Abitur Hessen Wirtschaftslehre 2021 · LK · bilingual Englisch

AiRobotics' new robotic lawnmower

AiRobotics plc is one of the leading robotic lawnmower companies which manufactures robot lawnmowers that help people to enjoy a beautifully trimmed garden in a more efficient and easier way. More than five million families around the world live more easily with the help of AiRobotics' products produced in Indianapolis, Indiana.

With AiRobotics plc competitive product range from the GripSpecial to the PowerAggregate mower series, the company has satisfied families with a neatly trimmed garden for more than 15 years.

AiRobotics plc is just about to develop a new robotic lawnmower which will be produced in a new line of production. Therefore, the management must decide between two investment objects.

1 AiRobotics plc is just about to develop a new robotic lawnmower which will be produced in a new line of production. Therefore, the management must decide between two investment objects.

1.1

Name and describe the five phases of an ideal-typical investment decision-making process in general.

(10 BE)

1.2

For the production of the new product line the procurement of a new machine is necessary. The company has already shortlisted a US-American semi-automatic machine produced in Lafayette, Indiana that has a useful life of six years. The initial acquisition costs including delivery and installation will be USD 66,000. AiRobotics plc desires a minimum rate of return of 7.5 % and wants to base its investment decision on a long-term analysis using the net present value and the internal rate of return methods. The estimated cash in- and outflows of the production line can be taken from Material 1.

Material 1: Estimated cash in- and outflow of new production line

Year

Cash outflow in USD

Cash inflow in USD

End of year 1 · 40,000 · 45,000

End of year 2 · 50,000 · 60,000

End of year 3 · 45,000 · 65,000

End of year 4 · 35,000 · 65,000

End of year 5 · 25,000 · 70,000

End of year 6 · 15,000 · 70,000

1.2.1

Calculate the net present values of the production line with the trial interest rates of $i_1 = 5\,\%$ and $i_2 = 10\,\%$.

(8 BE)

USD

USD

1.2.2

Calculate the internal rate of return of the investment object.

(4 BE)

%

1.2.3

Explain your results of 1.2.1 and 1.2.2 in detail. Assess the procurement of the machine considering two non-monetary aspects given in the task.

(8 BE)

AiRobotics' new robotic lawnmower

AiRobotics plc is one of the leading robotic lawnmower companies which manufactures robot lawnmowers that help people to enjoy a beautifully trimmed garden in a more efficient and easier way. More than five million families around the world live more easily with the help of AiRobotics' products produced in Indianapolis, Indiana.

With AiRobotics plc competitive product range from the GripSpecial to the PowerAggregate mower series, the company has satisfied families with a neatly trimmed garden for more than 15 years.

AiRobotics plc is just about to develop a new robotic lawnmower which will be produced in a new line of production. Therefore, the management must decide between two investment objects.

1.3 Because of the additional production of the new robotic lawnmower SuperSilent, the total capacity of 32270 hours per year might not be enough anymore. Use the data provided in Material 2 for your calculations.

Material 2: Cost and revenue data

Robotic lawnmowers

A - SuperSilent

B - Crawler

C - PowerBug

D - MassiveAttack

Planned production / sales amount in units

2,500

9,000

6,500

2,500

Sales revenue per unit in USD

1,850

550

1,500

2,450

Variable unit cost in USD

1,300

450

950

1,700

Direct fixed costs in USD

100

75

100

300

Production time per unit in hours

2.0

1.0

1.7

3.1

Total indirect fixed costs of the company in USD

2,900,000

1.3.1

Calculate the bottleneck and the contribution I and II per unit as well as the relative contribution for the planned production. [12 BE]

Product

A (SuperSilent)

B (Crawler)

C (PowerBug)

D (MassiveAttack)

DB I per unit (USD)

DB II per unit (USD)

Relative DB (USD/h)

1.3.2

On the basis of your results in 1.3.1, calculate the company's optimum production program and the operating result after the adjustment. [8 BE]

Optimized sales amount (units)

A (SuperSilent)

B (Crawler)

C (PowerBug)

D (MassiveAttack)

Adjusted quantity

1.3.3

Assess your results of 1.3.1 and 1.3.2 in detail. [6 BE]

2 The board of directors intends to extent the production to the sector of automatic vacuum cleaners and therefore considers the financing possibilities. The management plans to carry out an increase in share capital and is going to present the financing concept to the shareholders at the upcoming annual general meeting. The financial department calculated a need of about USD 20,000,000 for the new manufacturing facilities.

