Samsung has added four new Galaxy smartphones to its existing line, designed to deliver an 'exceptional experience at an affordable price'. The new products are targeted at the low-price market segment of the smartphone market where Samsung really wants to grow its market share.

The Galaxy Core II, Galaxy Star $2$, Galaxy Ace $4$ and Galaxy Young $2$ all run Google's Android $4.4$ KitKat system and feature smaller displays and less-powerful processors than the flagship model, the Galaxy S$5$, but they still do a remarkable job and offer the consumer an exceptional experience for the price.

Last week Samsung also announced the specifically fitness-focused Galaxy S$5$ Sport, which will be both dust- and water-resistant. The product is an innovative response to the way smartphone owners use their phones when they are at the gym, out for a run and even cycling. The phones come with new fitness apps which allow you to do things like measure your performance on a running machine or map your ride when you are cycling.

Evaluate Samsung’s decision to target the ‘low-price’ market segment of the smartphone market.

Match the following common risks with the appropriate mitigation strategy:

________Country risks

________Regulatory risk

________Logistics failure

________Natural disaster

________Major quality failure

A. Detailed tracking, alternate suppliers

B. Careful selection and monitoring of suppliers

C. Contingency planning, insurance

D. Good legal advice, compliance

E. Currency hedging, local sourcing

Identify and explain the major managerial actions that are a part of managing the implementation of marketing strategies.

A U.S. manufacturing company operating a subsidiary in an LDC (less-developed country) shows the following results. Compute the multifactor productivity figures for labor and capital together. Do the results make more sense?

	U.S.	LDC
Sales (units)	100,000	20,000
Labor (hours)	20,000	15,000
Raw materials (currency)	$\$ 20,000$ (US)	$20,000(F C)$
Capital equipment (hours)	60,000	5,000

List two strategies for managing stress.

Two types of cars (Deluxe and Limited) were produced by a car manufacturer last year. Quantities sold, price per unit, and labor hours are given below. What is the labor productivity for each car? Explain the problem(s) associated with the labor productivity.

	QuANTITY	$/UNIT
Deluxe car	4,000 units sold	$\$8,000 / \mathrm{car}$
Limited car	6,000 units sold	$\$ 9,500 / \mathrm{car}$
Labor, Deluxe	20,000 hours	$\$ 12 /$ hour
Labor, Limited	30,000 hours	$\$ 14 /$ hour

Tesco Lotus $-$ the brand name used by the European supermarket in Thailand - had $15 \%$ of the supermarket grocery (food) market in $2013$. Total sales in this sector amounted to ${\pounds25}$ billion. Two French-owned companies operating in Thailand were second and third on the list of firms' market shares $-$ Big $\mathbf{C}$ had $7 \%$ and Carrefour $4 \%$. If non-food items are included then Tesco Lotus has $43 \%$ market share. Being market leader gives Tesco Lotus a huge advantage $-$ and it is not standing still. It has plans to both open new stores and enter new markets. Recently, Tesco Lotus entered the fast-growing school-uniform market, worth $\$140$ million a year, with prices $20-30\%$ lower than traditional shops.

This expansion is not without its critics and the new Thai government has taken action to protect locally owned shops and to ensure good consumer choice is maintained. A new law is proposed that would severely restrict the opening of all new foreign-owned stores. Consumer groups are split on the new law - they want to keep the variety offered by local stores, but they enjoy the big stores and low prices too.

Explain two advantages Tesco Lotus might gain from being 'market leader' in Thailand.

Details about a company's liabilities appear in a number of places in the annual report. Visit http://www.pearsonhighered.com/Horngren to view a link to Target Corporation's Annual Report. Use Target Corporation's fiscal 2015 financial statements to answer the following questions.

Requirements

1. Give the breakdown of Target's current liabilities at January 30, 2016.
2. Calculate Target's times-interest-earned ratio for the year ending January 30, 2016. How does Target's ratio compare to Kohl's Corporation's ratio?

