Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000. The fair value of Float's net assets was $1,850,000, and the book value was $1,500,000. The noncontrolling interest shares of Float Corp. are not actively traded. What is the dollar amount of noncontrolling interest that should appear in a consolidated balance sheet prepared at the date of acquisition?

a.

$350,000.

b.

$300,000.

c.

$400,000.

d.

$370,000.

A small video chain is deciding whether to engage in a new line of delivery business, which implies setting up a page where customers could choose movies based on available in-store inventory and pick a time for delivery. The purpose of this analysis is to obtain an estimate of the net present value of this project, which requires an upfront investment of $800,000. Half of this amount will come from a debt of $750,000 (held in perpetuity). Currently, the firm. is unlevered. Assume that the cost of debt is 6.8%, the corporate tax is 40% and the return required by equity investors in the all-equity firm is 15.8%. The firm is planning to run the new line of delivery only for the next 5 years. The following financial information is available regarding the expected cash flows of the new line of delivery (in $ thousands):

Questions:

1. Calculate the unlevered present value

2. Calculate the present value of the expected interest tax shields

3. Calculate the APV.

4. Why is APV a preferable method to WACC in this situation? How do their assumptions differ?

a) Referring to Case Requirement 3 ai, allocate the contract price of $245,000 to each performance obligation. Explain in your own words and provide citation from ASC 606.

b) For each performance obligation in Case Requirement 3ai, should TSA recognize revenue at a point in time or over time? Explain in your own words and provide citation from ASC 606.

Requirement 3

Assume that TSA, Inc. entered into a contract with client Anon for $230,000 on January 1, Year 1, to transfer a software license and an additional $15,000 for installation of the software. The license entitles Anon to use the software in its current form over an unlimited period and does not include updates. Two years of customer support come free with the license. In recent stand-alone contracts with other customers for the same software, TSA has charged $200,000 for the software license,

$40,000 for two-year customer support, and $20,000 for installation. The software is usable without customer support from TSA and it can be installed by other vendors. The installation is expected to take 250 hours, of which 150 hours will be required in Year 1 and the remainder in Year 2. The entire fee of $245,000 is collected on the contract date. Base your answers on the current ASC 606.

1. Determine the number of performance obligations, and the contract price to be allocated to each, in the following situations:
   1. Problem 3ai: The installation service does not modify the software.

Discussion Post Chapter 11: Pricing Strategy

Instructions

Write a post for the Discussion Forum on this topic, addressing the questions below. You may use either a written paragraph or bullet-point format. Part 1 should be 2–3 paragraphs in length or an equivalent amount of content in bullet-point form. Responses to your classmates’ posts should be 1–2 paragraphs or several bullet points in length.

Part 1: Pricing Strategy

Briefly describe pricing for your product or service. How does this compare to competitors, assuming competitors are at or near break-even point with their pricing? Analyze pricing alternatives and make recommendations about pricing going forward based on the following:

• How sensitive are your customers to changes in price?
• What revenue do you need to break even and achieve profitability?

• What does the price say about your product in terms of value, quality, prestige, etc.?

Part 2: Respond to Classmates’ Posts

After you have created your own post, look over the discussion forum posts of your classmates and respond to at least two of them.

Part 3: Incorporate Feedback

Review the feedback you receive from classmates and your instructor. Use this feedback to revise and improve your work before submitting it as part of the “Complete Marketing Plan” assignment.

Modernization of NTUC Income

Sources: Melanie Liew, Computerworld, July 2004; “NTUC Income of Singapore Successfully Implemented eBaoTech Lifesystem,” ebaotech.com, accessed November 2008; Neerja Sethi & D G Allampallai, “NTUC Income of Singapore (A): Re-architecting Legacy Systems,” asiacase.com, October 2005

NTUC Income (“Income”), one of Singapore’s largest insurers, has over 1.8 million policy holders with total assets of S$21.3 billion. The insurer employs about 3,400 insurance advisors and 1,200 office staff, with the majority located across an eight-branch network. On June 1, 2003, Income succeeded in the migration of its legacy insurance systems to a digital webbased system. The Herculean task required not only the upgrading of hardware and applications, it also required Income to streamline its decade-old business processes and IT practices.

Until a few years ago, Income’s insurance processes were very tedious and paper-based. The entire insurance process started with customers meeting an agent, filling in forms and submitting documents. The agent would then submit the forms at branches, from where they were sent by couriers to the Office Services department. The collection schedule could introduce delays of two to three days. Office Services would log documents, sort them, and then send them to departments for underwriting. Proposals were allocated to underwriting staff, mostly at random. Accepted proposals were sent for printing at the Computer Services department and then redistributed. For storage, all original documents were packed and sent to warehouses where, over two to three days, a total of seven staff would log and store the documents. In all, paper policies comprising 45 million documents were stored in over 16,000 cartons at three warehouses. Whenever a document needed to be retrieved, it would take about two days to locate and ship it by courier. Refiling would again take about two days.

In 2002, despite periodic investments to upgrade the HP 3000 mainframe that hosted the core insurance applications as well as the accounting and management information systems, it still frequently broke down. When a system breakdown did occur, work had to be stopped while data was restored. Additionally, the HP 3000 backup system could only restore the data to the version from the previous day. This meant that backups had to be performed at the end of every day in a costly and tedious process, or the company would risk losing important data. In one of the hardware crashes, it took several months to recover the lost data. In all, the HP 3000 system experienced a total of three major hardware failures, resulting in a total of six days of complete downtime.

That was not enough. The COBOL programs that were developed in the early 1980s and maintained by Income’s in-house IT team also broke multiple times, halted the systems, and caused temporary interruptions. In addition, the IT team found developing new products in COBOL to be quite cumbersome and the time taken to launch new products ranged from a few weeks to months.

