In what follows use any of the following tests/procedures: Regression, multiple regression, confidence intervals, one sided T-test or two sided T-test. All the procedures should be done with 5% P-value or 95% confidence interval.Some answers are approximated, choose the most appropriate answer. SETUP: Is it reasonable to claim that cars with higher city MPG have also higher Highway MPG? Given the data your job is to help answer this question.

I. What test/procedure did you perform? (6.66 points)

• a. One sided T-test
• b. Two sided T-test
• c. Regression
• d. Confidence interval

II. Statistical interpretation? (6.66 points)

• a. Since P-value is small we are confident that the slope is not zero.
• b. Since P-value is small we are confident that the averages are different.
• c. Since P-value is too large the test is inconclusive.
• d. None of these.

III. Conclusion? (6.66 points)

• a. Yes, we confirm that this was a reasonable claim.
• b. No, we cannot confirm that this was a reasonable claim.

2. DesMoines Valley Company has two divisions, Computer Services and Consultancy Services. In addition to their external customers, each division performs work for the other division. The external fees earned by each division in 20X5 were $200,000 for Computer Services and $350,000 for Consultancy Services. Computer Services worked 3,000 hours for Consultancy Services, who, in turn, Consultancy Services worked 1,200 hours for Computer Services. The total costs of external services performed by Computer Services were $110,000 and $240,000 by Consultancy Services.

Required:

a.   Determine the operating income for each division and for the company as a whole if the transfer price from Computer Services to Consultancy Services is $15 per hour and the transfer price from Consultancy Services to Computer Services is $12.50 per hour.

b.   Determine the operating income for each division and for the company as a whole if the transfer price between divisions is $17 per hour.

c.   What are the operating income results for each division and for the company as a whole if the two divisions net the hours worked for each other and charge $12.50 per hour for the one with the excess? Which division manager prefers this arrangement?

3. Dow Company manufactures tables in U.S. The standard (budgeted) cost of one unit is shown below:

Here is the following information on the Cheesecake Factory, I am trying to answer question 1 below. Can you please help me out? Excel assignment.

• Current Dividend (Source – Yahoo!Finance) $1.28
• Required Return (Estimated) 8.9%
• Current EPS (Source – Yahoo!Finance) $2.14
• Current Book Value Per Share (Source – Yahoo!Finance) $13.24
• Current EBITDA per share (Source – Yahoo!Finance) $5.25
• Current Debt per share è $2.80 Current Cash and Equivalents per share $0.61
• Initial Growth Rate for H-Model (Estimated) 9%
• Terminal Growth Rate for H-Model (Estimated) 3%
• Time to Reach Terminal Growth Rate for H-Model (Estimated) 10 years
• Forecasted Growth Rates (Estimated)
  • Year 1 6%
  • Year 2 9%
  • Year 3 12%
  • Year 4 6%
  • Year 5 4%
  • Years 6 through infinity 3%
• Historical PE, PB and EV/EBITDA (Source – Morningstar and Gurufocus.com)
  • 5-Year Average 19.8 4.1 9.3        
• Comparative PE, PB, and EV/EBITDA for S&P 500 (Source – Morningstar and estimate)
  • 19.2 (5-year avg = 19.6)     3.7 (5-year avg = 2.9)     13.0 (5-year average 12.3)

1. Calculate the price for Cheesecake Factory using the
   1. H-Model
   2. Non-Constant Dividend Valuation Approach
   3. Relative valuation
2. 1. Historical PE, PB, and EV/EBITDA
   2. Comparative PE, PB, and EV/EBITDA (Adjust S&P 500 to reflect Cheesecake Factory’s average discount or premium to the market over the past 5 years. Example, if the S&P 500 had an average PE over the past 5 years of 17.0 and your company had an average PE of 14, then your company has historically traded at 82.35% of the market average PE. Therefore, if the current S&P 500 PE is 17.7, your company should have a PE of 14.58 based on the comparative relative valuation to PE. Take the 14.58 times your firm’s EPS to get fair value using this method.)

Managing Service, Information and Control

Please Read, Review, Analyze, Manage, and Solve. Answer questions and give thorough solutions and solid plans for everything below.

Going Lean at Starbucks

It started off as a day basically like any other. You went into the Starbucks that you manage, helped the employees open the store, and thought about making a dent in the mountain of paperwork left over from the previous week. But then, you got an unexpected visit from a team at the corporate office. They started talking about the need to lower labor costs, improve efficiency, and increase productivity. When you asked them how they planned on doing all that, their response was “lean production.”

They informed you that lean production is a management philosophy derived from Toyota that is focused on reducing waste. Whether it’s wasted motion, wasted time, or wasted parts, the goal of lean production is to eliminate waste so that all the members of an organization can do their work efficiently. The executives then show you all the “waste” that’s in your stores right now—baristas bending over to scoop coffee from a counter below, others waiting for coffee to fully drain before starting a new pot, one worker carrying trays of pastries from storage to the display case, another spending ten seconds per drink to read the milk label. They even show you a map showing the winding trail that a barista takes in making a single drink. It looks like a big pile of spaghetti, you think to yourself.

With lean production, the executives explain, you can reduce the amount of motion that employees spend making drinks, and the amount of time they spend reaching for stuff, reading labels, or moving from here to there. This will make your store more efficient and productive, so that the same number of employees can serve more customers.

You’re intrigued by all of this, as nothing would please your supervisors more than increased revenue and lower costs. But you’re also worried about how your employees will react. Many of them came to work at Starbucks because it wasn’t like other fast-food chains that only focus on speed, speed, and speed. How will they feel once you tell them that they’ll have to change the way they work to become faster? What if they feel like you just want them to be coffee-making robots, leaving them no time to interact with customers or experiment with new drinks? Consider these issues with the questions below.