At the moment the company’s subscribed capital amounts to USD 190,400,000 and shall be increased by the needed amount for the new production facility. The current stock exchange price for one of the 1,400,000 old shares is USD 136 and the subscription price for the 200,000 new shares shall be USD 120.

2.1

Calculate the subscription ratio, the value of the subscription right (preemptive right), the average share price as well as the inflow of liquidity for the company.

(8 BE)

2.2

At the annual general meeting some of the old shareholders complain that due to the lower subscription price of the new shares, they will suffer a substantial dilution once the capital increase is carried out.

Show two possibilities how shareholders can respond to the dilution of their share capital 1. Calculate both possibilities that prevent the dilution of the share capital.

(8 BE)

1 dilution of share capital = Verwässerungseffekt

2.3

The investment had a very positive effect on the stock exchange price of AiRobotics plc. The value of the company’s shares has almost gained 30 % within the last two years.

Explain and interpret the positive effect mentioned above by referring to four external reasons. These reasons should not be directly connected with the company’s business.

(10 BE)

The new production facilities that were built by AiRobotics are located in Indianapolis, Indiana. The company AiRobotics enlarged the already existing production plant in this US state because the government has promoted new industrial investments with transformational expenditures altogether amounting to USD 39 billion last year. In total, autonomous investments were USD 44 billion and transfer payments were increased to USD 46 billion, as the autonomous consumption of the households amounted to USD 71 billion in Indiana. The marginal propensity to consume of the households amounted to 95 % of the available income. Last year, the government of Indiana has decided not to take out any loans and has financed all expenditures by tax income which have increased a lot. The complete tax income shall either be spent on transformational or transfer payments.

3.1

Determine the consumption function for the population of Indiana. [2 BE]

3.2

Calculate the basic income for the economic area of Indiana. [3 BE]

3.3

Indicate the formula for the equilibrium level of income in general and calculate it for the state of Indiana. [5 BE]

3.4

The US government plans to implement increases of transfer or transformational payments. They have not decided yet whether to finance these governmental spendings by tax increase or by taking new loans.

Compare and assess the effectiveness of transfer and transformational payments:

a) if they are tax-financed

b) if they are debt-financed. [8 BE]

IceBuster plc

Due to global climate change temperatures have risen steadily over time. As a result, the demand for making all kinds and forms of ice, such as ice cubes or ice cream, has increased over the years. The Australian company IceBuster plc located in Brisbane, Australia, specialises in the manufacture and distribution of a wide variety of ice making equipment, ice-maker machines and ice cream machines for ice cream parlors, shops, bars and restaurants worldwide.

A recent market research study has revealed that IceBuster plc has lost a tremendous part of its market share. Reasons are, among other things, that IceBuster plc often could not deliver on time because of capacity limits, frequent maintenance work and employee absenteeism.

The managers of IceBuster plc have decided to expand their production facilities and are considering the acquisition of new machinery from a British company. In the controlling department two investment alternatives are being discussed, machine type 1 and machine type 2 (Material 1).

1.1 The managers of IceBuster plc have decided to expand their production facilities and are considering the acquisition of new machinery from a British company. In the controlling department two investment alternatives are being discussed, machine type 1 and machine type 2 (Material 1).

Material 1

Machine Type 1

Machine Type 2

Acquisition Cost

£

2,600,000

3,480,000

Useful life

Years

10

12

Residual value

£

0

0

Utilization

units/year

34,000

42,000

Interest rate

%

6

6

Other fixed costs

£/year

18,000

18,000

Variable costs

£/unit

4.95

2.87

Sales price

£/unit

32

32

1.1.1

Using the cost and profit comparison method, calculate the yearly total costs and yearly total profit of the two alternative machines as well as the cost and profit per unit if all units produced can be sold. [6 BE]

Metric

Machine Type 1

Machine Type 2

Yearly total costs (£/year)

Costs per unit (£/unit)

Yearly total profit (£/year)

Profit per unit (£/unit)

