The Wellington Plaza Hotel is located close to the main railway station in a large regional city. Its main client base is business people visiting the city for work-related purposes. The second-largest group of clients consists of groups of (mainly) women visiting the city for its great shopping. All major department stores have a presence in the city and there are a number of specialty shops and factory outlets. Another large group of clients are groups of (mainly) men visiting the city for various sports events, including several important hockey games during the winter. Occupancy rates have been reasonable but stagnant for several years, providing a steady but unsatisfactory rate of return for the owners of the hotel. Revenues have only been sufficient to cover operating costs. In an effort to increase the hotel’s profitability, a major renovation program was undertaken and completed earlier this year. The renovation was predicted to increase the relative attractiveness of the hotel to guests. It was also undertaken to earn additional revenue from the rent of a new coffee shop on the ground floor. The coffee shop is run by a separate company that has purchased a franchise of a major international brand. An economic slow down means business travel is down by 25 percent across the country. Further, discretionary retail spending is down by 40 percent. Several specialty shops in the city have already shut down and others are cutting their opening hours. In addition, the hockey series was won by the local team in four games (instead of the possible seven games). Thousands of visitors left the city early once the final game was over. Just before the hockey games began, the coffee-shop owners went bankrupt and closed down, breaking their lease. The hotel owners are seeking legal advice on whether they can claim penalty fees on the broken lease. Finally, the hotel owners’ bank is warning that the short-term financing obtained for the renovations will not be renewed when it is due (one month after year end). The hotel managers had expected to repay the debt from this year’s bookings and the coffee-shop lease. The hotel owners are still hopeful that the summer will bring a large increase in occupancy (and revenue) as the weather is expected to be nice. This expected summer trade is essential to meet repayments on the long-term debt and to convince the bank to extend the short-term debt. (a) New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect. Which of the following conditions in this case may cast doubt on the client’s ability to continue as a going concern? (There may be more than one correct answer)

A.Economic slowdown

B.Prolonged losses

C.Inability to renew short-term financing when it comes due

D.Supplier reluctance to provide goods on credit

E.Lower occupancy fees due to reduced demand from customers

F.Loss of rent from coffee shop with uncertainty about a new lease

G.Rapid growth with insufficient planning

H.Falling behind competitors

Case – Recreational Park Project

The public has recognized the benefits of recreation and parks as essential to their health and quality of life. A recent survey conducted in 2016 found that the construction of more recreational facilities was a top priority among residents in Lazarette Town (in the Caribbean).

As such, the town council in Lazarette, with the help of other key stakeholders, has sourced and secured three (3) million dollars of grant funds from the Caribbean Wellness Community (CWC) for the development of a mini outdoor recreational park on three (3) acres of land donated by a benevolent resident of the town.

The park will contain sporting facilities among other recreational facilities (e.g. walking trails, children playground, tennis court, basketball court, work out stations, benches, shower facilities, rest rooms etc.). All major key stakeholders and sponsors have unanimously agreed that that the facility should cater for residents of all ages. Additionally, a group of minority stakeholders has expressed their requirements of having an eco-friendly and climate resilient facility. The park should be completed and ready for use by 2022, i.e. the project duration should not exceed two years.

To ensure that the project is completed on time, within scope and on budget, the funding agency and the Lazarette Town Council require that a dedicated and knowledgeable project team is assigned to the project. CWC has expressed the need for the project deliverables to be of ‘high’ quality to guarantee stakeholders’ satisfaction and safety. The CWC requires that ‘tight’ procurement processes should be followed to ensure transparency, accountability and economy. It is anticipated that most of the goods, works and services for building the park will be procured from vendors, suppliers and contractors in the town. In addition, CWC has detailed the need for both positive and negative projects risk to be properly managed throughout the project.

In response to CWC implied and expressed requirements, the Lazarette Town Council has selected and appointed your team to provide project management services for the Recreational Park Project. As a proactive team, your team has decided to use ‘best practices’ in project management to plan project activities and get approval from key project stakeholders before constructing or building the facility. Give the type and nature of the project, the intention is to use a traditional/waterfall approach to project management activities instead of the largely popular and contemporary agile methodology used other industries.