1. How would an increase in efficiency and production benefit your employees?
2. How would you address employees’ concerns that they are being transformed into coffee-making robots?

The Problem with Cups

Starbucks has always strived to take leadership in environmental issues, whether it was by encouraging customers to compost used coffee grounds or offering free coffee drinks to customers who brought in their own reusable mugs. But the company faces a major problem that has few solutions—cups. Across all of its stores, Starbucks uses more than 3 billion paper cups every year, most of which end up in the trash. Though the company would love to recycle these cups, it can’t, since most processors don’t have a process for recycling paper cups that are lined with plastic, as the Starbucks cups are. The plastic lining also prevents the cups from being composted.

3. How can Starbucks maintain its commitment to reducing waste as it keeps sending paper cups to landfills?
4.   What steps do you think Starbucks could take to reduce the number of paper cups it uses?
5.   Describe the strategies managers can use for waste prevention and reduction.

ABCD currently has one outside drive-up teller. It takes the teller an average of four minutes (exponentially distributed) to serve a bank customer. Customers arrive at the drive-up window at the rate of 12 per hour (poisson distributed). The bank operations officer is currently analyzing the possibility of adding a second drive-up window at an annual cost of $20,000. It is assumed that arriving cars would be equally divided between both windows. The operations officer estimates that each minute’s reduction in customer waiting time would increase the bank’s revenue by $2,000 annually.

1. Is it cost effective to install a second drive-up window? (Show calculations to support your answer.)
2. What other factors should be considered in the decision besides cost?

Advertisers contract with Internet service providers and search engines to place ads on websites. They pay a fee based on the number of potential customers who click on their ad. Unfortunately, click fraud—the practice of someone clicking on an ad solely for the purpose of driving up advertising revenue—has become a problem. According to BusinessWeek 43% of advertisers claim they have been a victim of click fraud. Suppose a simple random sample of 300 advertisers will be taken to learn more about how they are affected by this practice. Use z-table.

a. What is the probability that the sample proportion will be within +- 0.03 of the population proportion experiencing click fraud?

(to 4 decimals)

b. What is the probability that the sample proportion will be greater than 0.49?

(to 4 decimals)

Sales Tax

Far and Wide Broadband provides Internet connection services to customers living in remote areas. During February 2020, it billed a customer a total of $295,000 before taxes. Weston also must pay the following taxes on these charges:

1. State of Kansas sales tax of 6%
2. Federal excise tax of 0.2%
3. State of Kansas excise tax of 0.4%

Required:

Assuming Far and Wide collects these taxes from the customer, what journal entry would Far and Wide make when the customer pays their bill? If an amount box does not require an entry, leave it blank.

Case study

Chicago-based Groupon was launched in 2008 by Andrew Mason with the idea to email subscribers daily deals of heavily discounted coupons for local restaurants, theatres, spas, etc. Via the emails or by visiting the Groupon website customers purchase these substantially discounted deals in the form of electronic coupons which can be redeemed at the local merchant. Groupon brings exposure and more customers to the merchants and charges them commissions for the same. The venture rapidly grew into a daily deal giant and became the fastest-growing internet business ever to reach a $1bn valuation milestone and, thus, became a 'unicorn' (name for start-ups with valuations over $1bn). In 2010 Groupon rejected a $6bn (€4.5bn) takeover bid by Google and instead went public at $10bn in 2011.

While Groupon's daily deals were valued by customers - the company quickly spread to over 40 countries - they also attracted thousands of copycats worldwide. Investors questioned Groupon's business and to what extent it had rare and inimitable resources and capabilities. CEO Andrew Mason denied in the Wall Street Journal (WSJ) that the model was too easy to replicate:

'There's proof. There are over 2000 direct clones of the Groupon business model. However, there's an equal amount of proof that the barriers to success are enormous. In spite of all those competitors, only a handful is remotely relevant.

This, however, did not calm investors and Groupon shares fell by 80 per cent at its all-time low in 2012. One rare asset Groupon had was its customer base of more than 50 million customers, which could possibly be difficult to imitate. The more customers, the better deals and this would make customers come to Groupon rather than the competitors and the cost for competitors to acquire customers would go up. Further defending Groupon's competitiveness, the CEO emphasised in WS) that it is not as simple as providing daily deals, but that a whole series of things have to work together, and competitors would have to replicate everything in its operational complexity":

'People overlook the operational complexity. We have 10,000 employees across 46 countries. We have thousands of salespeople talking to tens of thousands of merchants every single day. It's not an easy thing to build.

Mason also emphasised Groupon's advanced technology platform that allowed the company to 'provide better targeting to customers and give them deals that are more relevant to them'. Part of this platform, however, was built via acquisitions - a route competitors possibly also could take.

If imitation is the highest form of flattery Groupon has been highly complimented, but investors have not been flattered. Consequently, Andrew Mason was forced out in 2013, succeeded by the chairman Eric Lefkofsky. Even though Amazon and other copycats left the daily-deals business he struggled to explain how Groupon would fight off imitators. The company was forced to exit over 30 international markets. Lefkofsky later returned to his chairman role and was followed by Rich Williams in 2015. He managed to turn Groupon profitable for the first time ever in 2017, but still did not regain investors' confidence with the share price still below $4, far from the $20 IPO price. Williams, however, was optimistic:

'[Groupon) is one of the first unicorns. It got a lot of praise and attention it didn't deserve at the beginning. We've not recovered from that. Over time, the numbers will speak for themselves.'

NOTE " ANSWER IN SRTATEGIC MANAGEMENT WAY "

1. If you were the new Groupon CEO what resources and capabilities would you build on to give the company a sustainable competitive advantage?