Problem 3-6 Financial Statements (LO1,4)

South Sea Baubles has the following (incomplete) balance sheet and income statement.

a&b. What is shareholders’ equity in 2015 and 2016? (Enter your answers in millions.)

c&d. What is net working capital in 2015 and 2016? (Enter your answers in millions.)

e. What are taxes paid in 2016? Assume the firm pays taxes equal to 35% of taxable income. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

f. What is cash provided by operations during 2016? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

g. Net fixed assets increased from $900 million to $1,000 million during 2016. What must have been South Sea’s gross investment in fixed assets during 2016? (Enter your answer in millions.)

Write a function that accepts a dictionary and produces a sorted list of tuples

The dictionary looks like this:

{‘US’: [{'Chicago, IL': ('2/1/2020 19:43', 2, 0, 0)}, {'San Benito, CA': ('2/3/2020 3:53', 2, 0, 0)}, {'Santa Clara, CA': ('2/3/2020 0:43', 2, 0, 0)}, {'Boston, MA': ('2/1/2020 19:43', 1, 0, 0)}, {'Los Angeles, CA': ('2/1/2020 19:53', 1, 0, 0)}, {'Orange, CA': ('2/1/2020 19:53', 1, 0, 0)}, {'Seattle, WA': ('2/1/2020 19:43', 1, 0, 0)}, {'Tempe, AZ': ('2/1/2020 19:43', 1, 0, 0)}], 'Australia' : [{'New South Wales': ('2/1/2020 18:12', 4, 0, 2)}, {'Victoria': ('2/1/2020 18:12', 4, 0, 0)}, {'Queensland': ('2/4/2020 16:53', 3, 0, 0)}, {'South Australia': ('2/2/2020 22:33', 2, 0, 0)}]

For these counts, I need to use the numbers that are bolded above). The returned sorted list (in descending order) will contain key-value pairs such that each key is a country and the corresponding value is the number of cases observed within that country.

For example: [('Australia', 13),(‘US’: 11)]

Question 6 (Corporate Strategy & Development): You are consulting to a growing company with a profitable South African business based off its core product. It faces the following choices: i. Competition in its core market is beginning to intensify. It needs to protect its market leadership position and its margins which are under pressure. ii. They say offence is the best defence. The company has employed this approach to develop a new product which is adjacent to its current offering. The product is not market leader but has been doing well and is growing faster than the core business at present. It needs further funding in terms of marketing and promotion iii. There is significant opportunity in growing other African markets. A major partner has already done most of the groundwork for introducing the core product to new markets that could vastly increase the revenues and profitability of the business. Of course, there is some risk to consider. iv. The company was part of a government initiative that has recently ended. The government allowed it to keep the associated intellectual property as it has no relevance in the South African market. This technology can however be exploited to create new products in a neighbouring market and some reputable partners have expressed interest. The Questions: a. How should the business think about taking advantage of the above opportunities? b. What deliberate and emergent features could be deployed by the organisation to manage their strategy process going forward?

Part #1: The Caribbean Club The Caribbean Club is one of the Virgin’s Islands/ hottest night spots. It’s a great place for locals to meet after work and relax with friends. It’s a popular destination for tourists why stay on the island, and it’s always on the list of fun entertainment choices for the crowds from the cruise ships that dock in the harbor. The reason the Club is so popular with such a variety of customers is because the founder of the club, Ross Stewart, always has such innovative and visionary ideas that delight the patrons. For example, every night of the week the Club features different activities or shows, including beach volleyball, Caribbean shows with calypso singers, would-class musicians who play steel drums, and other island entertainment. Since Ross was a former accountant and auditor with one of the largest public accounting firms in New Zealand, he is very accustomed to brainstorming sessions to generate ideas and surface concerns. He bought this practice with him to the Caribbean and holds brainstorming sessions with his “club associates” (Which is what he called all of the employees at the club) once every month to identify new and novel ideas to increase the popularity and profitability of the club. As you might imagine, the patrons of a night club are there to relax and enjoy themselves. So, the associates thought it would be great idea to somehow be able to recognize their regular patrons so that they wouldn’t have to trouble them with a bill every time a server came to their table with another round of drinks. After all, if the club wanted these people to “feel like they were at home with friends”, the patrons shouldn’t have to bother with trying to decide who owed what to pay the bill. So, Ross and his associated came up with the idea to implant their regular customers with an implantable microchip. The idea was to make the chip “fun”- to give an elite status so that their regular patrons would want to be implanted. To dramatize the elite status of the chip, Ross decided that the Club would have a special area where only those with chips. The “VIPs”, would be admitted. And of course, this area would have various exclusive services for these members. The chip would allow the VIPs to be recognized and to be able to pay for their food and drinks without any ID-they would simply pass by a reader and the Club would know who they are and their credit balance. Ross also wanted the information system supporting the chip to be a customer relationship management tool. Answer the following questions: 1. What do you think of this idea? What are the advantages and disadvantages of this idea for the Caribbean Club? 2. What are the advantages and disadvantages for the patrons? 3. If you were a passenger on a cruise ship, or staying at a resort on the island, would you get the chip implanted? Why or why not?