1.1.2

Determine at which quantity the two machines have the same costs (critical output) mathematically and graphically (x-axis: 1cm is equivalent to 2,500 units, y-axis: 1cm is equivalent to £ 30,000). Also, calculate the break-even points of the two machines. [10 BE]

1.1.3

Explain your results in 1.1.1 and 1.1.2 and decide which alternative shall be chosen. [7 BE]

1.1.4

Describe two points of criticism of the cost and profit comparison method. Outline one alternative method of investment appraisal. [7 BE]

1.1.5

Examine three qualitative aspects that could have an influence on the company's investment decision. [6 BE]

IceBuster plc

Due to global climate change temperatures have risen steadily over time. As a result, the demand for making all kinds and forms of ice, such as ice cubes or ice cream, has increased over the years. The Australian company IceBuster plc located in Brisbane, Australia, specialises in the manufacture and distribution of a wide variety of ice making equipment, ice-maker machines and ice cream machines for ice cream parlors, shops, bars and restaurants worldwide.

A recent market research study has revealed that IceBuster plc has lost a tremendous part of its market share. Reasons are, among other things, that IceBuster plc often could not deliver on time because of capacity limits, frequent maintenance work and employee absenteeism.

The managers of IceBuster plc have decided to expand their production facilities and are considering the acquisition of new machinery from a British company. In the controlling department two investment alternatives are being discussed, machine type 1 and machine type 2 (Material 1).

1.2 The new investment needs to be financed either by debt capital or equity capital. At the moment, the management is discussing the pros and cons of these different types of financing.

1.2.1

Contrast these two sources of funds by four self-chosen criteria. [8 BE]

1.2.2

When employing debt capital, the financial accounting department of the company found that it could take advantage of the 'leverage effect': The company's return on total investment (ROI) would still be higher than its interest on borrowed capital. Explain this effect. [4 BE]

IceBuster plc

Due to global climate change temperatures have risen steadily over time. As a result, the demand for making all kinds and forms of ice, such as ice cubes or ice cream, has increased over the years. The Australian company IceBuster plc located in Brisbane, Australia, specialises in the manufacture and distribution of a wide variety of ice making equipment, ice-maker machines and ice cream machines for ice cream parlors, shops, bars and restaurants worldwide.

A recent market research study has revealed that IceBuster plc has lost a tremendous part of its market share. Reasons are, among other things, that IceBuster plc often could not deliver on time because of capacity limits, frequent maintenance work and employee absenteeism.

The managers of IceBuster plc have decided to expand their production facilities and are considering the acquisition of new machinery from a British company. In the controlling department two investment alternatives are being discussed, machine type 1 and machine type 2 (Material 1).

1.3 The acquisition of modern machinery impacts the production department of IceBuster plc in the way that work and production processes have to be changed to cut production time.

1.3.1

Establish two economically reasonable concepts of rationalization and optimization for each, the work and the production process. [6 BE]

1.3.2

In the course of rationalization and optimization it became evident that the storage costs of IceBuster plc exceed the average storage costs for the industry by almost 25 percent. Suggest four measures the company could take to reduce its storage costs. [6 BE]

1.4 The management of IceBuster plc is considering outsourcing its logistics department to improve the transportation and distribution of the company’s products.

1.4.1

Point out in how far 'outsourcing' differs from 'offshoring' and depict two advantages and two disadvantages of outsourcing for IceBuster plc. [8 BE]

1.4.2

In addition to outsourcing its logistics department, the company is also planning to offshore parts of its production facilities abroad. Identify two risks and two chances of that plan. [4 BE]

IceBuster plc

Due to global climate change temperatures have risen steadily over time. As a result, the demand for making all kinds and forms of ice, such as ice cubes or ice cream, has increased over the years. The Australian company IceBuster plc located in Brisbane, Australia, specialises in the manufacture and distribution of a wide variety of ice making equipment, ice-maker machines and ice cream machines for ice cream parlors, shops, bars and restaurants worldwide.

A recent market research study has revealed that IceBuster plc has lost a tremendous part of its market share. Reasons are, among other things, that IceBuster plc often could not deliver on time because of capacity limits, frequent maintenance work and employee absenteeism.

The managers of IceBuster plc have decided to expand their production facilities and are considering the acquisition of new machinery from a British company. In the controlling department two investment alternatives are being discussed, machine type 1 and machine type 2 (Material 1).

