Help! Please no links! Task 1: The Problem
Read the following email:

Dear Dr. Jones,

Our pharmaceutical company now received 47 complaints about the new pain reliever NoPain, created in your lab. Of the 47 complaints, 24 said their headache got worse, 15 said they had severe cramping after taking the medication, and 8 said they had both problems. We have only been distributing this pain reliever for about 30 days and we are very concerned. It has cost our company roughly 1.2 million dollars to create the drug and we have recorded sales of $98,600 in the past month at $10 a bottle, so that is 9,860 bottles. Should we be concerned? Do you think we should pull the product and conduct more research? We may end up losing money on this if we pursue this course of action. Should we keep the product on the shelves and secretly do more research? Or should we just do nothing for the time being, wait it out, and see what happens? Please get back to us as soon as possible with your recommendation.

Thank you,

Jane Smith
Head of Customer Relations

Using your basic mathematical skills, calculate how long it will take the pharmaceutical company to earn back the amount that it had invested, if it continues to sell the product at the current selling rate.

Discuss how the resource-based view (rbv) of the firm combines the two perspectives of (1) an internal analysis of a firm and (2) an external analysis of its industry and its competitive environment. include comments on the different types of firm resources and how these resources can be used by a firm to build sustainable competitive advantages.

Shrieves casting company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by sidney johnson, a recently graduated mba. the production line would be set up in unused space in the main plant. the machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. the machinery has an economic life of 4 years, and shrieves has obtained a special tax ruling that places the equipment in the macrs 3-year class. the machinery is expected to have a salvage value of $25,000 after 4 years of use. the new line would generate incremental sales of 1,250 units per year for 4 years at an incremental cost of $100 per unit in the first year, excluding depreciation. each unit can be sold for $200 in the first year. the sales price and cost are both expected to increase by 3% per year due to inflation. further, to handle the new line, the firm’s net working capital would have to increase by an amount equal to 12% of sales revenues. the firm’s tax rate is 40%, and its overall weighted average cost of capital, which is the risk-adjusted cost of capital for an average project (r), is 10%. define “incremental cash flow.” (1) should you subtract interest expense or dividends when calculating project cash flow?

Advertisers are usually very conscious of their audience. choose an issue of a popular magazine such as time, sports illustrated, vanity fair, rolling stone, or the like. from that issue select three advertisements to analyze. try to determine the audience being appealed to in each advertisement and analyze the appeals used to persuade buyers. how might the appeals differ is the ads were designed to persuade a different audience.