorola mobility for 5 years. Google financial analysis team made the following forecasts:

And that the average book value of asset is $8b and Google’s required rate of return is its WACC.

7- Calculate net present value (NPV) for the above investment decision. Would you accept or reject this investment decision? Why? (NOTE: RATE is 12.05%)

8- Calculate payback period. If you know that google accepts projects with 4 years payback period. Would you accept that project?

9- Calculate the Motorola project internal rate of return (IRR). Would you accept or reject this project? Why?

The record of international trade in goods and services and international transfer payments is called

Select one:
a. the exchange rate account
b. the foreign account
c. the balance of payments
d. the current account
e. the capital account

Under a flexible exchange rate system, expansionary fiscal policy

Select one:
a. has no effect on the trade balance
b. is very effective because crowding out cannot occur
c. cannot change the level of consumption
d. always has to be supplemented by restrictive monetary policy
e. will cause a deterioration of the trade balance

A depreciation of a currency occurs when:

Select one:
a. Inflation falls
b. The value of the currency increases
c. The overall balance of payments improves
d. The value of the currency falls
e. The balance of payments improves

Which of the following items are deficit items in the balance of payments for the United States?

Select one:
a. a French and a German citizen make a deposit in a U.S. bank
b. a French citizen buys a U.S. Securities
c. a U.S. citizen buys a vacation home in Mexico
d. a German citizen makes a deposit in a U.S. bank
e. a German citizen buys a U.S. Treasury bill

In a model with flexible exchange rates and capital mobility, expansionary fiscal policy is likely to cause

Select one:
a. a reduction in net exports
b. a decrease in imports
c. an increase in the current account surplus
d. an outflow of funds
e. a currency depreciation

11.

The answer to the question, “Where did modern humans come from?” __________.

12.

Which of the following would provide evidence supporting the multiregional model?

13.

Which of the following are early human remains found in the United States?

14.

Which of the following characteristics is a good indicator that the remains being examined are modern and not archaic Homo sapiens?

15.

Which of the following describes technical intelligence?

Argosy Gaming

Argosy Gaming Company is the owner and operator of six riverboat gambling casinos and hotels in the United States. Argosy has developed a centralized enterprise data warehouse to capture the data generated at each property. As part of this effort, Argosy selected an extract-transform-load (ETL) tool to gather and integrate the data from six different operational databases to create its data warehouse.

The plan is to use the data to help Argosy management make quicker, well-informed decisions based on patrons’ behaviors, purchases, and preferences. Argosy hopes to pack more entertainment value into each patron’s visit by better understanding their gambling preferences and favorite services. The data will also be used to develop targeted direct mail campaigns, customize offers for specific customer segments, and adapt programs for individual casinos.

Review Questions

1. What are the key components that Argosy must put into place to create an environment for a successful BI and analytics program?
2. What complications can arise from gathering data from six different operational databases covering six riverboat gambling casinos and hotels?

Critical Thinking Questions

1. The Argosy BI and analytics program is aimed at boosting revenue not at reducing costs. Why do you think this is so?
2. What specific actions must Argosy take to have a successful program that will boost revenue and offset some of the increases in costs?

In June 2008, the Journal of the American Academy of Dermatology reported on the use of an intermittent therapy for flare prevention and long-term disease control of eczema (red, inflamed, itchy skin). Eczema is a chronic skin disease that affects about 10% to 20% of infants and about 3% of adults and children in the United States. Researchers wanted to determine whether intermittent dosing with a specific topical inhibitor is effective in preventing eczema flare-ups in patients with stabilized eczema. Initially, 383 adults and children with moderate to severe eczema were treated with daily doses of the topical inhibitor. After 16 weeks, 197 were disease free and admitted into the maintenance phase of the study. These patients were randomized to a 3-times-weekly treatment with either the topical inhibitor or a placebo for 40 weeks. All tubes of ointments (topical inhibitor and placebo) were packaged in identical boxes and labeled “for investigational use only.” Then the packages were sealed with tamper-proof seals and shipped. Neither the researchers nor the patients knew who received the topical inhibitor or who received the placebo. During the maintenance phase researchers tracked the number of flare-free days for each patient.

