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Evaluate each of the following approaches that a business firm could use to gather information about competition, For each approach, mark your feeling about its approprateness using the following scale;

1. definitely not appropriate, 2. probably not appropriate 3. undecided, 4. probably appropriate, and 5. definitely appropriate

_____ Careful study of trade journals

_____Wiretappong the telephones of competitors

_____Posting as a potential customer to competitors

_____getting loyal customers to put out a phone “request for proposal” soliciting competitor’s bids.

_____Buying competitors’ products and taking them apart

_____Hiring management consultants who have worked for competitors

____Rewarding competitors’ employees for useful “tips”

____Questioning competitors’ customers and/or suppliers

____Buying and analyzing competitor’ garbage

____Advertising and interviewing for nonexistent jobs

____taking public tours of competitors’ facilities

____Releasing false information about the company in order to confuse competitors

____Qeustioning competitors/ technical people at trade shows and conferences

____Hiring key people away from competitors

____Analyzing competitors’ labor union contacts

___Having employees date persons who work for competitors

___Studying aerial photographs of competitors’ facilities.

After making each of th preceding approaches, indicate on the discussion board for 5, 4, 2, or 1, why you thought these acts were either appropriate or inappropriate.

The Drosselmeier Corporation, located in munich, makes Christmas nutcrackers and has an annual plant capacity of 2,400 product units. Its predicted operating results (in German marks) for the year are :
Production and sales of 2,000 units, total sales DM 180,000
Manufacturing Costs
Fixed (total) 60,000
Variable (per unit) 26
Selling and administrative expenses
Fixed (total) 30,000
Variable (per unit) 10

Compute the following, ignoring income taxes:

1. For the special order of 300 units, compute new net income…you can state your assumptions about what costs are relevant and irrelevant. There is no one right set of assumptions.

2. Now Drosselmeier wants a target net income of 45,000 DM. It wants to understand how and if it can achieve it. For each method, compute the 1)number of units it must sell, 2) independently, how it might reduce costs – variable and fixed, 3) how are these costs best communicated to production so cost savings can be realized, and 4) a different selling price. Then discuss the limitations…do not limit the computations for what you think.

3. Assume capacity and sales can be doubled to 4,800 units. Again compute new net income if facilities costing 500,000DM are added at 5 year life. This is a straight forward computation.

Details: The proprietors of two businesses, L.L. Sams Company and Melinda Garcia Career Services, have sought business loans from you. To decide whether to make the loans, you have requested their balance sheets. Solely on the basis of these balance sheets, to which entity would you be more comfortable lending money? Explain fully, citing specific items such as the accounting equation and amounts from the balance sheets. In addition to balance sheet data, what other information would you require?