1.An entrepreneur has contracted you to consult on starting a new professional eSports league. The investor wants to know about (a) the best finance methods and (b) the best franchise and league ownership models.

a.Recommend two financing methods that are best suited to the entrepreneur's enterprise including a discussion of the merits and negatives of each. (4 points)

b.Recommend an ideal ownership structure for the league and franchises in the league. Included in your recommendation an explanation of why this is the best structure and any potential problems with the structure, if there are any. (4 points)

2.You work for a Major League Baseball team's development system. You and your colleagues are trying to decide between promoting two pitchers in the minor league system. Your organization drafted Pitcher A at the 20^th overall pick and invested $3,120,000 as a signing bonus plus training, salary, and time totaling another $130,0000. They drafted Pitcher B as the 632^nd and invested $80,000 in signing bonus and $100,000 in training, salary, and time. Both pitchers fill the same role in the team. The player development team is split about which pitcher to promote. Some believe Pitcher B should be promoted because he has higher predicted performance based on his development so far. However, others believe that Pitcher A should be promoted since the organization has invested so much in him already, and he was the best athlete with the most potential when he was drafted. They point out that if he is given the opportunity to play at higher levels, he might reach his potential as one of the best players ever.

a.What decision making principles would you use to make this decision? Explain how they apply to the situation. (4 points)

b.What data do you need to decide and to convince your colleagues? Explain why the data is needed. (3 points)

c.Are there any preferences that should be accounted for in this situation? Why? (1 point)

4.What will happen to the price and quantity of wooden baseball bats if the NCAA bans metal and composite bats making wooden baseball bats the only bats that can be used in college baseball? You must draw a graph in your answer. (4 points)

5.You have been hired to evaluate two prospective markets for a new minor league baseball team in Texas. Lubbock and Amarillo are both in West Texas. The table below shares some general information about the cities.

Lubbock

Amarillo

Population

290,805

262,056

Companies with 500+ employees

18

22

Cumulative payroll of large companies

Not available

Not available

Median household income

$44,139

$47,053

Universities with athletic teams

Texas Tech

Football

Stadium capacity:60,454

Home games: 6

Suites: 76

Baseball

Stadium capacity:4,368

Home games: 28

Suites: 0

Basketball

Arena capacity: 15,000

Home games: 17

Suites: 24

West Texas A&M

Football

Stadium capacity: 20,000

Home games: 5

Suites: 0

Baseball

Stadium capacity: 6,100

Home games: 28

Suites: 0

Basketball

Arena capacity: 4,700

Home games: 12

Suites 0

Lubbock Christian University

Baseball

Stadium capacity:6,362

Home games: 28

Suites: 0

Basketball

Arena capacity: 1,950

Home games: 12

Suites: 0

Semi-professional teams

West Texas Roller Derby

Capacity: 2,000

Home games: 3

Suites: 0

Amarillo Bulls

Capacity: 2,848

Home games: 60

Suites: 0

Amarillo Venom

Capacity: 2,848

Home games: 7

Suites: 0

a.Calculate the per capita sales required to sell out in each city if the baseball team builds a stadium with 9,000 people capacity and plays 38 home games a year (4 points)

b.Calculate the firms per suite ration in each city if the new stadium includes 5 luxury suites. (4 points)

c.Which city would you recommend as the home for the minor league baseball team? Explain your answer in detail. Your answer must include relevant ratios, but you can make an argument for why the ratios need to be changed to include/exclude certain teams. You can also make the case for other factors you think are relevant. (4 points)

6.Explain why a team would charge a high price for tickets even though selling them cheaper would allow them to fill their stadium. You must draw a graph in your answer. (4 points)