Week 6:

1. Complete Problem 14.1 on page 269 of the course text (solution is on page 501-502). Next, work the problem again using the following variables: project yield annual net cash inflows are $10,500 for the next five years; interest rate of 16.5%, and the initial investment of $33,000. Calculate the net present value of the cash flows and the IRR for the project using the Excel spreadsheet formula. Explain the concept of Net Present Value.

2. Complete Problem 16.4 on page 308-309 of the course text (solution is on page 511-512—Table A2-29). Next work the problem again using the following variables: The selling price is expected to be £350 per tonne for the first three months and £360 per tonne thereafter. Variable costs per tonne are predicted as £100 in the first quarter, £120 in the second quarter, and £130 in the last two quarters; and salary and wages do not increase in the last two quarters. The rest of the assumptions are as listed on problem 16.4. What is the cumulative cash flow at the end of Quarter 4? Be prepared to paste your worksheet for this problem into the OAES.

3. Read the entire article "Framework for TQM to Achieve Business Excellence" and answer these questions:

1. List the 18 elements of TQM.

2. Identify the enabler area for each item on Figure 2, page 1218 of the article.

3. Using Table 3, describe the largest gap between theory and practice in the organizational systems area. What do you think about this gap?

4. Based on the study of 10 notable authors, what must be present so that TQM initiatives can be regarded as successful?

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