2 Investments in the Economy

Investments are of great importance for both, the investing company and the economy. A distinction is made between different types of investments in an economy.

2.1

Outline the basic type of investment made by IceBuster plc as described in assignment 1.1. Show the effects the investment activity has on the investing company as well as on the economy as a whole. [13 BE]

When the company IceBuster plc decided to invest, it based its decision on the changing capital market interest rate in Australia. In Material 2 the response of investment to the capital market interest rate, denoted as the investment function, is depicted. The straight line is just a simplified representation of the general relationship.

Material 2: Capital market interest rate and investment

2.2.1

Describe and interpret the graph. [5 BE]

2.2.2

A changing capital market interest rate is not the only factor influencing a company's marginal propensity to invest (MPI). Outline and explain four more factors. [10 BE]

Material 1

Rolls Royce Motor Cars Ltd. and the automotive industry in the United Kingdom

In January 2016 Rolls Royce Motor Cars Ltd. opened its new Technology and Logistics Centre (TLC) located close to its Goodwood plant which serves as headquarters, design, manufacturing and assembly center. The TLC provides logistics support to the manufacturing plant for current and future models. The company invested heavily to increase productivity and upgrade its facilities. This was to help prepare for the launch of future models, such as the Cullinan. Rolls Royce Motor Cars installed an inbound warehouse for production parts, a distribution center including an inbound body shop 3 and a finished car store. The TLC allows for further future expansions. A spokesman for Rolls Royce said that news of the investment was good for all the Rolls Royce workers, the UK automobile industry and the wider economy. It showed what could happen when industry and government worked together to build a better business environment. As part of its expansion, Rolls Royce created more than a hundred new jobs at its Goodwood plant and at its TLC. To create a lean production strategy, Rolls Royce streamlined its production methods, operations and processes. This enabled it to compete globally, retain quality and increase profit. For example, ‘just in time’ was introduced to improve efficiency, reshaping workshops 4 where many parts had been in stock. Workers could then call for additional spares when needed, rather than having parts on hand if required. To assist with the change to just in-time ordering and ensure that lean production ideas were implemented smoothly with suppliers and cut costs, the company introduced Customer Relationship Management (CRM) software.

The UK automobile industry has historically been a leader in the adoption of lean process techniques, but is now facing global consumer demand for greater personalization and shorter lead times combined with increased competition from low cost countries. Just like the global automobile industry, the UK automobile industry is about to implement ‘digitalization’, the application of digital technologies in the manufacturing sector. The CEO of the Goodwood plant uses digitalization to better plan plant maintenance using sensors on machinery to predict future usage, reduce unplanned machine downtime and reduce plant maintenance costs. Unlike Germany (Industrie 4.0), the USA and Japan, the UK lacks a fully coordinated, government-led digital strategy at present and suppliers have a far lower adoption of digital technologies than vehicle manufacturers. Consequently, the UK wants to place digitalization right at the heart of its government’s new industrial strategy to position itself as progressive, innovative and competitive on the global market.

adapted and abridged from: https://assets.kpmg/content/dam/kpmg/uk/pdf/2016/11/SMMT-KPMG-digitalisation-automotive-industry-report.pdf; https://en.wikipedia.org/wiki/Goodwood_plant (abgerufen am 4. Januar 2021).

3 body shop: Autokarosseriewerkstatt

4 workshops: Betriebswerkstätten

1 The government of the United Kingdom and the automobile industry have placed great emphasis on the digitalization of manufacturing. Rolls Royce Motor Cars Ltd. is among those car manufacturers which have streamlined their production and have recently started to digitalise parts of it to stay competitive in the global market.

