1- Take this opportunity to tell me (1) 4 different types of methods of resolving business disputes, (2) briefly describe each, and (3) at least two advantages and  one disadvantage of each method.

2-   What are 4 things that a CEO or the Board of Directors can do to promote ethical behavior within the company?

3- Tell me the difference between a question of law and a question of fact, who decides facts, and then tell me which court (trial or appellate) would handle only questions of law.  

Difference between a question of law and a question of fact

Who decides facts,

Which court (trial or appellate) would handle only questions of law

Poudre Industries is a diversified manufacturing company with a decentralized
management structure. Each division is treated as a profit center. One of these
divisions is Wellington Processing, which produces a variety of products at a
single plant. Wellington operates below capacity. Wellington’s biggest customer
for a major product, XB42, is Eaton Industries, another division of Poudre. At the
normal production level of 30,000 units, XB42 costs $840 to produce: direct
materials, $310; direct labor, $80; overhead, $450). The composition of the
overhead cost is 60% fixed and 40% variable. The current selling price of XB42
is $1,120/unit. Eaton has been paying $1,075/unit, with the discount reflecting
lower transaction costs for Wellington. Eaton has found another supplier for
XB42 at a price of $690/unit. Wellington’s president refuses to meet this price, as
it is below cost, and she will lose money on the sale.
Required: As CEO of Poudre, discuss the factors to be considered in resolving
the pricing dispute between Wellington and Eaton.

company currently has 150k shares outstanding, selling at $64 per share. The firm intends to raise $565k through a rights offering. Management suggests that a discount cannot fall below 11% as outlined in the previous issue, to which existing shareholders did not respond with much enthusiasm. They believe that a 37% discount offer is more appropriate. Also, the CEO is rejecting calls for raising capital through debt or preferred stock.
Net earnings after taxes (EAT) are $649k. Furthermore, a recent corruption scandal involving a number of senior figures in the firm has come to light in the press; soon after the rights offering was announced – in other words, it was already too late. Among the immediate consequences were a fall in stock price by 17.09% and increased capital requirements by 62%. Required: In percentage terms, determine by how much did the dollar value of one right change before and after the consequences described above, together with the 37% discount offer which was simultaneously taking place. Answer

Wing Yin Tsui, CEO of Lian Huang & Wong Bin Dean Hwang Manufacturing Limited is considering a four year project. The project requires an initial investment of $10,000,000 to buy new equipment. The equipment will be depreciated straight line to zero over the project’s life. The company believes it can generate $5,000,000 in pretax revenues in year 1. Revenues will increase at 20% per year. Total pretax operating cost would be 40% of the pretax revenues. Net working capital will be 20% of the pretax revenue for the year. Net working capital will be fully recovered at the end of the project. Revenues and operating costs will occur at the end of the year and investment in net working capital will be made at the beginning of the year. The tax rate is 40% and the discount rate is 12%.

a. What is the NPV of the project?

b. Now compute the project’s NPV assuming the project is abandoned after one year. The equipment will be salvaged for $8,000,000. Any gain or loss due to selling the equipment for other than the book value will create taxable gain/loss.

7. The distribution of annual profit at the chain of Shoe Palace stores was approximately normal with a mean of $457,300 and a standard deviation of $58,000. The CEO of the company would like to reassess the efficiency of all managers of the stores with the lowest 15% of profits. What is the maximum annual profit at the stores that fit in the lowest 15%?

8. If the population of monthly internet bills for the Ida neighborhood has a mean of $82.00 and a standard deviation of $7.50, what is the probability of selecting a household at random whose monthly bill is $64.00 or less?

9. The administration is planning on giving assessments to the top 10% of seniors. If the mean of the senior class GPAs is 3.38 with a standard deviation of 0.15, what is the indicated z-score?

