Category: Management

SavedProblem 3-10 (Algo)
Tuff Wheels has forecast the demand and the cost project for a new product to be added to its small motorized vehicle line for children. The new product is called the Kiddy Dozer. It will look like a minlature bulldozer, complete with caterpillar tracks and a blade. Tuff Wheels has forecasted the demand and the cost to develop and produce the new Kiddy Dozer. The following table contains the relevant information for this project.
Item
Value
Development cost
$850,000
Estimated development time
Pilot testing
$200,000
Ramp-up cost
$400,000
Marketing and support cost
Sales and production volume
$150,000 per year
Unit production cost
$100
Interest rate
8%
Tuff Wheels also has provided the project plan shown as follows. As can be seen in the project plan, the company thinks that the product life will be three years until a new product must be created. Assume all cash flows occur at the end of each period.
a. What are the yearly cash flows and their present value (discounted at 8 percent) of this project? What is the net present value?
Note: Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermediate calculations. Round your answer to the nearest thousand.
◻ Net present value
b. What is the impact on NPV for the Kiddy Dozer If the actual sales are 50,000 per year? 70,000 per year?
Note: Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermedlate calculations. Round your answer to the nearest thousand.
Scenario
Value
NPV 50,000
NPV 70,000
c. Based on the original sales level of 60,000, what is the effect on NPV caused by changing the discount rate to 9%, 10%, or 11%?
Note: Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermediate calculations. Round your answer to the nearest thousand.
Discount rate
NPV
NPV 9%
NPV 10%
NPV 11%

The federal Employee Adjustment and Retraining Notification (EARN) Act requires employers with 100 or more employees to provide employees, bargaining representatives (i.e., unions), and specific government agencies at least 60 days-notice of any mass layoff, plant closing, or plant relocation. The purpose of the EARN Act is to give affected workers and their families some transition time to prepare for the loss of employment, to seek a new job, and/or to seek training in a new skill that will allow the workers to obtain subsequent employment. The EARN Act covers employers with 100 or more employees, not including: employees who have worked less than six (6) months in the last 12 months, and employees who work an average of less than 20 hours a week. A mass layoff is defined as any layoff, lasting six months or more, that affects: (a) either 150 or more workers, or (b) at least 40% of the workforce when the number of laid off workers is between 50 and 149. A plant closing is defined as the closing of a facility for more than six (6) months, or when 50 or more employees are laid off during any 30-day period at a single location. A plant relocation is defined as a move to a location more than 100 miles from the prior location or a move to a location in a different state at least 75 miles from the prior location. The State legislature passed a similar notification law last year that applies to employers with 75 or more full or part-time employees where a minimum of 50 employees are to be laid off due to a plant closing, mass layoff, or relocation of the employer’s business. Unlike the EARN Act, the State law has no requirement that the number of workers to be laid off constitute a minimum percentage of the employer’s workforce. The State law takes precedent over the EARN Act in those situations in which the State law’s statutory requirements are more stringent.
Which action would NOT require the 60-day notification requirement?

Deshaun needs a(n) strategy
Deshaun needs a(n) strategy to ensure that customers have a unified experience when communicating with the company through the Website, by phone, or face-to-face with sales representatives.
A successful e-commerce system must address the many stages that consumers experience in the sales life cycle. Identify which e-commerce stage is represented in each scenario.
After-sales service
: Reggie calls the vendor of his new 3-D printer for instructions on how to troubleshoot a setup problem.
Select & negotiate
: Leon emails his supplier’s customer service department to discuss the possibilities of switching to a different shipping provider.
Purchasing
: Casey takes inventory of office supplies running low in the mailroom and also emails team leaders for a list of needed supplies. She then checks to confirm inventory numbers on the supplier’s Website.
Search & identification
: Lindsey chats online with her supplier’s customer service representative to set up a new corporate account that reflects updated information after her company’s merger.
When building a Website, you should first decide which tasks the site must accomplish. Most people agree that an effective Website is one that creates an attractive presence and that meets the needs of its visitors. Identify the Website function most important to the user in each scenario.
Obtaining contact information
: Stacey is researching his first car purchase and wants to make sure he gets a reliable car that will provide excellent gas mileage.
Providing product testimonials
: Fernanda is planning to buy a house and needs more information about her mortgage options.
Obtaining financial information
: Connie dropped her phone and cracked the screen. She’s only had it for 6 months and doesn’t want to buy a new one.
Obtaining warranty information
: Jeffrey needs to talk to the HR department at his company’s home office, which is located in another state.

The Morning Brew Coffee Shop
The Morning Brew Coffee Shop sells​ Regular, Cappuccino, and Vienna blends of coffee. The​ shop’s current daily labor cost is $ 320 the equipment cost is $ 125 and the overhead cost is $ 225 Daily​ demands, along with price and material costs per​ beverage, are given​ below:
Current Product Line
Regular Coffee
Cappuccino
Vienna coffee
Beverages sold
400
200
150
Price per beverage
$ 2.00
$ 3.00
$ 4.00
Material per beverage​ ($)
$ 0.50
$ 0.75
$ 1.25
Harald​ Luckerbauer, the manager at Morning Brew Coffee​ Shop, would like to understand how adding Eiskaffee​ (a German coffee beverage of chilled​ coffee, milk,​ sweetener, and vanilla ice​ cream) will alter the​ shop’s productivity. Her market research shows that Eiskaffee will bring in new customers and not cannibalize current demand. Assuming that the new equipment is purchased before Eiskaffee is added to the​ menu, Harald has developed new average daily demand and cost projections. The new equipment cost is $ 200 and the overhead cost is $ 350 Modified daily​ demands, as well as price and material costs per beverage for the new product​ line, are given​ below:
Modified Product Line (with Eiskaffee)
Regular Coffee
Cappuccino
Vienna coffee
Eiskaffee
Beverages sold
400
200
150
125
Price per beverage
$2.00
$ 3.00
$ 4.00
$ 6.00
Material per beverage​ ($)
$ 0.50
$ 0.75
$ 1.25
$ 2.00
a. Calculate the change in labor and multifactor productivity if Eiskaffee is added to the menu. ​(Note: Be sure to round each individual labor and multifactor productivity to no fewer than two decimal places before calculating the percentage​ changes.) The change in labor productivity if Eiskaffee is added to the menu is enter your response here​%. ​(Enter your response as a percent rounded to two decimal places and include a minus sign if productivity​ decreases.) The change in multifactor productivity if Eiskaffee is added to the menu is enter your response here​%.