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The asset beta of the firm can be calculated with the use of following formula:

Equity Beta = Asset Beta*(1+ Value of Debt/ Value of Equity)

Substituting the values provided in the question in the above formula, we get,

2 = Asset Beta*(1+100/100)

Rearranging Values, we get,

Asset Beta = 2/(1+1) = 1

_____

Part b)

Step 1: Calculate Asset Beta of Division 1

The asset beta of division 1 can be calculated with the use of following equation:

Equity Beta = Asset Beta + Debt Equity Ratio*(Asset Beta - Debt Beta)

Substituting the values provided in the question in the above formula, we get,

1 = Asset Beta + .5*(Asset Beta - .1)

Rearranging Values, we get,

Asset Beta of Division 1 = 1.05/1.5 = .70

____

Step 2: Calculate Expected Return for Division 1

The expected return for division 1 is determined as below:

Expected Return = Risk Free Rate + Beta*(Market Risk Premium) = 2% + .7*8% = 7.6%

____

Step 3: Calculate Value of Division 1 and Division 2

The value of division 1 and division 2 is calculated as follows:

Value of Division 1 = Total Cash Flow/Expected Return = 10/7.6% = $131.58 million

Value of Division 2 = Total Value of the Firm - Value of Division 1 = 200 - 131.58 = $68.42 million

_____

Part c)

Step 1: Calculate Asset Beta for Division 2

The asset beta for division 2 can be derived with the use of following formula:

Total Asset Beta = (Value of Divison 1/Total Value of the Firm)*Asset Beta of Division 1 +(Value of Divison 2/Total Value of the Firm)*Asset Beta of Division 2

Substituting values in above formula, we get

1 = (131.58/200)*.7 + (68.42/200)*Asset Beta of Division 2

Rearranging Values, we get,

Asset Beta of Division 2 = 1.58

____

Step 2: Calculate Expected Return from Project (New Technology)

The expected return for from project is determined as below:

Expected Return = Risk Free Rate + Beta*(Market Risk Premium) = 2% + 1.58*8% = 14.64%

____

Step 3: Calculate Present Value of Cash Inflows from Project

The value of project is calculated as follows:

Present Value of Cash Inflows from Project = Total Cash Flow/Expected Return = 4/14.64% = $27.32 million

As the present value of cash inflows from project (27.32 million) is higher than the value of investment required (15 million), the firm should invest in the new technology.

_____

Part d)

The price per share will continue to be $10 as addition of equity will not result in any change in the value of equity. The price per share is calculated as follows:

Price Per Share = Value of Equity/Number of Outstanding Shares = 100/10 = $10

[15/05, 09:58] Tutor: You have recently been hired as the fitness director at a midsize (~35,000 ft2) health and fitness facility. The grand opening for the facility is scheduled in 1 month from today. The general manager has asked you to hire all the positions necessary for the operation of a successful and profitable fitness department. As fitness director, you will be the direct supervisor for all of the employees you hire and will be responsible for their payroll, schedules, and productivity. In addition, you have been asked to set the fitness evaluation policies and procedures for your employees to follow.

Which position will you most likely compensate with commission rather than hourly wage? (0.25 point)

massage therapists

personal trainers

weight floor personal

a and b only

all of the above

Rather than hiring a number of part-time staff for weight floor supervision, you have elected to hire two full-time staff. How many hours of overtime must you pay an employee who work 52 h during a given week? (0.25 point)

12

17

22

0

How will you decide the pay rate for various positions you are hiring? (0.25 point)

arbitrarily

based on what you were paid when you had the position

perform job pricing analysis

based on national/state normative statistics

c and d are correct

Why would you decide to institute performance based pay for a given position? (0.25 point)

decreased employee morale

increased employee turnover

decreased employee retention

increased employee productivity

Which of the following should be included as part of the fitness testing program? (0.25 point)

informed consent

pertest evaluation

flexibility assessment

all of the above

Which of the following strategies would result in the most organized fitness testing program? (0.25 point)

memorize the protocol and perform all fitness testing personally

assign your most talented personal trainer the task of fitness testing for all members

Make handbook outlining testing protocols and train your staff accordingly

memorize body composition analyses because that's the most important fitness test to the member

Which strategy would be the best way to ensure fitness testing confidentiality while maintaining accurate recordkeeping? (0.25 point)

Make hardcopy of fitness test results and place it in a file cabinet in the fitness testing room

Make an electronic file of fitness test results and save the file on a password-protected computer

hand the member a copy of his or her results and keep no other records of the test

share results verbally with the member, then, destroy the hard copy of results

Which of the following is NOT a pretest instruction you would provide to the client? (0.25 point)

wear comfortable, loose-fitting clothing

avoid strenuous physical activity the day of the assessment

avoid caffeine the day of the assessment

avoid hydration the day of the assessment

Which of the following is one of your primary goals for the fitness assessment program? (0.25 point)

present a professional image of the organization

provide member with fitness evaluation against normative data

establish a friendly relationship, thereby enhancing retention

all of the above

What is the primary advantage to hiring personal trainers as independent contractors versus employees? (0.25 point)

reduced tax liability for the club

increased professionalism in the fitness department

independent contractors are usually better trainers

better long-term retention of training staff

You are the fitness director and group exercise coordinator for a large, successful multipurpose health/fitness center that has recently purchased another local fitness center that declared bankruptcy a few months ago. The newly acquired club has 1,100 active memberships, and it is your understanding that the facility has the capacity to handle 2,800-3,000 memberships.

