imagine you are the CEO of Salomon Brothers, where serious and terrible ethical breaches harmed their stakeholders, especially their employees. discuss what specific concrete steps you would take to restore your company’s reputation if it’s been sullied (dirtied)? why are these steps important?

Following is "Salomon Brothers" case

Salomon Brothers Before its implosion in 1990, Salomon Brothers was one of the premier global investment banks—perhaps the most direct competitor of the mighty Goldman Sachs. In December 1990, however, the head of Salomon’s government bond trading desk, Paul Mozer, decided to test the regulatory resolve of the U.S. Treasury. Annoyed by the federal limits on the percentage of Treasury bonds any one firm could bid for in Treasury auctions—the ceiling was 35 percent—Mozer devised a plan to evade the regulation. He submitted a bid for Salomon Brothers, and he submitted an unauthorized bid in the name of one of his customers. The two bids combined represented 46 percent of the auction—a clear violation of the rules. Mozer repeated this several times and in April 1991, he described the tactic to four Salomon executives: Chairman John Gutfreund, President Thomas W. Strauss, Vice Chairman John W. Meriwether, and General Counsel Donald M. Feuerstein. These executives told Mozer to stop his scheme but did not report him to the Securities and Exchange Commission. In June, the SEC subpoenaed Salomon for its auction records. In August, Salomon finally alerted the SEC to Mozer’s activities. Immediately following the disclosure to the SEC, Mozer was suspended from his job; shortly afterward, the board of directors asked the four Salomon executives to resign from the firm and fired Salomon’s outside law firm. The board named one of its own members, Warren Buffett, as interim chairman.61 The publicity generated by the Salomon scandal was devastating to the firm and its shareholders. Its market value dropped by over one‐third—$1.5 billion—in the week following the disclosure. Its debt was downgraded by various rating agencies, and major banks reevaluated Salomon’s loan terms. Because of the firm’s decreased liquidity, its ability to trade was dramatically reduced. In addition to the immediate financial debacle, teams of Salomon Brothers personnel left the firm. Weakened by the bad press and the defections of talent, Salomon Brothers managed to remain independent until 1998, when it was acquired by the Travelers Group and eventually it became part of Citigroup. This is just one more example of how personal hubris (on the part of Mozer) and refusal to report such hubris to the regulators (on the part of the firm’s executive team) can result in a death sentence, especially in the financial industry where reputation is everything.

SQL ONLY. WRITE CLEAR AND SIMPLE ANSWERS.

Consider the following relations (PRIMARY KEYS ARE WRITTEN IN BOLD) departments (dept_no, dept_name) dept_emp (emp_no, dept_no, from_date, to_date) dept_manager (dept_no, emp_no, from_date, to_date) employees (emp_no, birth_date, first_name, last_name, gender, hire_date) salaries (emp_no, salary, from_date, to_date) titles(emp_no, title, from_date, to_date) Write the following queries in SQL. No duplicates should be printed in any of the answers. List all the titles for which there is at least one employee having the title. Find the current employee(s) (only id) who has/have the most (highest) experience working in a department [across all departments]. Here, we are referring to working only in one department. For example, let's assume there are only two employees: A and B. Now, A has been working in department X for 15 years and B worked in department X for 10 years and is working in department Y for 8 years. Although B has worked for a total of 18 years, he worked for 10 years in one department. So, for this query the output should be the id of A because A has worked for 15 years in one department which is the highest. Find the names (both first and last) and current salary of all employees who were hired after 31st December 1998. (Hint: The to_date for current salary is '9999-01-01') Find the id and name (both first and last) of all employees who are currently not in the 'Development' department and whose first name start with 'Tom'. Find the names (both first and last) and current salaries of all employees who earn more than the current average salary of all employees. List them in the descending order based on their salary (highest salary first). Some employees have worked in multiple departments. Find the names (both first and last) and the number of departments of all the female employees who have worked in more than one department. Write SQL query to find out the name and current average salary of the department that has the maximum current average salary? Find the employee id of the current managers who currently manages more than 16000 employees. Find the name and current average salary of the departments whose current average salary is more than the current average salary of 'Development' department. Find the name of the employees who currently have the same salary but currently works in different department.