Which of the following design features contributes to double blinding?
A.Randomization of patients to one of two groups

B. Distinguishing the packaging for both treatments

C. The number of flare-free days for each patient

{Exercise 4.19 (Algorithmic)} The National Sporting Goods Association conducted a survey of persons 7 years of age or older about participation in sports activities (Statistical Abstract of the United States: 2002). The total population in this age group was reported at 248.5 million, with 120.9 million male and 127.6 million female. The number of participants for the top five sports activities appears here. Participants (millions)             Activity                                     Male                                     Female             Bicycle riding                                     20.7                                     22.5             Camping                                     24.1                                     25.8             Exercise walking                                     30.2                                     59.2             Exercising with equipment                                           18.9                                     25.9             Swimming                                     24.9                                     32.9                                     For a randomly selected female, estimate the probability of participation in each of the sports activities (to 2 decimals). Note that the probabilities do not sum to 1 because of participation in more than one sports activity. Bicycle riding Camping Exercise walking Exercising with equipment Swimming For a randomly selected male, estimate the probability of participation in each of the sports activities (to 2 decimals). Note that the probabilities do not sum to 1 because of participation in more than one sports activity. Bicycle riding Camping Exercise walking Exercising with equipment Swimming For a randomly selected person, what is the probability the person participates in exercise walking (to 2 decimals)? Suppose you just happen to see an exercise walker going by. What is the probability the walker is a woman (to 2 decimals)? What is the probability the walker is a man (to 2 decimals)?

Traditionally Foreign Direct Investments (FDI) has followed foreign trade since foreign trade is typically less costly and risky than making a direct investment into foreign markets. Entering a market via FDI allows management to enter the market in small increments controlling their investment. However, the globalization of markets is challenging this traditional market entry strategy.

For example, you have probably noticed that currency risk and fluctuations, such as the weaker dollar, higher euro - and sovereign financial debt and austerity measures in countries and ECB actions have been at the forefront of economic discussions for a number of years. In the midst, some time ago there was discussion in Washington on the Chinese purchase of Smithfield. InBev, the Belgian-Brazilian beer company, led the way in 2008 by acquiring Anheuser-Busch. For America needs businesses from the BRICS (Brazil, Russia, India, China, and South Africa) and businesses from all over the world to take a new look at the U.S. market. Investments by foreign firms are vital to fund growth and expansion of the U.S. companies. The United States generally remains the largest single recipient of foreign direct investment in the world for recent several years.

How is this new international business environment causing the path to market expansion to change. How would you analyze this development and purchase of American companies by businesses from emerging economies?

Determining Market-Based and Negotiated Transfer Prices

Clanahan, Inc., has a number of divisions around the world. Division US (in the United States) purchases a component from Division N (in the Netherlands). The component can be purchased externally for $25.10 each. The freight and insurance on the item amount to $2.50; however, commissions of $2.50 need not be paid.

Required:

Round your answers to the nearest cent.

1. Calculate the transfer price using the comparable uncontrolled price method.
$ per unit

2. Suppose that there is no outside market for the component that Division N transfers to Division US. Further assume that Division US sells the component for $31.20 and normally receives a 30 percent markup on cost of goods sold. Calculate the transfer price using the resale price method.
$ per unit

3. Now assume that there is no external market for the component transferred from Division N to Division US, and that the component is used in the manufacture of another product (i.e., it is not resold). Calculate the transfer price using the cost-plus method. Further assume that Division N’s manufacturing cost for the component is $18.10.
$ per unit

4. What if commissions avoided were $2.75 per unit?

What would be the comparable uncontrolled price?
$ per unit

What affect would this have on the resale price?

What affect would this have on the cost-plus price?

For fiscal year 2019, the U.S. federal deficit was $984 billion and the national debt grew to $22.8 trillion. (You can find real-time numbers for the deficit, debt, and much more at US Debt Clock.) The Congressional Budget Office (CBO) projects federal deficits to exceed $1 trillion each year beginning in 2022 if current laws do not change. In 2019, federal debt held by the public was 78% of GDP, with the CBO projecting that to rise to more than 92% by 2029. In an April 2018 report, the Cato Institute stated that the United States is the only advanced country expected to show an increasing debt-to-GDP ratio through 2023*.

• What is the difference between the federal deficit and the national debt?
• What are the economic consequences of a rising federal deficit and national debt?
• Should we be concerned about the sizes (and projected increases) of the deficit and debt? Why or why not?
• Who exactly do we owe this money to, and does this make a difference in terms of our level of concern?
• What can the government do to reduce the deficit numbers? Be specific, explaining how the numbers would be reduced, and if the government actually should use these methods of deficit reduction.
• How has federal spending changed as a result of COVID-19, and what do you think this will do to the projections of the overall federal deficit and debt?