Part #2: Vertical Markets and Accounting Information Needs • There are many vertical markets industries apart from industries discussed in chapter 11. Identify two additional vertical markets industries and explain what are the unique characteristics of these industries that affect their AISs?

An article in the Journal of the American Medical Assocation described an experiment to investigate the effect of four treatments on various body characteristics. In this double-blind experiment, each of 59 female subjects age 65 or older was assigned at random to one of the following four treatments:

1) P + P: placebo "growth hormone" and placebo "steroid"
2) P + S: placebo "growth hormone" and the steroid estradiol
3) G + P: growth hormone and placebo "steroid"
4) G + S: growth hormone and the steroid estradiol

The change in body fat mass was measured over the 26-week period following the treatments. Using the information provided above and in the partial table below, complete the ANOVA table (use 2 decimals for your answers).

1. It is known that the average American orders food from a restaurant in person or as take out 4.2 times a week on average. Suppose we take a sample of 30 Americans and find that the average amount of meals ordered out is 3.2 per week with a sample standard deviation of 2.82 meals. We are interested in testing if the average amount of meals ordered out is actually lower than 4.2 now.
   1. Using the sample of 30 adults, what would the 95% confidence interval be for the population mean?
   2. What are the null and alternative hypotheses?
   3. What is the critical value at 95% confidence?
   4. Calculate the test statistic.
   5. Find the p-valu
   6. What conclusion would be made here at the 95% confidence level?
   7. Would my conclusion change if I changed alpha to .01? Show reasonin

The Census Bureau gives this distribution for the number of people in American households in a certain year.

Note: In this table, 7 actually represents households of size 7 or greater. But for purposes of this exercise, assume that it means only households of size exactly 7.)

(a)

This is also the probability distribution for the size of randomly chosen households. The expected value of this distribution is the average number of people in a household. What is this expected value?

people

(b)

Suppose you take a random sample of 1,000 American households. About how many of these households will be of size 2?

households

About how many of these households will be of sizes 3 to 7?

households

(c)

Based on your calculations in part (b), how many people are represented in your sample of 1,000 households? (Hint: The number of individuals in your sample who live in households of size 7 is 7 times the number of households of size 7. Repeat this reasoning to determine the number of individuals in households of sizes 1 to 6. Add the results to get the total number of people represented in your sample.)

people

Calculate the probability distribution for the household size lived in by individual people. (Round your answers to four decimal places.)

Describe the shape of this distribution. What does this shape tell you about household structure? (Round your mean to one decimal place.)

The distribution is  ---Select--- left skewed symmetric right skewed , with a median of  and a mean of around  people.

In June 2008, the Journal of the American Academy of Dermatology reported on the use of an intermittent therapy for flare prevention and long-term disease control of eczema (red, inflamed, itchy skin). Eczema is a chronic skin disease that affects about 10% to 20% of infants and about 3% of adults and children in the United States. Researchers wanted to determine whether intermittent dosing with a specific topical inhibitor is effective in preventing eczema flare-ups in patients with stabilized eczema. Initially, 383 adults and children with moderate to severe eczema were treated with daily doses of the topical inhibitor. After 16 weeks, 197 were disease free and admitted into the maintenance phase of the study. These patients were randomized to a 3-times-weekly treatment with either the topical inhibitor or a placebo for 40 weeks. All tubes of ointments (topical inhibitor and placebo) were packaged in identical boxes and labeled “for investigational use only.” Then the packages were sealed with tamper-proof seals and shipped. Neither the researchers nor the patients knew who received the topical inhibitor or who received the placebo. During the maintenance phase researchers tracked the number of flare-free days for each patient.

Which of the following design features contributes to double blinding?
A.Randomization of patients to one of two groups

B. Distinguishing the packaging for both treatments

C. The number of flare-free days for each patient

Assume that there is no policy response to the increased saving by American families and consider the transition from the short-run to the medium-run (the medium-run is some intermediary or a transition state between the short-run and the long-run) and back to the long run. True or False. The US will see increased inflation during the transition back to long-run equilibrium. If true, explain why. If false, explain why not. (use the IS-LM and AS-AD logic to answer)

There is an American put option on a stock that expires in two months. The stock price is $55, and the standard deviation of the stock returns is 64 percent. The option has a strike price of $62, and the risk-free interest rate is an annual percentage rate of 4.4 percent. What is the price of the option? Use a two-state model with one-month steps. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

What is Put value?