SQL ONLY. WRITE CLEAR AND SIMPLE ANSWERS. READ THE QUESTIONS CAREFULLY. IF AN ANSWER IS WRONG, I WILL DOWNVOTE.

ID      Year    CornYield       SoyBeanYield
1       1957    48.3    23.2
2       1958    52.8    24.2
3       1959    53.1    23.5
4       1960    54.7    23.5
5       1961    62.4    25.1
6       1962    64.7    24.2
7       1963    67.9    24.4
8       1964    62.9    22.8
9       1965    74.1    24.5
10      1966    73.1    25.4
11      1967    80.1    24.5
12      1968    79.5    26.7
13      1969    85.9    27.4
14      1970    72.4    26.7
15      1971    88.1    27.5
16      1972    97      27.8
17      1973    91.3    27.8
18      1974    71.9    23.7
19      1975    86.4    28.9
20      1976    88      26.1
21      1977    90.8    30.6
22      1978    101     29.4

23      1979    109.5   32.1
24      1980    91      26.5
25      1981    108.9   30.1
26      1982    113.2   31.5

27      1983    81.1    26.2
28      1984    106.7   28.1
29      1985    118     34.1
30      1986    119.4   33.3
31      1987    119.8   33.9
32      1988    84.6    27.0
33      1989    116.3   32.3
34      1990    118.5   34.1
35      1991    108.6   34.2
36      1992    131.5   37.6
37      1993    100.7   32.6
38      1994    138.6   41.4
39      1995    113.5   35.3
40      1996    127.1   37.6
41      1997    126.7   38.9
42      1998    134.4   38.9
43      1999    133.8   36.6
44      2000    136.9   38.1
45      2001    138.2   39.6
46      2002    129.3   38.0
47      2003    142.2   33.9
48      2004    160.3   42.2
49      2005    147.9   43.1
50      2006    149.1   42.9
51      2007    150.7   41.7

Use both predictors. From the previous two exercises, we conclude that year and soybean may be useful together in a model for predicting corn yield. Run this multiple regression.

a)       Explain the results of the ANOVA F test. Give the null and alternate hypothesis, test statistic with degrees of freedom, and p-value. What do you conclude?

b)      What percent of the variation in corn yield in explained by these two variables? Compare it with the percent explained in the previous simple linear regression models.

c)       State the regression model. Why do the coefficients for year and soybean differ from those in the previous exercises?

d)      Summarize the significance test results for the regression coefficients for year and soybean yield.

e)      Give a 95% confidence interval for each of these coefficients.

f)        Plot the residual versus year and soybean yield. What do you conclude?

This question requires the use of the Excel file ‘Assignment 3 Data’ found on ACORN. In the file, you will find the annual returns for Enbridge Inc. (ENB) and the S&P/TSX Composite Index (which we will use for the market portfolio). All parts of this question are to be done in Excel with your results printed and submitted with the other questions in this assignment.

1. Use the data for each of ENB and the S&P/TSX Composite Index to find the historical 95% confidence interval of each. [10 points]

2. Plot the returns of the market against the returns of ENB. Add a trendline to the graph and determine the beta of the stock from your trendline. [5 points]

3. Determine the variance and average annual return of the market portfolio. [3 points]

4. Determine the correlation coefficient between the market portfolio and ENB. [3 points]

5. What is the calculated beta for ENB using the information derived from parts a, c, and d? How does this compare with your answer to part b? [2 points]

6. The current Government of Canada Benchmark 10 Year Bond Yield (which will be our risk-free rate) is 1.61%. What is the required return on ENB stock according to the CAPM? [2 points]

Exercise 1.8

1. Your long distance phone service has a base monthly charge and a per-minute charge. When you used 350 minutes in a month the total cost was $32.50. When you used 400 minutes in a month the total cost was $36.50. You want an equation that will allow you to calculate your phone bill.