1.1

By referring to Material 1, indicate the lean production strategy of Rolls Royce Motor Cars Ltd. and identify the goals achieved by the rationalization measures. [7 BE]

1.2

Name two further features of lean production and explain their impact on manufacturing in general. [6 BE]

1.3

Outline how digitalization in the production process of Rolls Royce Motor Cars Ltd.’s Goodwood plant is implemented and identify its advantages for the company by referring to Material 1. [4 BE]

1.4

In general, using digitalization in car manufacturing not only offers benefits but also poses challenges. Contrast benefits and challenges (four each) of digitalization in the car industry from the producers’ point of view. [8 BE]

1.5

Refer to Material 1 and evaluate the importance of continuous investment in new technology to Rolls Royce Motor Cars Ltd.. [6 BE]

1.6

In the department for special orders 4,000 units of customized head support covers were produced last year. The sales price of such a head support cover was £68. For this department, the annual total costs amounted to £258,000 and the average locked-up capital was £190,000. In the course of rationalization, the output quantity per year could be increased to 4,400 units in the following year. The department’s annual total costs increased by £17,000 and the average locked-up capital by £20,000. The sales price remained stable.

1.6.1

Calculate the annual profit and the average rate of return before and after the rationalization measures were implemented. [6 BE]

1.6.2

Explain the results in 1.6.1 in detail and assess if the rationalization measures were successful. [5 BE]

1.8

As original equipment manufacturer, Rolls Royce Motor Cars Ltd. is the head of its international supply chain. With one of its key suppliers, a large logistics and transportation company, it has agreed on an “open book” cost model. This means that the companies disclose their costs and can make purchasing decisions about resources and transport together.

1.8.1

Identify three advantages and three disadvantages that can arise from such a close collaboration as mentioned in 1.8. [6 BE]

1.8.2

As Rolls Royce Motor Cars Ltd. has extended its plant massively, additional needs are placed on business partners in its supply chain. Outline and illustrate three potential requirements these businesses must fulfil. [6 BE]

Material 1

Rolls Royce Motor Cars Ltd. and the automotive industry in the United Kingdom

In January 2016 Rolls Royce Motor Cars Ltd. opened its new Technology and Logistics Centre (TLC) located close to its Goodwood plant which serves as headquarters, design, manufacturing and assembly center. The TLC provides logistics support to the manufacturing plant for current and future models. The company invested heavily to increase productivity and upgrade its facilities. This was to help prepare for the launch of future models, such as the Cullinan. Rolls Royce Motor Cars installed an inbound warehouse for production parts, a distribution center including an inbound body shop 3 and a finished car store. The TLC allows for further future expansions. A spokesman for Rolls Royce said that news of the investment was good for all the Rolls Royce workers, the UK automobile industry and the wider economy. It showed what could happen when industry and government worked together to build a better business environment. As part of its expansion, Rolls Royce created more than a hundred new jobs at its Goodwood plant and at its TLC. To create a lean production strategy, Rolls Royce streamlined its production methods, operations and processes. This enabled it to compete globally, retain quality and increase profit. For example, ‘just in time’ was introduced to improve efficiency, reshaping workshops 4 where many parts had been in stock. Workers could then call for additional spares when needed, rather than having parts on hand if required. To assist with the change to just in-time ordering and ensure that lean production ideas were implemented smoothly with suppliers and cut costs, the company introduced Customer Relationship Management (CRM) software.

The UK automobile industry has historically been a leader in the adoption of lean process techniques, but is now facing global consumer demand for greater personalization and shorter lead times combined with increased competition from low cost countries. Just like the global automobile industry, the UK automobile industry is about to implement ‘digitalization’, the application of digital technologies in the manufacturing sector. The CEO of the Goodwood plant uses digitalization to better plan plant maintenance using sensors on machinery to predict future usage, reduce unplanned machine downtime and reduce plant maintenance costs. Unlike Germany (Industrie 4.0), the USA and Japan, the UK lacks a fully coordinated, government-led digital strategy at present and suppliers have a far lower adoption of digital technologies than vehicle manufacturers. Consequently, the UK wants to place digitalization right at the heart of its government’s new industrial strategy to position itself as progressive, innovative and competitive on the global market.

adapted and abridged from: https://assets.kpmg/content/dam/kpmg/uk/pdf/2016/11/SMMT-KPMG-digitalisation-automotive-industry-report.pdf; https://en.wikipedia.org/wiki/Goodwood_plant (abgerufen am 4. Januar 2021).

3 body shop: Autokarosseriewerkstatt

4 workshops: Betriebswerkstätten

1.7 To connect the supply chain, one of Rolls Royce Motor Cars Ltd.’s suppliers plans to adopt digitalization to improve data transfer. For this purpose, the supplier needs to acquire special software which costs £ 100,000. Of this sum, £ 60,000 can be financed by internal sources and the rest shall be financed externally. The supplier’s house bank offers long-term loans at an interest rate of 6% at 100% pay-out and a loan period of ten years. The supplier can choose between an instalment loan (ten equal instalments) and an annuity loan (ten equal annuities, annuity factor 0.135868 at 6% and 10 years).

