Study Assesement Managerial Science

6643 Words Jun 18th, 2014 27 Pages
EC 270/370
Second Semester, AY 2013-2014

1.
Approximately 14 million Americans are addicted to drugs and alcohol. The federal government estimates that these addicts cost the US economy $300 billion in medical expenses and lost productivity Despite the enormous potential market, many biotech companies have shied away from funding R&D initiatives to find a cure for drug and alcohol addiction. Your firm DAS (DrugAbuse Science) is a notable exception. It has spent $170 million to date working on a cure, but is now at a crossroads. It can either abandon its program or invest another $30 million today. Unfortunately, the firm’s opportunity cost of funds is 7% and it will take another 5 years before final approval from the Federal Drug
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Brazil points to its shrimp-farming industry as an example of how it can compete in world markets. In 1998, Brazil exported a meager 400 tons of shrimp. Today, Brazil exports more than 58,000 tons of shrimps, with approximately one-third of that going to the United States. Brazilian shrimp farmers, however, potentially face a new challenge in the upcoming years. The Southern Shrimp Alliance (US organization representing shrimpers) filed a dumping complaint alleging that Brazil and 5 other shrimp-producing countries are selling shrimp below “fair market value”. The organization is calling for the United States to impose a 300% tariff on all shrimp entering the US borders. Brazilian producers and the other 5 countries named in the complaint counter that they have a natural competitive advantage such as lower labor costs, availability of cheap land, and a more favorable climate, resulting in a higher yield per acre and permitting 3 harvests per year. In what many see as a bold move, the American Seafood Distributors Association (an organization representing

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