Bradford is a small town that currently has no fast-food restaurants. McDonald's and Burger King are both considering entering this market. Burger King will wait until McDonald's has made its decision before deciding whether to enter. Use the decision tree below to determine the optimal strategy for each company, assuming that the minimum rate of return that owners of fast-food restaurants require on their investment is 15%. McDonald's a. What is the optimal strategy for Burger King? ○ A. Not enter the market. B. Enter the market if McDonald's builds a large store. C. Enter the market whether or not McDonald's builds a small store or a large store. D. Enter the market if McDonald's builds a small store. Q Enter Rates of return McDonald's BK 16% 16% Burger King LVY Large Store Don't Enter Rates of return McDonald's 25% BK 0% Small Store Rates of return McDonald's BK Enter 20% 20% Burger King Rates of return Don't McDonald's BK Enter 30% 0% b. What is the optimal strategy for McDonald's? ○ A. Build a small store. B. Build a large store. C. Building either a small store or a large store would be optimal. ○ D. Not build another store.

Olympus has integrated many components into its SLR camera. Recently, Olympus has introduced a smartphone app, Olympus Image Share (OI.Share) to pair with its camera. It says: "Paired with a compatible Olympus camera, the Olympus Image Share (OI.Share) smartphone app makes photography more enjoyable than ever. With this app, you can release the shutter remotely, then easily import photos from the camera to your smartphone and share your most inspiring moments with friends and family". a. How might this news be an example of non-price competition for an oligopolistic firm? Discuss.

Duddy Kravitz owns the Saint Viateur Bagel store. His world famous bagels are hand rolled, boiled in honey-water and baked in a wood-burning oven. The store sells 5,000 bagels per day and is open 365 days of the year. The bagels are so popular that, on weekends, the customer line-up runs half-way down the block. Uncle Benjy thinks that the wood-fired oven should be replaced by a modern gas oven, which would reduce costs by $0.02 per bagel. A new oven would cost $105,000. Duddy is considering Uncle Benjy's idea, but he only plans to be in business for another two years. The bagels are sold for $0.75 each. The cost of producing each bagel with the wood-burning oven is $0.50 which includes labour and raw materials. The current oven was purchased five years ago for $20,000. It could be sold today for $5,000 and will be worth $3,000 in two years. A new oven costs $105,000 today and could be sold for $55,000 in two years. Duddy's cost of capital is 9%. Assume that investment cash flows occur…

A university spent $1.3 million to install solar panels atop a parking garage. These panels will have a capacity of 900 kilowatts (kW) and have a expectancy of 20 years. Suppose that the discount rate is 10%, that electricity can be purchased at $0.30 per kilowatt-hour (kWh), and that the marginal cost of electricity production using the solar panels is zero. Hint: It may be easier to think of the present value of operating the solar panels for 1 hour per year first. Approximately how many hours per year will the solar panels need to operate to enable this project to break even? 565.55 622.11 226.22 848.33 If the solar panels can operate only for 509 hours a year at maximum, the project Continue to assume that the solar panels can operate only for 509 hours a year at maximum. break even. In order for the project to be worthwhile (i.e., at least break even), the university would need a grant of at least

Assume Allergan, Inc. is facing a capacity constraint in manufacturing Botox®. Analytically, this implies its marginal cost curve is extremely steep. As Botox® is oftentimes used for cosmetic reasons, it is reasonable to assume consumers have quite elastic demand curves. Hypothetically, assume a forthcoming study will highlight the safety of Botox® for cosmetic procedures. Given this potential study, where should Allergan, Inc. focus its strategic resources? a. Operations, specifically finding ways to lower costs in an effort to justify a price increase. b. Staffing, specifically preparing to significantly increase its staff to prepare for a large increase in the number of units of Botox® sold. c. Marketing/Pricing, specifically preparing to significantly raise the price for Botox®.

What is the Porter's Five Forces of Alibaba Group: The Rise of a Platform Giant?

SingComp-AI (“SCAI”) is a Singapore-based startup which develops compliance technology driven by artificial intelligence (“AI”) for financial institutions in Singapore. Compliance technology helps financial institutions in their adherence to applicable laws and regulations, as well as identifying and managing compliance-related risks. In the first year of its operations, SCAI assembled a competent team of professionals to help build its AI infrastructure and to support its growth. Marisa, an AI professional, was hired to head the product development team, and she is widely recognized as one of the key contributors to SCAI’s early success. In SCAI’s second year of operations, Marisa tendered her resignation. It was revealed that Marisa will be joining a rival company called “Eye-Tech” (“ET”), which upset the management of SCAI greatly. ET operates in the same business niche as SCAI, and is also looking to develop similar AI-driven compliance technology for financial institutions. Given…

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What is the Related Diversification of Alibaba Group: The Rise of a Platform Giant?

The objective of a publicly traded company is to make profit for its owners i.e. shareholders. However, there are millions of AIDS victims in this world. Most of these victims are from destitute countries, like African nations. It would be irrational for us to think that these people could afford this medicine at an existing market price. The world organizations, such as WHO (world health organization), provide with assistance by subsidizing AIDS related medicine. However, this is not enough as many people are dying every day. Many argue that this medicine should be free as it is the only way a victim's life could be prolonged or saved.  GlaxcoSmithKline already allows license for generic drug production to countries, like South Africa. Should our government be involved in controlling the price of this drug? Or, should thegovernment force Glaxco to share the key knowledge of this product with its competitors (price becomes competitive)? Explain why or why not?