Your team understands the value of planning before doing, and the council’s concerns of not losing the grant funding from CWC. In addition, your team is keen on building a good reputation in the

town. With a can do attitude and the need to increase the chances of the project success, the project management team (your 5-member group) is determined to ensure that the team utilizes the ‘best practices’ for planning, executing and controlling this valuable community based project.

1. Propose an initial risk register for the Recreational Park Project. The risk register should contain a minimum of 10 risks.

* Use template of your choice fo

Required:

A manufacturing company holds large amounts of factory machinery on its balance sheet. The machinery is custom built using specifications that make it unsuitable for use in any other location. For this reason it is unlikely that there could exist a resale market for this machinery.  

Discuss:  

1. two advantages of using historical cost to measure this machinery.     (2.5 marks)
2. two advantages of using the revaluation model to measure this machinery.      (2.5 marks)

1. In an L.A. Law episode, an automobile manufacturer knowingly built cars that had a significant safety flaw. Rather than redesigning the cars (at substantial additional cost), the manufacturer calculated the expected costs of future lawsuits and determined that it would be cheaper to sell an unsafe car and defend itself against lawsuits than to redesign the car. What issues does the financial analysis overlook? What is the consequence of not redesigning the car?

University Car Wash built a deluxe car wash across the street from campus. The new machines cost $225,000 including installation. The company estimates that the equipment will have a residual value of $22,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows:

Required:

1. Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate calculations.)
  

2. Prepare a depreciation schedule for six years using the double-declining-balance method. (Do not round your intermediate calculations.)
  

3. Prepare a depreciation schedule for six years using the activity-based method. (Round your "Depreciation Rate" to 2 decimal places and use this amount in all subsequent calculations.)
  

You just got hired at a brand new hospital as a financial analyst and the Board wants to buy an MRI machine but they are unsure if this makes financial sense. You gather some figures so you can make an informed decision to present to the Board. (questions 40-44) Use CF’s given, no further calculation has to be done for CF’s.

Cost of the MRI machine 1.5 million

Salvage value after 5 years 50k

Working capital to hire an operator 200k only initially and not recoverable.

CF yr 1-3 400k

CF yr 4-5 300k

The hospital currently has no common stock or preferred stock or debt in their capital structure as it was funded with a 25 million dollar gift from Bill Gates. The machine is to be financed with a 5%, 5 year loan. Interest is tax deductible and the tax rate is 30%

Assume now that the hospital was financed with 60% debt and 40% equity. The cost of debt is 6% and taxes are 20%, while the risk free rate is 3%, beta is .8 and the return of the market is 9%. If cash flow in years 1-3 are now assumed to increase to 500k instead of 400k, what would you recommend to the board?

a. Yes as it adds 136k in value

b. Yes as it adds 98k in value

c. no as the IRR

d. Yes as it adds 100k in value

44. T/F the payback under the original MRI assumptions is 4.67 years

Universe Studios Sentiasa is a theme park licensed from a major Bollywood studio. Customers pay a fixed fee to enter the park where they can participate in a variety of activities such as riding roller-coasters, playing on slides and purchasing themed souvenirs from gift shops.

Customers purchase tickets to enter the theme park from ticket offices located outside the park. Tickets are only valid on the day of purchase. Adults and children are chargedthe same price for admission to the park. Tickets are preprinted and stored in each ticket office. Tickets are purchased using either cash or credit cards. Each ticket has a number comprising of two elements - two digits relating to the ticket office followed by six digits to identify the ticket. The last six digits are in ascending sequential order.All cash ticket sales are recorded on a computer showing the amount of each sale and the number of tickets issued. This information is transferred electronically to the accounts office. Cash is collected regularly from each ticket office by two security guards. The cash is then counted by two accounts clerks and banked on a daily basis. The total cash from each ticket office is agreed to the sales information that has been transferred from each office. Total cash received is then recorded in the cash book, and then the general ledger.

