Over a five-year period, the quarterly change in the price per share of common stock for a major oil company ranged from -6% to 10%. A financial analyst wants to learn what can be expected for price appreciation of this stock over the next two years. Using the five-year history as a basis, the analyst is willing to assume that the change in price for each quarter is uniformly distributed between -6% and 10%. Use simulation to provide information about the price per share for the stock over the coming two-year period (eight quarters).

1. Use the random numbers 0.54, 0.98, 0.17, 0.16, 0.50, 0.77, 0.41 and 0.53 to simulate the quarterly price change for each of the eight quarters. If required, round your answers to two decimal places. For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300)
   

   Quarter	r	Return %
   1	0.54	%
   2	0.98	%
   3	0.17	%
   4	0.16	%
   5	0.50	%
   6	0.77	%
   7	0.41	%
   8	0.53	%

2. If the current price per share is $82, what is the simulated price per share at the end of the two-year period? If required, round your answer to two decimal places.
   
   $   
   
3. Discuss how risk analysis would be helpful in identifying the risk associated with a two-year investment in this stock.
   
   Risk analysis requires   of the eight-quarter, two-year period, which would then provide a distribution of the ending price per share.

Develop a production plan and calculate the annual cost for a firm whose demand forecast is fall, 10,000; winter, 8,000; spring, 7,000; summer, 12,000. Inventory at the beginning of fall is 500 units. At the beginning of fall you currently have 30 workers, but you plan to hire temporary workers at the beginning of summer and lay them off at the end of summer. In addition, you have negotiated with the union an option to use the regular workforce on overtime during winter or spring only if overtime is necessary to prevent stockouts at the end of those quarters. Overtime is not available during the fall. Relevant costs are hiring, $110 for each temp; layoff, $220 for each worker laid off; inventory holding, $5 per unit-quarter; backorder, $10 per unit; straight time, $5 per hour; overtime, $8 per hour. Assume that the productivity is 0.5 unit per worker hour, with eight hours per day and 60 days per season. In each quarter, produce to the full output of your regular workforce, even if that results in excess production. In Winter and Spring, use overtime only if needed to meet the production required in that quarter. Do not use overtime to build excess inventory in prior seasons expressly for the purpose of reducing the number of temp workers in Summer. (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round up "Number of temp workers, Workers hired and Workers laid off" to the next whole number and all other answers to the nearest whole number.)

a. credit to Finished Goods of $60,600

b. debit to Finished Goods of $66,520

c. credit to Cost of Goods Sold of $66,520

d. credit to Work in Process of $60,600

Which items count as part of this year's GDP?

Group of answer choices

final goods

      [ Choose ]            no            yes      

intermediate goods

      [ Choose ]            no            yes      

newly produced final goods

      [ Choose ]            no            yes      

the sale of new final goods

      [ Choose ]            no            yes      

newly produced capital goods

      [ Choose ]            no            yes      

used goods

      [ Choose ]            no            yes      

services

      [ Choose ]            no            yes      

government transfer payments

      [ Choose ]            no            yes      

1. In each of A-C, below, indicate whether:

a) the statement is possible under the laws of thermodynamics; b) the statement violates the First Law; c) the statement violates the Second Law. In the case of a Second Law violation, circle the name of the scientist whose version of the second law is most simply and obviously broken. In each case there is a best name, but feel free to explain your choice. (Adapted from Bill Reinhardt.)

A. A novel and reversible heat engine absorbs 10 kJ of energy from a high temperature bath, performs 8 kJ of work on the surroundings, and exhausts 5 kJ of heat into a low temperature heat bath.

a. possible

b. violates First Law

c. violates Second Law: Kelvin Clausius Boltzmann

B. One night you wake up to discover that all the air in your room has gone under your bed. Note that this happens with no change in energy or temperature.

a. possible

b. violates First Law

c. violates Second Law: Kelvin Clausius Boltzmann

C. A novel & reversible heat engine absorbs 10 kJ of energy from a low temperature reservoir, performs 8 kJ of work on the surroundings, and exhausts 2 kJ of energy into a high temperature bath.