At the same time, transaction processing for policy underwriting was still a batch process and information was not available to agents and advisors in real-time. As a result, when staff processed a new customer application for motor insurance, they did not know if the applicant was an existing customer of Income, which led to the loss of opportunities for cross-product sales, as staff had to pass physical documents between each other and there was no means of viewing an up-to-date report on a customer’s history on demand. Furthermore, compatibility issues between the HP 3000 and employees’ notebooks caused ongoing problems, especially with a rise in telecommuting.

All this changed in June 2003, when Income switched to the Java based eBao LifeSystem from eBao Technology. The software comprised three subsystems - Policy Administration, Sales Management and Supplementary Resources — and fulfilled many of the company’s requirements, from customerorientated design to barcode technology capabilities, and the ability to support changes in business processes.

Implementation work started in September 2002 and the project was completed in nine months. By May 2003, all the customization, data migration of Income’s individual and group life insurance businesses and training were completed.

The new system was immediately operational on a high-availability platform. All applications resided on two or more servers, each connected by two or more communication lines, all of which were “load balanced.” This robust architecture minimized downtime occurrence due to hardware or operating system failures.

As part of eBao implementation, Income decided to replace its entire IT infrastructure with a more robust, scalable architecture. For example, all servicing branches were equipped with scanners; monitors were changed to 20 inches; PC RAM size was upgraded to 128 MB; and new hardware and software for application servers, database servers, web servers, and disk storage systems were installed. Furthermore, the LAN cables were replaced with faster cables, a fibre-optic backbone, and wireless capability.

In addition, Income also revamped its business continuity and disaster-recovery plans. A real-time hot backup disaster-recovery center was implemented, where the machines were always running and fully operational. Data was transmitted immediately on the fly from the primary datacentre to the backup machines’ data storage. In the event of the datacentre site becoming unavailable, the operations could be switched quickly to the disaster recovery site without the need to rely on restoration of previous day data.

Moving to a paperless environment, however, was not easy. Income had to throw away all paper records, including legal paper documents. Under the new system, all documents were scanned and stored on “trusted” storage devices - secured, reliable digital vaults that enabled strict compliance with stringent statutory requirements. Income had to train employees who had been accustomed to working with paper to use the eBao system and change the way they worked.

As a result of adopting eBao Life System, about 500 office staff and 3,400 insurance advisors could access the system anytime, anywhere. Staff members who would telecommute enjoyed faster access to information, almost as fast as those who accessed the information in the office.

This allowed Income to view a summary of each customer over different products and business areas. As a result, cross-selling became easier, and customer service could be improved. Simplified workflows cut policy processing time and cost by half, and greatly reduced the time required to design and launch new products from months to days.

Additionally, the systems allowed for online support of customers, agents and brokers.

CASE STUDY QUESTIONS

1. What were the problems faced by Income in this case? How were the problems resolved by the new digital system?

2. What types of information systems and business processes were used by Income before migrating to the fully digital system?

3. Describe the Information systems and IT infrastructure at Income after migrating to the fully digital system?

4. What benefits did Income reap from the new system?

5. How well is Income prepared for the future? Are the problems described in the case likely to be repeated?

In 2004​, one county reported that among 3116 white women who had​ babies, 139 were multiple births. There were also 23 multiple births to 607 black women. Does this indicate any racial difference in the likelihood of multiple​ births? ​a) Test an appropriate hypothesis and state your conclusion. ​b) If your conclusion is​ incorrect, which type of error did you​ commit? ​a) Let p1 be the proportion of multiple births for white women and  p2 be the proportion of multiple births for black women. Choose the correct null and alternative hypotheses below.

Criminal Justice - short writting- Plea bargaining

Between 2002 and 2004, Ariel Castro kidnapped three young women and held them prisoner in his Cleveland, Ohio home. Held against their will for ten years, the women were beaten, raped, and starved. In May 2013, one of the women screamed for help when she saw neighbors through a screen door. Hours later, the two other women were rescued and Castro was arrested. Over the course of two months, 977 charges were brought against Castro including kidnapping, rape, and aggravated murder for the intentional induction of five miscarriages. Castro pled guilty to 937 of the 977 charges in a plea bargain that spared him the death penalty.

As we noted in Chapter 10, prosecutors, defense attorneys, and defendants often agree to plea bargains, in which the prosecutor and the defense work out a mutually satisfactory agreement that is subject to court approval. In this case, Castro pled guilty to the kidnapping, rape, and aggravated murder charges in exchange for consecutive life sentences, plus 1,000 years with no eligibility for parole. He subsequently committed suicide while in prison. Conduct some independent research on this case. Considering what you have learned about plea bargaining in Chapter 10 (Criminal justice by siegel) , please answer the following:

How could a man in a urban area kidnap and hold 3 women against their will for 10 years? Was this case an example of the effective use of plea bargaining? Explain.

(250 word minimum response required)

1. When Air Canada emerged from bankruptcy protection in 2004, its top management decided to replace some of its older planes with new ones. In particular, several relatively small Embraer and Bombardier planes (with fewer than 90 seats) and several large Boeing 777 and 787 (with more than 200 seats) were ordered. These are much fuel efficient than the planes they replace.

  However, Air Canada operations are still not as low as WestJet’s. An available Seat Mile costs Air Canada 16-17¢ whereas it costs WestJet 11-12¢. Recall that WestJet is non-unionized, runs only one type of plane (Boeing 737 which seats 100-150 passengers), and is financially stronger.

1. Discuss five pros and cons of Air Canada’s decision.
2. Identify five current trends in operation management and discuss how Air Canada can use them to improve their operations.