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write my assignment 16425

Andrew Ltd produces gumboot and sells it across different states in Australia. The company is considering

expanding their product market internationally by next year. The CEO, Andrew, believes that an aggressive

campaign is needed next year to maintain the entity’s present growth. The financial year begins in July and

ends in June. The CFO has presented Ray with the following data for the current year, 2018, for use in

preparing next year’s advertising campaign.

Cost Schedules

Variable costs

Per Unit ($)

Direct labour per pair 12.00

Direct materials 8.00

Variable overhead 18.00

Variable cost per pair 38.00

Fixed costs

Manufacturing $60,300

Selling 66,000

Administrative 18,600

Selling price per pair $50.00

Sales, 2018: $700,000

Andrew has set the sales target for the year 2019 at a level of $800,000.

Required (show all workings):

a) What is the contribution margin per unit and ratio for 2018?

b) What is the break‐even point in units for 2018?

c) How many pair of gumboots would have to be sold in 2019 to earn a target profit of

$171,600?

d) Andrew believes that to attain the sales target in the year 2019 additional selling expenses

of $34,000 for advertising will be required, with all other costs remaining constant. What

will be the sales in dollar for 2019 if Andrew Ltd. spends the additional advertising

expenses and expect to earn target profit 140,000 after 30% of income tax rate?

 

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Joe has ware. Joe must interact with Kim on a frequent basis, since Joe’s team performs many functions that service Kim’s tool and hardware areas. Joe appreciates that Kim is an expert in the tool and hardware business. Yet, when Joe attempts to talk with Kim and learn more about the business, he feels that Kim is dismissive and even a little irritated. At times, Joe feels as though Kim is deliberately trying to make him feel stupid. Joe is also concerned with the way Kim interacts with employees. Kim is clearly not a people person. This would not bother Joe so much, except that Kim is often very gruff with Joe’s staff as well, causing them to feel confused and hurt. Joe is not certain if Kim intends to be so gruff or if that is simply Kim’s nature. Finally, Joe has become irritated with some less-than-subtle comments Kim has made during manage- ment meetings. Kim likes to talk in sarcastic terms about the way “supervisors these days” like to “coddle” their employees and “do all that touchy-feely stuff.” Kim says, “It’s too much education and not enough hard work. That’s what the problem is.” Although Joe is not the only manager who has or is pursuing a college education, Joe has the distinct impression that Kim is referring to him. Joe decides to talk to Jim Talent about his concerns. Jim is not very sympathetic. Jim challenges Joe to solve the problem on his own by talking with Kim directly. “And do it quickly,” Jim says. “I’ve got a big project that I want the two of you to work on together.” Case Questions Part A. Using the supportive confrontation model, analyze Joe’s situation involving his relationship with Kim and discuss the following:

1. What are the problems, and who owns them based on the window on behavior?

2. What research and reflection should Joe do to test his assumptions and perceptions? What are the facts? Does Joe have legitimate reasons to feel as he does? What more should he seek to understand about Kim before attempting to address the situation?

3. Should Joe seek to (a) change his attitude, (b) change his environment, or) confront Kim regarding Kim’s behavior? Defend your choice.

 

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1. You bought a call option on € with an exercise price of $2 and you paid $0.08/€ as premium. At the same time, you sold a put on € with an exercise price of $2 and you received $0.10/€ as premium.

a. Please draw the combined profit graph. Show all appropriate numbers.

b. What is the name of this strategy?

c. What is the break-even point?

d. What is your profit/loss if ST = $1.97/€?

e. What is your profit/loss if ST = $1.99/€?

f. What is your profit/loss if ST = $2.10/€?

2.

a. I have a long position in a put option on € with an exercise price of $2.2/€ and a long position in a call option on € with an exercise price of $2.4/€. I paid $0.10/€ for each option. Draw the combined graph. What is the name of this strategy?

b. I have a short position in a put option on € with an exercise price of $2.2/€ and a short position in a call option on € with an exercise price of $2.4/€. I received $0.15/€ for each option. Draw the combined graph. What is the name of this strategy?

c. If I have both of these strategies together (part a and part b), how will my combined (4 options) graph look like? What is my loss/profit if ST = $1.8/€? What is my loss/profit if ST = $2.5/€?

d. Did I make a good or a bad decision when I combined both strategies? What is the advantage or disadvantage of combining these two strategies?

3. You are expecting the $/£ exchange rate to go down in the future. At the same time, you are willing to accept a small return in exchange for eliminating the risk of losing too much if the rate goes up. In other words, you want to devise a strategy that gives you a small return if the exchange rate goes down and a small loss if the rate goes up. You are considering a combination of some the following basic positions: long £, short £, long call, short call, long put, short put (all on £). What should you do?

Hint: The answer is a combination of just a few of these 6 basic positions.

4.. You have the quotations for the following positions:

 a. long or short € (current rate is $2.1/€)

b. long or short call (exercise price is $2.1/€, the premium is $0.05/€ for both long and short)

c. long or short put (exercise price is $2.1/€, the premium is $0.03/€ for both long and short)

Is there an arbitrage opportunity here? In other words, can you make a profit without taking any risk? Show me the graphs and the appropriate numbers.

 

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Consider the following market game. An incumbent firm, called firm 3, is already in an industry. Two potential entrants, called firms 1 and 2, can each enter the industry by paying the entry cost of 10. First, firm 1 decides whether to enter or not. Then, after observing firm l’s choice, firm 2 decides whether to enter or not. Every firm, including firm 3, observes the choices of firms 1 and 2. After this, all of the firms in the industry (including firm 3) compete in a Cournot oligopoly, where they simultaneously and independently select quantities. The price is determined by the inverse demand curve p=12-Q, where Q is the total quantity produced in the industry. Assume that the firms produce at no cost in this Cournot game. Thus, if firm i is in the industry and produces qi then it earns a gross profit of (12-Q)qi in the Cournot phase. (Remember that firms 1 and 2 have to pay the fixed cost 10 to enter.)

a. Compute the subgame perfect equilibrium of this market game. Do so by first finding the equilibrium quantities and profits in the Cournot subgames. Show your answer by designating optimal actions on the tree and writing the complete subgame perfect equilibrium strategy profile. [Hint: In an n-firm Cournot oligopoly with demand p=12-Q and 0 costs, the Nash equilibrium entails each firm producing the quantity q=12/(n+1)]b. In the subgame perfect equilibrium, which firms (if any) enter the industry?

 

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