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Development of Version 2.0 of a particular accounting software product is being considered by Jose? Noguera’s technology firm in Baton Rouge. The activities necessary for the completion of this project are listed in the following? table:

Activity

Normal Time? (weeks)

Crash Time? (weeks)

Normal Cost

Total Cost with Crashing

Immediate? Predecessor(s)

A

4

3

$2,200

$2,800

â€â€

B

2

1

$2,200

$2,800

â€â€

C

3

3

$500

$500

â€â€

D

8

4

$2,500

$2,820

A

E

6

3

$900

$1,350

B

F

3

2

$3,200

$4,600

C

G

4

2

$1,500

$2,000

?D, E

?a) Based on the given information regarding the activities for the? project, the project length? = ____weeks.

b) The total cost required for completing this project on normal time = $___________

c) For reducing the duration of the project by one week, the activity that should be crashed first is activity _________. The cost of the project based on the first activity selected for crashing will increase by $_________.

d) The maximum weeks by which the project can be reduced by crashing = _________weeks

 
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Sprint finally posted some reasonably good results recently. However, these could not mask the fact that the No. 3 wireless carrier is too small to ever gain any ground on AT&T Inc. (NYSE: T) and Verizon Wireless (VZ). Sprint’s revenue rose rapidly from 2002 to 2006. Over the period, sales moved from $15.2 billion to $41 billion, aided by the buyout of Nextel at the end of 2004. Sprint paid $35 billion for Nextel, and the decision turned out to be a disaster. The Sprint network ran on a different platform from Nextel’s. Customers left the combined company. Sprint made the MSN “Customer Service Hall of Shame†several times, most recently in 2010. Sprint’s customer service ratings have improved significantly since then, but the damage has been done. While AT&T and Verizon Wireless have grown rapidly, Sprint’s revenue has fallen from $41.1 billion in 2007 to $33.7 billion last year. Sprint’s cumulative loss during that period was over $43 billion. Sprint now has about 50 million subscribers to Verizon’s 104 million and AT&T’s 95 million. As a Morningstar researcher recently noted, “While Sprint has struggled, Verizon Wireless and AT&T have benefited at its expense. Fending off these much larger rivals will be increasingly difficult as data services become more important to the industry.â€Â

Q1: Which component(s) of the general environment contributed most to Sprint’s struggle? Explain.

Q2: Which components of the specific/industry environment contributed most to Sprint’s struggle? Explain.

 
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A forest originally has 10,000 trees. Suppose that the forest naturally replenishes itself by 10 percent per year. That is, at the end of one year, if nothing else happened, it would have 10,000 + (0.10 × 10,000) = 11,000 trees. (This assumption is not biologically accurate, but it keeps the math simple.) Suppose that 1,500 trees are harvested at the end of each year.

a. How many trees will the forest have at the end of one year, after accounting for both natural replenishment and the effects of harvesting?

b. Draw a stock flow diagram illustrating the ange in the forest stock from year 1 to year 2.

c. How many trees will there be at the end of two years? (Note: Base the 10 percent replenishment amount on the number of trees that exist at the beginning of the second year.)

d. How many trees will there be at the end of three years?

e. For the harvest of trees to be sustainable, what is the largest number of trees that could be harvested each year (starting with the original stock of 10,000 trees)?

 
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Kai’s records show that last month he spent $5,000 on rent for his shop, $3,000 on materials, $3,000 on wages and benefits for an employee, and $500 in interest on the loan that he used to start his business. He quit a job that had paid him $3,000 a month to devote himself full-time to this business. Suppose that he has to pay the lease on his shop and the interest on the loan regardless of whether he produces. However, suppose that at any time he can ange the amount of materials that he buys and the hours that his employee works and that he can also go back to his old job (perhaps part-time).

a. What are the accounting costs of operating his shop for the month?

b. What are the economic costs?

c. Which types of costs of running his business for a month are fixed? Which are variable?

 
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