Please provide:

a. the definition of x, including the units

b. the definition of y, including the units

c. the equation in the form y = mx + b

d. the units of the slope

e. the units of b and an interpretation of b.

f. How much will your phone bill be if you talked for 711 minutes?

2. The dosage for a medicine is linear with the weight of the patient. There is a minimum dosage onto which is added a per pound dosage. You find that your dosage, at 110 pounds is 48 milliliters (ml). Your brother’s dosage, at 170 pounds, is 66 ml. You would like an equation that will relate the dosage to the weight of the patient. Please provide:

a. the definition of x, including the units

b. the definition of y, including the units

c. the equation in the form y = mx + b

d. the units of the slope

e. the units of b and an interpretation of b.

f. what is the dosage for a 165 lb patient?

For each of the problems,6 –10, cost information at a certain level of production for a manufacturing process is given. The revenue per unit is also given. Assume a linear relationship between the number of units produced and cost. For each problem please find:a. The cost,revenue and profit functions and the units of the slope and of b.b. The variable cost per unit, also known as the marginal cost, and the fixed cost. c. The cost, revenue and profit when z units are produced. (z will be specified in each problem)d. The break-even point.e. The average cost per unit of producing w units and the equation of the average cost per unit function. (w will be specified in each problem)

6. The cost of producing 1,250 units is $45,000. The cost of producing 1,500 units is $50,000. Each unit produced can be sold for $30. z = 3,000; w = 2,500.
7. The cost of producing 23,000 units is $225,000. The cost of producing 30,000 units is $260,000. Each unit produced can be sold for $12. z = 45,000; w = 68,000.

The manufacturing firm Rebo is considering a new capital investment project. The project will last for five years. The anticipated sales revenue from the project is $3 million in year 1 and $4.2 million in each of years 2 – 5. The cost of materials and labour is 50% of sales revenue and other expenses are $1 million in each year. The project will require working capital investment equal to 20% of the expected sales revenue for each year. This investment must be in place at the start of each year. Working capital will be recovered at the end of the project’s life.

The project will require $2.5 million to be spent now on new machinery which will have zero value at the end of the project and will be depreciated each year at 20% of the original cost. The tax rate is 25%. Rebo uses a discount rate of 11% to evaluate its capital investment projects.

(i) What is the net income in each year?

(ii) What is the free cash flow in each year and the net present value (NPV)?

(iii)You discover the following additional information:

• The project will utilise a building that the firm leases. No other activities take place in it. If this project does not go ahead the firm will terminate the lease in one year’s time if no other use for it has been found.

• Part of each year’s cash flows from the project will be used to increase the dividend payment to shareholders.

For each of these items, explain briefly whether or not you would incorporate the information into your analysis of the project’s value.

(b)

Zuti has a capital investment project that could start immediately. The project will require a machine costing $2.4 million. The total discounted value now of the cash inflows from the project will be either $2.6 million or $1.9 million with equal probability. The risk-free rate is 3%.

Instead of starting immediately the project could be delayed until one year from now to gain more market information. Its total discounted cash inflows at that time will be known as either $2.6 million, or $1.9 million, with certainty.

(i) What is the present value of the option to delay?

(ii) The supplier of the machine has offered to deliver it (if required) in one year’s time at a price of only $2 million, if Zuti pays a non-refundable deposit now. What is the maximum the firm should pay as a deposit now? What type of real option does this represent for Zuti? Identify the specific components of the option contract.

Section 1: Using marginal analysis to determine the profit maximizing price and quantity of resources in a factor market under perfect

Orange Inc. sells cell phones in a perfectly competitive market in the short-run. Capital and labor are two resource factors used to produce the cell phones. Capital is fixed in the short-run but labor can vary. The market for hiring labor is a perfectly competitive market.

Labor is measured in worker weeks. Each worker week costs $700 of wages and Orange Inc. can hire any number of worker weeks. Each cell phone is sold at a price of $300 and can sell any number of phones that are produced. Information is given below on various amounts of labor and output.

Table 1:

Step 1

Using the information preceding Table 1 and the table, create a separate table that includes the following for each quantity of labor value: marginal product of labor, total revenue, marginal revenue, marginal revenue product of labor, total variable cost, marginal cost, total resource cost, and marginal resource cost.

