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A manufacturer of I-phones made an investment of $500,000 in the current year on research and development (R&D). They also spent $200,000 on improving their processes. Based on the improved product design, the company expects sales to increase from 200,000 units last year to 220,000 units in the current year. Further, due to added functionality, the company plans to increase the product unit price from $300 to $350. At the end of the year, they found that rework and scrap costs had reduced from $70,000 in the previous year to $30,000 in the current year. What is the percentage increase in net profit, ignoring other costs? Was this a good investment?
 
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Variable Definitions:

F1 – VTSAX

F2 – VFIAX

B1 – VBTLX

S1 – MSFT

S2 – APPL

Given Investments Annual Rate of Return:

F1R = 0.147

F2R = 0.148

B1R =0.077

S1R =0.290

S2R =0.282

Maximize (F1R)(F1) + (F2R)(F2) + (B1R)(B1) + (S1R)(S1) + (S2R)(S2) – Total Annual Return

s.t.

B1 <= 0.1(F1 + F2 + B1 + S1 + S2) – Bond Mutual Fund shouldn’t exceed 10% of all investments

(S1 + S2) <= 0.2(F1 + F2 + B1 + S1 + S2) – Stocks shouldn’t exceed 20% of all investments

S2 >= 0.6(S1 + S2) – Apple stock should be at least 60% of all stock investments

Given the maximized total return : 0.1755

Build an excel model that includes these categories and add a sensitivity analysis and work to complicate the models with more constraints and more variables

– Sensitivity analysis – how robust is your solution to changes in the objective function coefficients and (especially) to changes to the right-hand sides of the constraints (i.e., what if your risk tolerance or return requirement go up or down)?

– incorporate a numerical value for the risk level of each investment. include overall model risk in your objective function or constraints. have a constraint requiring that the overall portfolio risk be below some level. determine the optimal portfolios different levels of risk tolerance,

– can you control the model to keep the overall risk below some threshold. How does the solution change if the risk level changes?

– turn this into a multi-period problem at the portfolio composition at the end of each quarter and re-optimize.

 
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  1. Company A has a policy requiring respect in the workplace and preventing workplace violence. Violations can lead to discipline, up to and including immediate termination. Adam has provided medical paperwork indicating that he suffers from a disabling mental condition that includes anger management issues that can be successfully addressed with a break accommodation.

At work, he and another employee get into a physical altercation. Both Adam and the other employee have to go to the hospital to treat their injuries.

  • Does the ADA automatically protect Adam from discipline? Why or why not?
  • Assume that Adam is terminated because of the altercation but the other employee is not. What effect would that have on Company A’s risk if Adam sued Company A for discrimination? (What additional facts would you want to know?)
 
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1. For this assignment, I want you to identify a news event that illustrates the relevance of public administration in your life. In identifying this news event, you should also:

  • Identify the topic at the center of the event;
  • Identify what is at issue in government’s effort to resolve this event;
  • Identify the likely cause that prompted this event;
  • Provide a brief summary of possible solutions to this event, and how this event reflects upon the tradition of public administration in the United States.

2. In addition to your response to my questions, you should also include:

  • A link to a legitimate news source detailing this event.
  • A summary of the news event (no more than 4 paragraphs, but no less 2 paragraphs ).
 
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