Chapter 1, Problem 12.4EC

We examine what might happen in the worst-case scenario, but the true worst case would involve a total disaster with extremely remote probability. We certainly would like to prepare ourselves for the worst possible outcome, but shall we make decisions based on something that is extremely unlikely to happen? Consider Samsung’s recent experience. Samsung was forced to recall 2.5million Galaxy Note 7 smartphones just one month after it was introduced because multiple reports on the phones caught fire, and eventually stopped all production in the following month. Some estimated that Samsung incurred a $5 billion write-off due to this fiasco. Would you consider it Samsung’s failure not to prepare for this worst-case scenario? Why or why not? As a member of Samsung’s FP&A team, what would you do differently for evaluating future products?

Uninsured motorists face the burden of paying for accidents themselves if involved in an accident. They also impose costs on others if they are unable to bear the cost of the damages to third parties. In this case, a.the government could not improve upon this outcome. b.the government could improve the market outcome by requiring everyone carry auto insurance. c.the government could improve this outcome by requiring insurance d.companies to lower premiums for all drivers.

The COVID-19 pandemic has affected one of your customers, NEST Ltd adversely. Even though the economies are fast recovering, they have contacted your company to request to purchase on credit instead of cash on delivery. Your boss, Alan, the Marketing Manager has instructed you to review their request. He has asked you to review NEST Ltd’s latest set of financial statements. (a)Identify the key financial statements. Explain how the information reported in these statements will help you to decide whether to accede to NEST Ltd’s request.

2021 will be the year with fewer restrictions on airline industry. Vaccination has caused glimpse of hope for tourism industry to stay alert. Seems like airline industry has gained their ground back from the government and trying to fill for the cumulated losses they faced during the pandemic. We have seen more number of international flights, either essential or nonessential, arriving at the airports and potentially become a threat. And we still witness hesitation from the governments when dealing with international travellers. What would be your stand in this balance of power between the federal government and the airline industries thriving for profit. Bring three major grounds for your reasoning considering the following factors: airlines are not necessarily private corporations, federal government is responsible for the health of the citizens and residents, federal government is responsible to provide fair competition ground for the corporations to compete, and there is no clear…

Do you think that Sony’s response to the attack was appropriate? Why or why not? What might Sony and the U.S. government done differently to discourage future such attacks on other U.S. organizations? Are there measures that organizations and the U.S. government can take together to prevent both real-world terrorist violence and cyberattacks? According to a recent report by Gartner, most business users will have access to some sort of self-service BI tool within the next few years; however, Gartner estimates that less than 10 percent of companies will have sufficient data governance practices in place to prevent data inconsistencies across the organization. Why do you think so many companies continue to invest in new analytics tools without implementing governance programs that ensure data consistency?

One of the major difficulties facing the health insurance industry is that the people who are young and healthy see no need to buy insurance. The result of this tendency is that the people who want health insurance are the people that the insurance companies have the least desire to insure. The government's solution, under the Affordable Care Act (also known as Obamacare), was to simply mandate that all people must have health insurance. Unfortunately, this mandate did not yield the hoped for results of keeping one's doctor and cutting medical expenditures by $2,500 per family per year. (Infact, premiums have been rising.) Thus more reform is being talked about Please explain the economic impact of the following reform proposals: 1. Decouple insurance from employment (allowing people to shop for their own insurance like we do for car insurance). 2. Allow insurance companies to screen applicants. 3. Allow consumers to signal that they are low-risk through the purchase of high-deductible…

Give typing answer with explanation and conclusion  During the COVID-19 pandemic, small businesses were much more resilient than larger businesses, resulting in the federal government offering loan guarantees and payroll protection for larger businesses predominately. Group startsTrue or FalseTrue, unselectedFalse, selected

Distributed power generation will end the long-distance tyranny of the grid. For decades, control over energy has been deemed too important to be left to the markets. Politicians and officials have been dazzled by the economies of scale promised by ever bigger power plants, constructed a long way from consumers. They have put up with the low efficiency of those plants, and the environmental harm they do, because they have accepted that the generation, transmission and distribution of power must be controlled by the government or another monopoly. Yet in the beginning things were very different. When Thomas Edison set up his first heat-and-power co-generation plant near Wall Street more than 100 years ago, he thought the best way to meet customers’ needs would be to set up networks of decentralised power plants in or near homes and offices. Now, after a century that saw power stations getting ever bigger, transmission grids spreading ever wider and central planners growing ever…

Please answer in your own words After the pandemic ended, most of us are back to in-person work.  However, the remote work and study format has a long-term impact on our society and economy. Also, with the introduction of AI-Generated Content like ChatGPT, our life and labor markets will change. Please discuss how the above one or two new norms will influence your investment decisions, such as which companies and/or industries will benefit from the change, and how you should change your investment strategy (i.e., investing in more stocks or bonds or real estate, investing in which companies, sectors, and industries).