The newly acquired club is a 35,000 ft2 fitness-only facility. Your company is planning a gradual renovation of the acquired club while keeping the facility operational. The overall condition of the facility is good and the activity areas and equipment are up-to-date and fully functional. The facility is located in a middle-class residential neighborhood with a median household annual income of $57,000. Other health/fitness businesses in the local area include a 25-yr-old YMCA (average monthly dues rate of $55) and three newer 24/7 gyms (average monthly dues rate of $29).

You have been assigned the task of revitalizing the group exercise program of the newly acquired club. The previous group exercise program consisted of a basic step aerobics, kick-boxing, body sculpting, and a circuit training class using a 10-piece selected weight machine circuit. Due to staffing cutbacks, the previous management discontinued group exercise classes on Friday, Saturday, and Sunday, and there are currently 22 classes per week. The group exercise studio is specious and is in good shape. The renovation will include upgrading the studio's sound system and installing a new state-of-the-art studio floor surface.

An important part of the task is putting together a staff for the new group exercise program, including the hiring of a group exercise coordinator for the new club.

You have received approval to offer 60 classes per week and you plan to use a mix of current instructors from your club as well as new hires. A recent analysis of your facility's group exercise staff indicates the average per-class pay rate is $23. Annual performance evaluations performed for all instructors, and you strictly adhere to a 3% merit raise policy. You have been asked by the company controller to submit a pro forma projection for annual group exercise instructor wages. Given the information earlier, what is the most accurate payroll expense projection for the first 12 months of operation for the group exercise program at the new club? (0.5 point)

$26, 312 c. $71,760

$27,101 d. $73,913

$84,920

Hearing protection safety is an important topic when training new group exercise instructors. Part of your New Instructor Orientation program for the newly acquired club should list which maximum class decibel level? (0.5 point)

75 dB

90 dB

105 dB

sound level should be determined by the group exercise instructor depending on the demographic makeup of each class

none of the above

The group exercise studio will be one of most highly used spaces in the newly acquired facility. The new group exercise program will include boot camp class, low-impact aerobics, yoga classes, body sculpting, and sports performance classes. Selected ancillary equipment may include which of the following? (0.5 point)

step benches

spin class cycles

medicine balls

strength bands

all of the above

You will be hiring a full-time group exercise coordinator to supervise the group exercise program at the new facility. According to ACSM's Guidelines, what is the recommended formal education for a group exercise coordinator in the health/fitness industry? (0.5 point)

high school diploma or general education development (GED) equivalent

2 yr post-high school education in fitness, health, recreation, or related field from an accredited college or university

4-yr degree in fitness, exercise, or related field

no formal education is recommended for the position, only a professional certification combined with at least 3 yr of experience as a group exercise instructor

Your company follows a strict policy of "safety first" when it comes to member participation in programs. When selecting exercises appropriate for a group or individuals, which of the following are important considerations? (0.5 point)

selected exercises should be an effective way to increase flexibility, strength, coordination, balance, or cardiovascular endurance

demonstration of exercise modifications is necessary to accommodate all participants' skill level and abilities

exercises must be safe for the 25-45 yr-old age demographic because this group compromise the majority of most group exercise classes

a and b are corrected

You are responsible for instructing the new club's group exercise coordinator on how to perform employee performance evaluations. When it comes to performance evaluations, an important objective is: (0.5 point)

to look for opportunities to keep the meeting social in nature, allowing for a relaxed communication environment

to base most of your management feedback on what is planned and expected of the employee for the upcoming year

to bridge the gap between present and ideal performance

to compare an employee's performance to other employees performing the same job function

To assure success of the group exercise program at the new facility, it is important to be consistent with process evaluation of the program. Which of the following statement is true regarding program process evaluation? (0.5 point)

process evaluation assesses effectiveness by measuring whatever program goals and objectives have met

process evaluation can demonstrate whether procedures were followed and whether they were appropriate and effective

a cost-benefit analysis should be part of any program evaluation

the first step of a process evaluation is always reviewing the program goals and objectives

It is very important for the new club to retain as many existing members as possible. You need to solicit input and feedback from existing members regarding the quality of the existing group exercise program; what members like about the program, and what they don't like about the program. Methods for acquiring this type of information include: (0.5 point)

target market surveys

health screening and fitness assessment

participant surveys

health care usage report