1. Tech, Inc., sells its brand-name computer equipment directly to its franchised retailers. Depending on how existing franchisees do, Tech may limit the number of franchisees in a given area to reduce intrabrand competition. Tech’s restriction on the number of dealers likely is
A) a per se violation of the Sherman Act.
B) exempt from the antitrust laws.
C) subject to continuing review by the appropriate federal agency.
D) subject to the rule of reason.

2. Francis owns a small motel in Sugarloaf Key. She notices by means of public advertising that her competitors in Big Pine Key and Ramrod Key have extended by two weeks their “winter season” and thus their winter season higher rates. Francis also notices the “no vacancy” signs at her competitors’ motels. So, Francis decides to extend the winter season at her motel too. Francis has engaged:
A) Illegal horizontal price-fixing by means of an express agreement.
B) Illegal horizontal price-fixing by means of an implied agreement
C) Legal action by means of the doctrine of Conscious Parallelism
D) Legal action since anti-trust law does not apply to small motels, only large ones and hotels.

3. General Construction contracts to build a store for Home Stores for $1 million. In mid-project, Home repudiates the contract, and General stops working. General incurred costs of $600,000 and would have made a profit of $100,000. General’s measure of damages likely is
A) $1 million.
B) $700,000.
C) $100,000.
D) nothing.

4. The four shareholders of Delta, Inc., want to prevent each other from selling the shares to third parties without first being given the opportunity to buy them. The shareholders can provide for this in
A) a buy-sell agreement that includes a “take-along” clause.
B) a buy-sell agreement that includes a right of first refusal.
C) a key-person clause that specifies who can sell what to whom.
D) none of the above.

Part 3 5. (TCO H) Your management team identifies a security software firm, DigiVault, that has developed a 256-bit data encryption key that is licensed by Fortune 100 companies and governments to protect sensitive database information from prying eyes. The firm’s founders are out of money and want to sell their technology. Because you and your team don’t have enough money to acquire the firm outright on your own, you turn to outside sources of funding. A venture bank is willing to put up a $3.5 million, five-year loan at 11% per year, which only has interest payments due during its life; the principal balance will be paid off at the liquidity event. Your team puts up $750,000 of its own capital. One of your friends from the MBA program is

a venture capitalist, and his firm agrees to invest $3.5 million at an expected 60% annual return for five years, at which time they expect a liquidity event in order to obtain their money and the return back. Include all your calculations to support each answer in order to earn full credit. Answers must be completed in sequence. Required:

(a) Assume that in five years, DigiVault will have an expected exit enterprise value of $48 million, based on an EBITDA multiple of 5.0 from similar exit transactions. What does this indicate the firm’s expected EBITDA will be at that time?

(b) Given the future value calculated in (a), what will be the equity value at that time?

(c) Because the VC firm expects a 60% compound return on its investment, what would be the dollar value of its portion of the equity value you calculated in (b)?

(d) Based on your answer in (c), what would be the amount of the equity up front that you would have to give up in order to obtain DigiVault’s original venture capital investment?

(e) What will be the dollar value of the management team’s original $750,000 equity investment at the time of the liquidity event? (Points : 50)

1. (TCO7) Desiree is reluctant to take a promotion because it involves moving. She knows little about the area she would be living in. According to the text, the most likely reason for such employee resistance to change is (Points : 2) 
uncertainty.
threatened self-interests.
different perceptions.
feelings of loss.
facilitation.
2. (TCO8) Ana is a police detective in a metropolitan police force. She believes that she is just as good a detective as her male counterparts. Because she is female, many of her counterparts assume that she will type up their reports as well as her own. She has been doing this typing for a while and is increasingly feeling under rewarded for her efforts. In terms of ____, she will more than likely decrease her inputs by refusing to do typing for other detectives. (Points : 2) 
the expectancy theory
the hierarchy of needs
Herzberg’s theory
the equity theory
the human relations approach to motivation
3. (TCO8) Chris Childers opened Macon Christian Bookstore in the 1980s. He quickly found that he needed help running the operation, so he hired his parents, his brother, and his girlfriend. Childers was pleased when his mother suggested having a section of the store devoted to decorative items. He encouraged his brother’s idea about selling choir robes. He treats his employees like equals, asks their advice, and often implements their suggestions. According to the path-goal theory, Childers is a(n) ____ leader. (Points : 2) 
directive
supportive
participative
achievement-oriented
relationship-oriented
4. (TCO9) You are a manager who has been assigned to a work team that is composed of various functional managers. Which of the following forms of communication would your work team tend to use? 
Horizontal communication
Professional jargon
Downward communication
Effective communication
A managerial grapevine