The park also accepts Visa and Mastercard. Payments by credit cards are authorised online as the customers purchase their tickets. Computers in each ticket office record the sales information, which is transferred electronically to the accounts office. Credit card sales are recorded for each credit card company in a receivables ledger. When payment is received from the credit card companies, the accounts clerks agree the total sales values to the amounts received from the credit card companies, less the commission payable to those companies. The receivables ledger is updated with the payments received. You are now commencing the planning of the annual audit of Universe Studios Sentiasa .

Required

(a) Identify four (4) risks that could affect the assertion of completeness of sales and cash receipts. [12 marks] (b) Discuss the extent to which substantive procedures could be used to confirm the assertion of completeness of income in Universe Studios Sentiasa. [6 marks] (c) Provide any four (4) substantive analytical procedures that can be used to give assurance on the total income from ticket sales for one day in Universe Studios Sentiasa. [12 marks]

An Illinois state program evaluator is tasked with studying the intelligence of soon-to-graduate high school students in a number of Chicago-area high schools.

One of the specific questions that needs to be answered is, “How do the students of Collins High School, one of Chicago’s lowest-rated high schools in terms of academic achievement, fare in intelligence compared to students of Lincoln Park High School, one of Chicago’s highest-rated high schools in terms of academic achievement?”.

To conduct this study, the program evaluator administers the Wechsler Adult Intelligence Scale, 4th Edition (WAIS-IV) to one 12th grade class from each high school in the Chicago area (if you are interested in learning more about the WAIS-IV, click here).

The following table shows the WAIS-IV scores for student from Collins HS and Lincoln Park HS (note: data were fabricated for purposes of this excersize):

First, complete the below grouped frequency table of WAIS-IV scores for each HS:

Compute the appropriate calculations to complete the following table :

What is the shape of the distribution of intelligence scores (normal, negatively skewed, positively skewed) for Collins HS? Explain how you arrived at your answer.

What is the shape of the distribution of intelligence scores (normal, negatively skewed, positively skewed) for Lincoln Park HS? Explain how you arrived at your answer.

Organizational culture - Ritz-Carlton

The Ritz-Carlton is committed to treating its guests as HRHers of the hotel, drawing on the best institutional cultures in the area of ​​residence, and the staff are referred to as "ladies and gentlemen". The hotel employees carry a card with the hotel logo printed on it that states: “We, ladies and gentlemen, provide the service to women and gentlemen.”

They have trained the employees of the Ritz in very precise standards and specifications to deal with customers. The founders of the company, Caesar Ritz and Auguste Escover, set these standards for more than a century, and Ritz employees are continuing to be trained in the company's traditions and values.

The managers reinforce the company’s values ​​and review service methods in 15-minute “show” sessions every day in every hotel building. These values ​​form the basis for employee training and compensation. Nothing is left to chance when it comes to providing exemplary customer service,

Prospective employees pass tests related to cultural suitability and attributes associated with the innate love of service provision. "The smile should look natural," says one of the company’s managers. Although team members are expected to be highly motivated and highly motivated, their behavior in dealing with inmates is very detailed and written, which is the company's new approach in contrast to what the company has been doing before: No less for employees how to make inmates feel happy. Employees are expected to discover this themselves now. Diana Orrick, Vice President, says, “We have switched from this written guideline approach and moved to results management.” But the result has not changed. The goal is still for the inmate to express his admiration for the service they receive. However, based on the new approach, the interactions of team members with inmates are more natural, calm, and honest, which is better than appearing as lines from a booklet.
answer the questions:

1. What is the prevailing culture at the Ritz-Carlton? In your opinion, why is this type of culture important to a luxury hotel? With a discussion of the weaknesses of such a culture type?
2. What challenges do you think the Ritz-Carlton Hotel faced in changing the organizational culture? With a discussion of what the Ritz-Carlton should do to maintain the new organizational culture?
3. What characteristics of a potential employee do you think will be the happiest and most successful in this culture? In your opinion, how can new employees "learn" this culture?
4. What can other organizations learn from the Ritz-Carlton about the importance of organizational culture?