10. Indicate whether the following statistics can be examples of binomial probability distributions:

a.) results of spinning a 4-color spinner

b.) results of flipping a quarter

c.) results of drawing a red or black suit from a deck of cards

d.) results of hitting red light or green light at the intersection of Main and Rt. 340

Hooters President and CEO Terry Marks had a decision to make. Thirty years ago, Hooters of America had advanced a successful chain restaurant concept which combined “good food, cold beer and pretty girls.” After a period of rapid growth and a gauntlet of legal and community challenges, Hooters began losing ground to competitors in the expanding “breastaurant” sector in the 2000s. When Terry Marks took charge of the company in 2011, Hooters was faced with a choice: (1) it could emphasize a wholesome, neighborhood environment that would welcome men, women and families; (2) it could move in a more risqué direction and compete head-tohead with racier rivals; or (3) it could find some third way to position the brand in the highly competitive restaurant industry.

What would you do if you were in Terry Marks’ shoes? Would you move to make (or keep) Hooters more family friendly? Would you suggest making it edgier? Or would you make a different strategic choice?

2. (20 pts) Wellcraft Company purchased a machine on January 1, 2015 for $625,000. The machine has a four year useful life and a salvage value of $25,000. The machine was depreciated using sum of the years digits. On January 1, 2017, two years later, it was determined they should have used straight line depreciation and decided to change to straight line. The useful life was also extended by two years, and the salvage value was reduced to $15,000. Profit for 2015 was $800,000 and for 2016 was $900,000 using sum of the years’ digits depreciation. Prior to depreciation expense in 2017, profits were $200,000.

A. Determine the correct profits for 2015, 2016, 2017

B. Assume Wellcraft used the completed contract method for 2016 but switched to percent of completion in 2017.

                                                                        2016                              2017

Profits under completed contract          $400,000                       $450,000
Profits under percent of completion      $650,000                       $580,000

C. Sean Kowalski, CEO, is paid a bonus of 1% of profits each year. Determine his bonus paid to him in 2017.

Activity-based costing (ABC)

Marconi is a Portuguese telecommunications company that encountered problems with its ABC system. The company’s production managers felt that 23% of the costs included in the system were common costs that should not be allocated to products and that allocating these costs to products was not only inaccurate, but also irrelevant to their operational cost reduction efforts.

Concerns over the application of the ABC approach at Marconi have been raised by personnel, including some of the senior leadership team. It is the opinion of some that this method of cost allocation does not accurately reflect the cost of production and will lead to unnecessary improvements that will ultimately result in the elimination of jobs. As a respected member of the leadership team, the Chief Executive Officer (CEO) has tasked you with investigating the concerns expressed by some of the employee and management officials. You are expected to prepare a position paper either defending the use of the ABC method or recommending an alternative method of cost allocation.

1 defending the use of the ABC method or recommending an alternative method of cost allocation.

Why do so many firms apparently prefer FDI to either exporting (producing goods at home and then shipping them to the receiving country for sale) or licensing (granting a foreign entity the right to produce and sell the firm’s product in return for a royalty fee on every unit that the foreign entity sells)? Please support your answers with some examples from the real life ( if you can).

DQ 2

A) Why is the U.S. the largest recipient of FDI from companies in other countries?

B) What are companies from other countries looking for when they invest in the U.S.? What are the implications of COVID-19 on their decisions now?

C) Why is the U.S. often the largest source of FDI? Did you think it was China?

1. If the government sells U.S. Treasury bonds to finance its budget deficit, one would expect: A. interest rates to rise. B. domestic investment to rise. C. tax rates to fall. D. inflation to rise. E. interest rates to fall.

Suppose the real interest rate in the economy is 3% and the nominal interest rate is 6%, what is the current inflation rate? a. 18% b. 9% c. 2% d. 3% e. 2.5%

Which of the following actions of the Fed will increase money supply in the U.S. directly? A. Purchase U.S. government bonds B. Increase the federal funds rate C. Increase the reserve requirement D. Increase the discount rate E. Ban sales of private mutual funds