a. possible

b. violates First Law

c. violates Second Law: Kelvin Clausius Boltzmann

In another scenario (not related to part a or b), let’s assume that you prefer the 10-year loan because you want to pay off the loan faster.   Now the bank also offers a 10-year variable-interest mortgage loan with the first 3 years locked with an APR of 3%. And after 3 years, the bank will use floating interest rate based on market condition. Somehow you believe that the floating interest rate is going to be within range of 1% to 10%, with 4.5% being the most likely number.
First, calculate the two separete amortization schedules for (a) first 3 years with fixed 3% APR; (b) the remaining 7 years with 4.5% APR.
Next, conduct a sensitivity analysis of how your monthly payment (PMT) and total interest payment for these 10 years are going to differ across different assumptions of APR for the 7 years.\

25) What is a critical element associated with using a particular type of middleman?

Group of answer choices

number of employees

knowledge of the culture of the target market

cash-flow patterns

influence over the target market

mode of transportation for moving goods

26)

According to experienced exporters, what is the only effective way to select a middleman?

Group of answer choices

Talk personally to ultimate consumers to find whom they consider to be the best distributors.

Consult trade organizations and select the distributor recommended by them.

Conduct a background check on all the distributors available in the target market.

Issue a request-for-proposal to all distributors in the target market and evaluate their responses.

Consult other manufacturers of similar products and select the distributor recommended by them.

27)

What are the major components in the marketing communications mix for most companies?

Group of answer choices

public relations and sales promotions

advertising and personal selling

direct selling and trade shows

direct selling and sales promotions

public relations and advertising

28)

Due to differences in culture in different markets, standardized products that are marketed globally will most likely require

Group of answer choices

standardized secondary attributes.

different primary functions.

consistent promotional messages.

standardized marketing strategies.

different advertising appeals.

This week we cover decision making related to pricing strategy. We often think of “Price” in terms of our most common experience – prices we pay for goods and services. However, prices can be quoted in non-traditional terms, as well.

• Insurance market: Price of insurance is the insurance premium
• Credit Market: Price of credit is the interest rate (effective annual rate)
• Money Market: Price of holding cash is the inflation rate
• Barter Arrangement: Price of a barter arrangement is stated in terms of commodities involved in the barter.

For each situation described below, discuss the nature of the price discrimination (whether it is direct or indirect price discrimination), and substantiate your conclusions.

1. Higher interest rates on car loans for borrowers with lower credit scores
2. Charging ethnic minorities (or red lining) higher rates on mortgages and mortgage refinance
3. Kohl's retailer offering discounts for early morning shoppers
4. Charging higher rates on business loans
5. Volume discounts and/or benefits (example free shipping)
6. Charging higher rates on mortgage related financing for borrowers in a certain zip code.

Additional business illustrations of price discrimination drawn from your experience are most welcome.

Also, is price discrimination generally illegal? In the above list which ones are illegal?

Is price discrimination an ethical strategy?

One of the most important costs in the hospitality businesses is the Cost of Sales (or Cost of Goods Sold). How is it determined? Please select the most appropriate answer from the list below.

1. It is calculated by adding up all purchases of inventory during one accounting period.

2. It is the amount of inventory available on hand. It is calculated by adding the value of individual items by counting them.

3. It is determined by adding all purchases to the beginning inventory amount, and then by subtracting the amount of inventory on hand.

4. It is calculated by multiplying the target percentage (%) predetermined by the management.

How do we determine whether the labor expense has truly grown in a year compared with that of the previous year?

1. If the current year's amount is larger than that of the previous year, it has truly grown.

2. If the current year's difference between the budgeted labor expense and the actual one than that of the previous year, then this year's labor expense has truly grown.

3. Compare each year's labor expense against the revenues amount of the relevant year. If this year's labor expense percentage (%) is larger than that of the previous year, it has truly grown.

4. Divide the current year's labor expense by the previous year's labor expense. If the result is larger than 100%, then it has truly grown.