1.7.1

Calculate the sum of the loan at the beginning and end of the year, the interests, redemption and annuity for each offer (Material 2). Suggest which loan the supplier should take out. [15 BE]

Material 2

Instalment loan

Years

Sum of loan at beginning of year in £

Interest payments in £

Redemption in £

Annuity in £

Remaining debt at end of year in £

Sum

-

-

Annuity loan

Years

Sum of loan at beginning of year in £

Interest payments in £

Redemption in £

Annuity in £

Remaining debt at end of year in £

Sum

-

-

1.7.2

Contrast internal and external financing in general by stating three aspects. [6 BE]

Material 1

Rolls Royce Motor Cars Ltd. and the automotive industry in the United Kingdom

In January 2016 Rolls Royce Motor Cars Ltd. opened its new Technology and Logistics Centre (TLC) located close to its Goodwood plant which serves as headquarters, design, manufacturing and assembly center. The TLC provides logistics support to the manufacturing plant for current and future models. The company invested heavily to increase productivity and upgrade its facilities. This was to help prepare for the launch of future models, such as the Cullinan. Rolls Royce Motor Cars installed an inbound warehouse for production parts, a distribution center including an inbound body shop 3 and a finished car store. The TLC allows for further future expansions. A spokesman for Rolls Royce said that news of the investment was good for all the Rolls Royce workers, the UK automobile industry and the wider economy. It showed what could happen when industry and government worked together to build a better business environment. As part of its expansion, Rolls Royce created more than a hundred new jobs at its Goodwood plant and at its TLC. To create a lean production strategy, Rolls Royce streamlined its production methods, operations and processes. This enabled it to compete globally, retain quality and increase profit. For example, ‘just in time’ was introduced to improve efficiency, reshaping workshops 4 where many parts had been in stock. Workers could then call for additional spares when needed, rather than having parts on hand if required. To assist with the change to just in-time ordering and ensure that lean production ideas were implemented smoothly with suppliers and cut costs, the company introduced Customer Relationship Management (CRM) software.

The UK automobile industry has historically been a leader in the adoption of lean process techniques, but is now facing global consumer demand for greater personalization and shorter lead times combined with increased competition from low cost countries. Just like the global automobile industry, the UK automobile industry is about to implement ‘digitalization’, the application of digital technologies in the manufacturing sector. The CEO of the Goodwood plant uses digitalization to better plan plant maintenance using sensors on machinery to predict future usage, reduce unplanned machine downtime and reduce plant maintenance costs. Unlike Germany (Industrie 4.0), the USA and Japan, the UK lacks a fully coordinated, government-led digital strategy at present and suppliers have a far lower adoption of digital technologies than vehicle manufacturers. Consequently, the UK wants to place digitalization right at the heart of its government’s new industrial strategy to position itself as progressive, innovative and competitive on the global market.

adapted and abridged from: https://assets.kpmg/content/dam/kpmg/uk/pdf/2016/11/SMMT-KPMG-digitalisation-automotive-industry-report.pdf; https://en.wikipedia.org/wiki/Goodwood_plant (abgerufen am 4. Januar 2021).

3 body shop: Autokarosseriewerkstatt

4 workshops: Betriebswerkstätten

2 The automobile industry is a crucial part of the UK economy. The United Kingdom is the second largest car market and fourth largest car manufacturer in Europe.

2.1

In Material 1, lines 7-9, a spokesman for Rolls Royce Motor Cars Ltd. said that news of the investment had been good for all the Rolls Royce workers, the UK automobile industry and the wider economy. Examine three benefits from the investments to the UK’s economy. (9 BE)

2.2

The United Kingdom has quite similar economic policy objectives to those set out in the German Law for Stability and Growth of 1967. Identify these objectives and their target values. Examine the impact of the automobile industry’s investments on two objectives of your choice. (10 BE)

2.3

Describe three fiscal measures by which the UK government could promote the digitalization of its industry in general. (6 BE)