Chapter Four Assignment

NUTRITION WITHOUT HARMING THE ENVIRONMENT

Not long ago, delicacies such as sushi and kiwis were not widely known by the average person. Today they flourish as accepted food throughout the world. With that in mind, Susan Marring is proposing a new enterprise to solve some of the environmental challenges facing our planet. “Insects for Tomorrow” is the name of her new venture idea. She plans to raise insects under hygienic conditions and sell them to restaurants as delicacies. Surprised? Sickened? Worried? While those could be the usual reactions to such a proposal, Susan is undeterred in her effort.

She has done some research and found that the vast majority of the underdeveloped nations already eat insects. In addition, they are high in protein, B vitamins, and minerals. Insects are plentiful (over a thousand species are edible), easier to raise than livestock or fish, and they produce far less waste. In the Netherlands there are already companies that raise and sell insects to restaurants, but the idea has not caught on in the United States. Says Susan, “think of the incredible benefits to our environment. Insects consume less water, produce less waste, and it is far more humane to raise them for consumption than livestock.” She is convinced that this concept is viable with the potential to be highly profitable. With a feasibility study in hand, Susan is prepared to visit socially conscious investors with the goal of raising $300,000 to get the project started. “This venture is triple bottom line thinking at its best,” says Susan, “I know there will be great acceptance of my idea.”

QUESTIONS

1.      Is this a viable sustainable entrepreneurship concept? Why or why not? Be specific.

2.      How would this venture be viewed in terms of triple bottom line thinking?

3.      What would you recommend to Susan if she came to you for an investment?

A researcher surveyed randomly selected Democrats and Republicans asking them what the number one concern should be for the president of the United States. The results of the survey are shown below. Is there evidence to conclude that there is a difference in what Democrats and Republicans think is the most important?

What can be concluded at the αα = 0.01 significance level?

1. What is the correct statistical test to use?
   • Paired t-test
   • Goodness-of-Fit
   • Independence
   • Homogeneity
2. What are the null and alternative hypotheses?
   H0:H0:
   • Political affiliation and number one concern are dependent.
   • The distribution of concerns for Democrats is the same as it is for Republicans.
   • The distribution of concerns for Democrats is not the same as it is for Republicans.
   • Political affiliation and number one concern are independent.
   
   
   
   H1:H1:
   • Political affiliation and number one concern are dependent.
   • Political affiliation and number one concern are independent.
   • The distribution of concerns for Democrats is not the same as it is for Republicans.
   • The distribution of concerns for Democrats is the same as it is for Republicans.
3. The test-statistic for this data =  (Please show your answer to three decimal places.)
   
4. The p-value for this sample = (Please show your answer to four decimal places.)  
   
5. The p-value is Select an answer less than (or equal to), greater than   
   
6. Based on this, we should
   • accept the null
   • fail to reject the null
   • reject the null
7. Thus, the final conclusion is...
   • There is sufficient evidence to conclude that the distribution of concerns for Democrats is the same as it is for Republicans.
   • There is sufficient evidence to conclude that the distribution of concerns for Democrats is not the same as it is for Republicans
   • There is insufficient evidence to conclude that political affiliation and number one concern are dependent.
   • There is insufficient evidence to conclude that the distribution of concerns for Democrats is not the same as it is for Republicans.
   • There is sufficient evidence to conclude that political affiliation and number one concern are dependent.

Pacific Jewel Airlines is a​ U.S.-based air freight firm with a wholly owned subsidiary in Hong Kong. The​ subsidiary, Jewel Hong​ Kong, has just completed a​ long-term planning report for the parent company in San​ Francisco,

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​, in which it has estimated the following expected earnings and payout rates for the years

2011dash–2014.

The current Hong Kong corporate tax rate on this category of income is

17.517.5​%.

Hong Kong imposes no withholding taxes on dividends remitted to U.S. investors​ (per the Hong

Konglong dash—United

States bilateral tax​ treaty). The U.S. corporate income tax rate is

3939​%.

The parent company wants to repatriate

8585​%

of net income as dividends annually.a. Calculate the net income available for distribution by the Hong Kong subsidiary for the years

2011dash–2014.

b. What is the expected amount of the dividend to be remitted to the U.S. parent each​ year?

c. After estimating the theoretical U.S. tax liability on the expected dividend​ (what is often termed​ gross-up in the​ U.S.), what is the total dividend after​ tax, including all Hong Kong and U.S.​ taxes, expected each​ year?

d. What is the effective tax rate on this​ foreign-sourced income per​ year?

a. Calculate the net income available for distribution by the Hong Kong subsidiary for the years

2011dash–2014

in the following table. ​ (Round to the nearest​ dollar.)