The table can be computer-generated or created by hand. Be sure to appropriately label the table so the various calculated values can be identified. Round off to two decimal places for the dollar values.

Step 2

Using the table you created in Step 1, create a graph that illustrates the profit maximizing level of output price and output quantity for the company using marginal analysis.

The graph can be computer-generated or created by hand. Indicate the profit maximizing output quantity and output price in this graph.

Step 3

Using the table you created in Step 2, create a graph that illustrates the profit maximizing level of input price and input quantity for the company using marginal analysis.

The graph can be computer-generated or created by hand. Indicate the profit maximizing input quantity and input price in this graph.

Step 4

In a short paragraph (100 to 200 words), indicate the profit for Orange Inc. (assuming the company maximizes profit) using the information you calculated in the table for Step 1. In addition, explain how the optimal input and optimal output decisions for Orange Inc. are equivalent

(a) The manufacturing firm Rebo is considering a new capital investment project. The project will last for five years. The anticipated sales revenue from the project is $3 million in year 1 and $4.2 million in each of years 2 – 5. The cost of materials and labour is 50% of sales revenue and other expenses are $1 million in each year. The project will require working capital investment equal to 20% of the expected sales revenue for each year. This investment must be in place at the start of each year. Working capital will be recovered at the end of the project’s life. The project will require $2.5 million to be spent now on new machinery which will have zero value at the end of the project and will be depreciated each year at 20% of the original cost. The tax rate is 25%. Rebo uses a discount rate of 11% to evaluate its capital investment projects.

(i) What is the net income in each year?

(ii) What is the free cash flow in each year and the net present value (NPV)?

(iii)You discover the following additional information: • The project will utilise a building that the firm leases. No other activities take place in it. If this project does not go ahead the firm will terminate the lease in one year’s time if no other use for it has been found. • Part of each year’s cash flows from the project will be used to increase the dividend payment to shareholders. For each of these items, explain briefly whether or not you would incorporate the information into your analysis of the project’s value.

(b) Zuti has a capital investment project that could start immediately. The project will require a machine costing $2.4 million. The total discounted value now of the cash inflows from the project will be either $2.6 million or $1.9 million with equal probability. The risk-free rate is 3%. Instead of starting immediately the project could be delayed until one year from now to gain more market information. Its total discounted cash inflows at that time will be known as either $2.6 million, or $1.9 million, with certainty.

(i) What is the present value of the option to delay?

(ii) The supplier of the machine has offered to deliver it (if required) in one year’s time at a price of only $2 million, if Zuti pays a non-refundable deposit now. What is the maximum the firm should pay as a deposit now? What type of real option does this represent for Zuti? Identify the specific components of the option contract.

Below is an Unadjusted Trial Balance of Jasa Tading Bhd at 31 December 2019.

Additional information:

1. An unpaid salaries and wages as at 31 December 2019 is RM18,000.
2. A tenant of an office space has not yet pay a rental for December 2019 amounting RM3,000.
3. The company returned defect merchandise bought from supplier and was refunded RM3,500 in cash. The company use perpetual inventory system and this transaction has not yet been recorded.
4. The company received RM35,000 in cash from a customer on 30 December 2019 and recorded as sales revenue. However the company only managed to supply the merchandise on 3 January 2020.
5. Payment for a one-year insurance coverage was made on 1 July 2019.
6. Annual depreciation for building and equipment are based on straight line depreciation basis over a period of 50 years and 10 years respectively with no scrap value.
7. 30% of the notes payable is due next year. The note payable interest rate is 8% per annum.

REQUIRED:

1. Journalise the adjusting entries on 31 December 2019.

2. Prepare a Statement of Profit or Loss and Other Comprehensive Income for Jasa Tading Bhd for the year ended 31 December 2019 according to MFRS 101 Presentation of Financial Statement.

3. Prepare a Statement of Financial Position for Jasa Tading Bhd as at 31 December 2019 according to MFRS 101 Presentation of Financial Statement.

       (Note: Round-up your answer to the nearest RM)