7)Due to the population change, the Goose Creek School District has decided to close one of its high schools. Since it has no further need of the property, the school is listed for sale. The two bids it receives are as follows:
united Methodist Church $1,700,000
Planet GMC Motors$1,600,000 
The United Methodist Church would use the property to establish a sectarian middle school. Planet, a well-known car dealership, would revamp the property and operate it as a branch location.
If you were a member of the school district board, what factors would you consider in evaluating the two bids?

8)Chris spends $800,000 to build a qualified low-income housing project, which is placed in service on January 1, 2012. He financed the project using his personal funds. What is the amount of the low-income housing credit that Chris may claim in 2012 (assuming a rate of 7.96%)? What is the total amount of the credit that Chris may claim as a result of the $800,000 expenditure?

9)Margaret is trying to decide whether or not to place funds in a qualified tuition program. Her son will be attending college in 4 years. She is in the 35% marginal tax bracket and she believes she can earn 7% before tax return on alternative investments. Thus $10,000 will accumulate to $11,948 (after-tax) in 4 years. Margaret expects tuition to increase at the rate of 5% each year to $12,155 in 4 years. Her son will be in the 15% marginal tax bracket in all relevant years. Given these assumptions, should Margaret participate in the qualified tuition program?

11)Shaquille operates a drug-running operation and incurred the following expenses:
Salaries $200,000
Illegal kickbacks $32,000
Bribes to border guards $24,000
Cost of goods sold $300,000
Rent $12,000
Interest $18,000

1. Brenda wrote a check to KelliHGY for $50, to be drawn from her account at Beverly Bank. Beverly Bank refused to cash the check. Which one of the following correctly states Brenda’s liability in this situation? 

A. Brenda is secondarily liable if she is given timely notice of the dishonor. 

B. Brenda is primarily liable if she is given timely notice of the dishonor. 

C. Brenda is secondarily liable regardless of any notice of the dishonor. 

D. Brenda is primarily liable regardless of any notice of the dishonor. 

2. Jayla and Jamal enter an agreement in which Jamal agrees to pay Jayla $500 over the next 3 months for a new stereo. Jamal calls Jayla on the phone and promises to pay her the entire $500 no later than 90 days from that date. This agreement fails to constitute a negotiable instrument, because negotiable instruments must 

A. be payable on demand or at a definite time. 

B. state an unconditional promise or order to pay. 

C. state a fixed amount of money. 

D. be in writing. 

3. Liza purchased a car from Chad, and signed a promissory note in Chad’s favor promising to pay $1,000 for the car within 1 year. Despite Chad’s written and oral promises about the car’s condition. Liza had to have the car in the shop for repairs the entire first year. Liza refused to pay the balance due under the promissory note. Which one of the following is Liza’s best defense to avoid liability? 

A. Illegality 

B. Fraud in the inducement 

C. Breach of warranty

D. Fraud in the execution 

4. Lee offered Beth a promissory note signed by Joe in favor of Lee paying $10,000 in 6 months, in exchange for $1,000 cash. Beth readily accepted the deal. Beth may not be classified as a holder in due course because Beth 

A. did not give value for the note. 

B. did not take the note in good faith. 

C. may have had notice of a defense against the note. 

D. may have had notice that the note would be dishonored.