3. A rival music streaming company wishes to make inference for the proportion of individuals in the United States who subscribe to Spotify. They plan to take a survey. Let S1, . . . , Sn be the yet-to-be observed survey responses from n individuals, where the event Si = 1 corresponds to the ith individual subscribing to Spotify and the event Si = 0 corresponds to the ith individual does not subscribe to Spotify (i = 1, . . . , n). Assume that S1, . . . , Sn are i.i.d. Ber(π).

(a) What distribution does the random variable S = Pn i=1 Si have? Compute E(S) and var(S). The formulas should involve π and n.

(b) Suppose that n = 30 and π = 0.2. Run a Monte Carlo simulation with m = 10000 replications to verify the formulas for E(S) and var(S) from the previous question. That is, simulate 10000 i.i.d. copies of S and compare the observed average of these to the true mean, and the observed (sample) variance to the true variance. Comment. 1

(c) Let S¯ = n ⁻¹S = n ⁻¹ Pn i=1 Si . What is the mean and variance of S¯?

(d) Verify your answers to the previous question by a Monte Carlo simulation with m = 10000 replications.

(e) Is S¯ a continuous random variable? Explain.

(f) Run a Monte Carlo simulation to estimate the probability P(S¯− 1/ √ n ≤ π ≤ S¯ + 1/ √ n) when π = 0.2 and n = 10, 20, 80, 160. Hint: For every n considered, do the following m = 10000 times: generate a random variable S˜ with the same distribution as S¯ and record whether |S˜−0.2| ≤ 1/ √ n. The Monte Carlo estimate of the desired probability is the number of times this happened divided by the total number of simulations, m = 10000.

Jake routinely directly holds his own stocks. He updates the stocks in his portfolio every week, trying to pick the stocks that will perform the best over the next week. Jake is managing his assets using ________.

Suppose that you own stock in a company that sells flour. If you wanted to diversify to protect your portfolio against the risk that severe flooding might cause crop failure, leading to a rise in wheat prices and adverse conditions in the flour industry, which stock should you add to your portfolio?

The efficient market hypothesis implies the only way to beat the market consistently is by being a financial genius.

Boats are an asset that consistently tend to lose value over time, meaning they pay a negative interest rate. Why do people continue to invest in boats?

Suppose that you believe there will soon be a boom in the tech sector in the United States, causing the profits of tech companies to soar. Which of the following mutual funds would best let you take advantage of this?

In economics, we learn about production and relationship between input and output through a simple production function with two factors of production, namely, labor and capital. As simple as it is, this equation is very useful for both understanding and studying the dynamics of economic growth. For example, if we assume the production function of the whole economy is Q = f (K, L), where K is the economy’s stock of capital, L is employed labor and Q is the economy’s output,  an increase in either labor or capital or both would lead to the growth of the output. We can also grow the economy by increasing labor productivity; that is the amount of output produced by one unit of labor during one production cycle. Following the 2008 financial crisis, which led to a partial collapse of the US financial system, the US economy, as well as the economies of many other countries, went into a severe recession. Although most of these economies have been recovering, the wages of the middle-class income groups in most industrial countries have not been increasing much. In fact, in the US, for example, from the mid-1980s until very recently wages stagnated, and the wage increases of the past two years have been very modest and hardly kept up with inflation. This has resulted in some level of discontent about the state of the economy in most industrial countries. Some observers attribute this structural changes caused by free trade and globalization and technological automation. As a result in some countries, including the United States, sentiments against free trade and globalization seem to be on the rise. President Trump's trade policies appear to be reflective of such sentiments.

Do you agree that we should restrict trade and adopt protectionist policies and, possibly, discourage the development of automation technologies to protect middle-class jobs? Do you think such policies would lead to higher wages?

agree or not?

Workforces in many nations are changing due to changes in birth and mortality rates, immigration, age distributions, external pressures, and competition. Question: What is the significance of diversity issues on the nation’s growth, and how do they affect the workforce of a nation? In the U.S., how have these changes altered the national workforce? Has the focus on diversity improved or injured the national culture? Is diversity, as a construct in itself, always positive? What other factor (s) may be necessary to make diversity successful?

The significance of diversity in the workplace is the creativity, innovation, and productivity. Having a diverse workforce creates a positive environment where employees feel included. Diversity in the United States brings ideas, processes and other positive attributes that allow the US to flourish and become the greatest country in the world.

Diversity in organizations is an aspect of societal changes and is increased or impeded by individual, organizational, and societal factors. Question: How can organizations manage diversity on a long-term basis? It is important for organizations to have processes and plans in place to recruit diverse employees. There needs to be diversity training for the leaders of the company and activities that allow employees to highlight their culture, like international potlucks. In this week's Ted Talk, what actions does the speaker describe that will decrease stereotypes?

In this week’s Ted Talk, the speaker mentions having a diverse group of friends and getting to know them and their culture. We must learn to appreciate differences in people and embrace cultural differences.

