Excel problem

Your sister has just won $300,000 (tax-free) in the state lottery. She's decided to quit her job and devote herself to writing novels for the next ten years, using her lottery winnings to support herself. She figures that she will need $30,000 of income at the start of the coming year; $31,000 at the start of next year; $32,000 for the third year; and so on. In order to meet these expenses, she plans to invest her lottery winnings all at once, in bonds. If she finds that she has extra cash in any year (including the first), she plans to place it in her savings account, which pays 3 percent annual interest, but she does not want to purchase any additional bonds in the future.

At the start of the coming year, bonds with one-, three-, five-, and 10-year maturities will become available on the market. If a bond matures in k years, it pays $100 at the end of each of k years, as well $1,000 at the end of the kth year. Currently, one-year bond sells for $1,075, three-year bonds for $1,100, five-year bonds for $1,200, and 10-year bonds for $1,300. Your sister wants to make sure that the income from her investments will provide for her living expenses year by year. She has asked you to advise her on how many bonds to purchase and has offered to give you any funds left over at the end of the 10-year period.

a) Assume that you wish to maximize the amount of money available to you at the end of 10 years. How many of each type of bond should your sister purchase? (Assume that these bonds can be purchased in fractional amounts, as part of an investment pool.)

b) How much money will be available to you at the end of 10-years?

c) Suppose you investigate other savings bank and find that interest rates higher than 3 percent are available. What is the minimum interest rate that would alter which of the four types of bonds your sister should

,,From its creation in 2004, Facebook was a success story closely identified with one of its founders, Mark Zuckerberg, a star among the Silicon Valley entrepreneurs. His global ambitions for the social media platform, combined with WhatsApp, Instagram and Messenger, seemed destined to grow inexorably into a social media empire. Facebook's IPO in 2012 opened the way to expand globally. He was able to control the company through a share structure in which the voting system gave him control of the company. He attempted to restructure Facebook in 2017, retaining control even though reducing his shareholding. This was met with a lawsuit from shareholders, claiming the restructuring was unfair to them, and that the board had been in breach of their legal duty in approving it. Zuckerberg withdrew the plan, and investors could claim success. By that time, Zuckerberg had other problems on his mind.

Mr. Zuckerberg has long felt that the idea of sharing was central to Facebook. In 2010, he said that privacy was no longer a 'social norm' (Johnson, 2010). The indications were apparent then that Facebook would encounter difficulties with privacy regulators. It was clear then that Facebook's approach to users' data was that they could be used freely to generate revenues: this was its business model. Facebook gave developers of data apps access to data. A complaint to the Irish data protection authority by a law student, Max Schrems, in 2011, stated that Facebook had no control over what developers did with the data, or the data of a user's friends, even though they had not given consent. Facebook made changes to the platform in 2015, but data that had been harvested had already been incorporated in the system. By then, the wholesale harvesting of data was difficult to reverse.

In 2018, it was revealed that Cambridge Analytica, a data company that was taken on by the Trump campaign and by the Brexit Leave campaign, had obtained Facebook data on 50 million people, which it used to micro-target voters with political advertisements. That number was later revised upwards to 87 million. Facebook was called to appear before investigative committees of legislators in the UK and the EU, and to give testimony before Congress in the US. The answers by Mr. Zuckerberg and other executives contained apologies, but left legislators unconvinced when questions about the core business model were raised. When Mr. Zuckerberg was asked by a Congressman whether he was willing to change his business model to protect individual privacy, he replied, 'I'm not sure what that means' (Hern, 2018). The company's share price plummeted 20% in a few days in July 2018. Its number of users was up to 1.42 billion globally, but the number had stalled in the US and fallen in Europe, which are Facebook's biggest advertising markets. Costs were rising, as the company was compelled to deal with security matters, suspending hundreds of apps as a result of the Cambridge Analytica scandal. It was compelled to clamp down on political advertising, the spread of fake news and the spread of hate speech. Facebook apologized for its failure to act responsibly in dealing with third-party developers, and for its inadequate approach to privacy. However, it has become clear that Facebook's micro-targeting of users has been the attraction that it offers advertisers, and this has involved harvesting vast amounts of data. If regulators were to clamp down on these practices with stricter rules, it would be very costly for Facebook. Investors and users have cause to be concerned.

The EU's General Data Protection Regulation (GDPR) took effect in May 2018. It provides for users to opt in, rather than out, of some data sharing. This would impact on Facebook in the EU. Mr. Schrems, has already fi led four complaints under the GDPR. Companies in breach face fines of 4% of global revenue. For Facebook in 2017, that would have been $1.6 billion. Mr. Schrems complained of forced consent: the user had to consent or be denied access to services. In the US, Facebook has already launched products that breach GDPR rules. Facebook has become extraordinarily profitable through a business model based on data harvesting, which it acknowledged was irresponsible. It was a costly path to take, undermining public and investor confidence in the social media giant. Mr. Zuckerberg is now seeking to boost the profile of Instagram, which has proved very popular. In part, he is seeking to compensate for the woes of Facebook in public perceptions. Adding to the threats of escalating costs have been moves in a number of countries to force tech companies, which have been adept at tax avoidance arrangements, to pay more in taxes in the country jurisdictions where they operate.

The US regulator, the Federal Trade Commission (FTC) imposed a massive fi ne of $5 billion on Facebook in 2019, for privacy violations stemming from the Cambridge Analytica scandal. This was by far the largest fi ne ever imposed by the FTC. However, the FTC did not order the company to make any structural changes. As a result, many feared that Facebook was not likely to make the changes to its behaviour that would safeguard privacy in future (Davies and Rushe, 2019).

What are the risks for the company and its relations with shareholders in the climate of 'tech backlash' that many ordinary people feel?

What should Facebook be doing to win back confidence?