The Corrigan Corporation’s 2015 and 2016 financial statements follow, along with some industry average ratios. a. Assess Corrigan’s liquidity position, and determine how it compares with peers and how the liquidity position has changed over time. b. Assess Corrigan’s asset management position, and determine how it compares with peers and how its asset management efficiency has changed over time. c. Assess Corrigan’s debt management position, and determine how it compares with peers and how its debt management has changed over time. d. Assess Corrigan’s profitability ratios, and determine how they compare with peers and how its profitability position has changed over time. e. Assess Corrigan’s market value ratios, and determine how its valuation compares with peers and how it has changed over time. f. Calculate Corrigan’s ROE as well as the industry average ROE, using the DuPont equation. From this analysis, how does Corrigan’s financial position compare with the industry average numbers? g. What do you think would happen to its ratios if the company initiated cost-cutting measures that allowed it to hold lower levels of inventory and substantially decreased the cost of goods sold? No calculations are necessary. Think about which ratios would be affected by changes in these two accounts. $$ \begin{matrix} \text{Corrigan Corporation: Balance Sheets as of December 31}\\ \text{ } & \text{2016} & \text{2015}\\ \text{Cash } & \text{\$72.000} & \text{\$ 65.000}\\ \text{Accounts receivable} & \text{439.000} & \text{328.000}\\ \text{Inventories} & \text{894.000} & \text{813.000}\\ \text{Total current assets} & \text{\$ 1.405.000} & \text{\$ 1.206.000}\\ \text{Land and Building } & \text{238.000} & \text{271.000}\\ \text{Machinery} & \text{132.000} & \text{133.000}\\ \text{Other fixed assets} & \text{61.000} & \text{57.000}\\ \text{Total assets} & \text{\$ 1.836.000} & \text{\$ 1.667.000}\\ \text{Accounts payable} & \text{\$80.000} & \text{\$ 72.708}\\ \text{Accrued liabilities} & \text{45.010} & \text{40.880}\\ \text{Notes payable} & \text{476.990} & \text{547.912}\\ \text{Total current liabilities} & \text{\$ 602.000} & \text{\$ 571.500}\\ \text{Long-term debt} & \text{404.290} & \text{258.898}\\ \text{Common stock} & \text{575.00} & \text{575.000}\\ \text{Retained earnings} & \text{254.710} & \text{261.602}\\ \text{Total liabilities and equity} & \text{\$ 1.836.000} & \text{\$ 1.667.000}\\ \end{matrix} $$ $$ \begin{matrix} \text{Corrigan Corporation: Income Statements for Years Ending December 31}\\ \text{ } & \text{2016} & \text{2015}\\ \text{Sales} & \text{\$ 4.240.000} & \text{\$ 3.635.000}\\ \text{Cost of goods sold} & \text{3.680.000} & \text{2.980.000}\\ \text{Gross operating profit} & \text{\$ 560.000} & \text{\$ 655.000}\\ \text{General administrative and selling expenses} & \text{303.320} & \text{297.550}\\ \text{Depreciation} & \text{159.000} & \text{154.500}\\ \text{EBIT} & \text{\$ 97.680} & \text{\$ 202.950}\\ \text{Interest} & \text{67.000} & \text{43.000}\\ \text{Earnings before taxes (EBT)} & \text{\$30.680} & \text{\$ 159.950}\\ \text{Taxes (40\\%)} & \text{12.272} & \text{63.980}\\ \text{Net income} & \text{\$ 18.408} & \text{\$ 95.970}\\ \end{matrix} $$ $$ \begin{matrix} \text{Per-Share Data}\\ \text{ } & \text{2016} & \text{2015}\\ \text{EPS} & \text{\$ 0.80} & \text{\$ 4.17}\\ \text{Cash dividends} & \text{\$ 1.10} & \text{\$ 0.95}\\ \text{Market price (average)} & \text{\$ 12.34} & \text{\$ 23.57}\\ \text{P/E ratio} & \text{15.42 }{\times} & \text{5.65 }{\times}\\ \text{Number of shares outstanding} & \text{23.000} & \text{23.000}\\ \end{matrix} $$ $$ \begin{matrix} \text{Industry Financial Ratios} & \text{ }\\ \text{Current ratio} & \text{2.7 }{\times}\\ \text{Inventory turnover} & \text{7.0 }{\times}\\ \text{Days sales outstanding} & \text{32.0 days}\\ \text{Fixed assets turnover} & \text{13.0 }{\times}\\ \text{Total assets turnover} & \text{2.6 }{\times}\\ \text{Return on assets} & \text{9.1\\%}\\ \text{Return on equity} & \text{18.2\\%}\\ \text{Return on invested capital} & \text{14.5\\%}\\ \text{Profit margin} & \text{3.5\\%}\\ \text{Debt-to-capital ratio} & \text{50.0\\%}\\ \text{P/E ratio} & \text{6.0 }{\times}\\ \end{matrix} $$

Use the Target Corporation financial statements to answer the following questions. Visit http://www.pearsonhighered.com/Horngren to view a link to Target Corporation's Fiscal 2015 Annual Report.

Requirements

1. How much was Target Corporation's long-term debt at January 30, 2016?
2. Compute Target Corporation's debt-to-equity ratio at January 30, 2016. How does it compare to Kohl's Corporation's ratio?

For 2015, Pac Co. estimated its two-year equipment warranty costs based on $100 per unit sold in 2015. Experience during 2016 indicated that the estimate should have been based on$110 per unit. The effect of this $10 difference from the estimate is reported a. in 2016 income from continuing operations. b. as an accounting change, net of tax, below 2016 income from continuing operations. c. as an accounting change requiring 2015 financial statements to be restated. d. as a correction of an error requiring 2015 financial statements to be restated.

Which of the following actions are most likely to directly increase cash as shown on a firm's balance sheet? Explain and state the assumptions that underlie your answer.

a. It issues 4 million dollars of new common stock.

b. It buys new plant and equipment at a cost of 3 million dollars.

c. It reports a large loss for the year.

d. It increases the dividends paid on its common stock.

Which of the following actions are most likely to directly increase cash as shown on a firm’s balance sheet? Explain and state the assumptions that underlie your answer. a. It issues $4 million of new common stock. b. It buys new plant and equipment at a cost of$3 million. c. It reports a large loss for the year. d. It increases the dividends paid on its common stock.

Which of the following actions are most likely to directly increase cash as shown on a firm's balance sheet? Explain and state the assumptions that underlie your answer.

a. It issues $\$ 2$ million of new common stock.

b. It buys new plant and equipment at a cost of $\$ 3$ million.

c. It reports a large loss for the year.

d. It increases the dividends paid on its common stock.