What key takeaways, from this course, will you apply in the workplace?

This class came at a perfect time in my career. As an HR Business Partner and recruiter, it is important for me to bring people in that have diverse backgrounds. In order for a company to succeed long-term, employees need to be creative and innovative and this is easier when the employees have different backgrounds.

Clinical Trial

Between 2004 and 2007, the National Institutes of Health conducted a STEP vaccine clinical trial—Phase IIB "test-ofconcept" study.

The STEP study is the name of a clinical trial to test an experimental human immunodeficiency virus (HIV) vaccine. The STEP study enrolled 3,000 participants at sites in Australia, Brazil, Canada, the Dominican Republic, Haiti, Jamaica, Peru, Puerto Rico, and the United States. The study was designed to test an HIV vaccine, which aimed to stimulate production of immune system T-cells that can kill HIV-infected cells.

Based on its first evaluation of vaccine efficacy, the findings showed there were 24 cases of HIV infection among the 741 volunteers who received at least one dose of the investigational vaccine compared with 21 cases of HIV infection among the 762 volunteers who were vaccinated with the placebo. In volunteers who received at least two vaccinations, there were 19 cases of HIV infection among the 672 volunteers who received the investigational vaccine and 11 instances of HIV infection among the 691 volunteers who received placebo. The study investigators of the vaccine trials have decided to cease immunizations and are contacting study volunteers to inform them of the developments.

Reference:

National Institutes of Health (2007). National Institute of Allergy and Infectious Diseases: Immunizations are discontinued in two HIV vaccine trials. Retrieved from National Institute of Allergy and Infectious Diseases Pages/step_statement.aspx.

Using the South University Online Library or the Internet, research further on the STEP study, the STEP vaccine clinical trials, and their parameters.

Based on your research, understanding, and above information, answer the following questions:

Prior to beginning this study, how would you have described the risks and benefits of the study to participants?

What are the ethical issues surrounding this study at the beginning and when the decision was made to terminate the study?

Currently my nephew owns an old refrigerator (a 2003 Kenmore Coldspot) rated for an average draw of 653kW-hr/yr. According to his DP&L bill, electricity costs him $0.141/kW-hr.

a) How much will it cost to run his old refrigerator every year?  

653*0.141= $92.073

b) If a new refrigerator from Home Depot costs $500 and is rated at 500kW-hr/yr., how much will it cost him to run the new refrigerator?

500*0.141=$70.5

c) How much will he save each year by running the new refrigerator?

$92.073-$70.5=$21.573

d) Supposing the nice garbage man takes away his old refrigerator at no cost, how long will it take my nephew to recover the price of the new fridge from the money saved from the lower electric bills? Do you think it is worth it financially for my nephew to buy the new fridge?

$500/$21.573=23.18 number of years

e) DP&L gets the bulk of its electricity from the coal-fired W.H. Zimmerman power plant (Clermont County, Ohio)—the largest single unit power plant in the United States. It services 500,000 customers at a capacity of 1,300 Megawatts/day. As is well known, coal-fired power plants release greenhouse gases and heavy metals such as Hg (etc.) into the atmosphere. If all 500,000 customers in the DP&L region follow my nephew’s example and buy the same new refrigerator, what will be the total energy reduction each year?

f) What percent of Zimmerman Power Station’s yearly maximum capacity output does this energy reduction represent?

PLEASE JUST ANSWER E AND F. Thank you

Bern Fly Rod Company is a small manufacturer of high quality graphite fly-fishing rods. It sells its products to fly-fishing shops throughout the United States and Canada.

Bern began as a small company with four salespeople, all family members of the owner. Because of the high popularity and recent growth of fly-fishing, Bern now employs a seasonal, nonfamily, sales force of 16. The salespeople travel around the country giving flycasting demonstrations of their new models to fly-fishing shops. When the fishing season ends in October, the temporary salespeople are laid off until the following spring. Once the salesperson takes an order, it is sent directly to the cash disbursement department, where commission is calculated and promptly paid. Sales staff compensation is tied directly to their sales (orders taken) figures. The order is then sent to the billing department, where the sale is recorded, and finally to the shipping department for delivery to the customer. Sales staff are also compensated for travel expenses. Each week they submit a hard-copy spreadsheet of expenses incurred to the cash disbursements clerk. The clerk immediately writes a check to the salesperson for the amount indicated in the spreadsheet.

Bern’s financial statements for the December yearend reflect an unprecedented jump in sales for the month of October (35 percent higher than the same period in the previous year). On the other hand, the statements show a high rate of product returns in the months of November and December, which virtually offset the jump in sales. Furthermore, travel expenses for the

period ending October 31 were disproportionately high compared with previous months.

Required

Analyze Bern’s situation and assess any potential internal control issues and exposures. Discuss some preventive measures this firm may wish to implement.

Identify some problems and issues why this happen.