Debra is a director of the innovative company Eternal Healing Pty Ltd which specialises in the...
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Debra is a director of the innovative company Eternal Healing Pty Ltd which specialises in the production and promotion of alternative healing remedies. Their latest product line includes a highly popular range of crystals and healing guides called 'Crystal Comfort. The company is recognised as the market leader in this area and has grown rapidly to be a dominant participant in the alternative healing market nationally, Debra has asked you to prepare a report concerning the following commercial proposals having particular regard to the provisions and policies of the Competition and Consumer Protection Act 2010(Cth) (a) The main competitor to Eternal Healing Pty Ltd is Healthy Spirit Pty Ltd. Both companies presently obtain their crystals from the same supplier, Crystals R us Pty Ltd. Eternal Healing holds 62% of the market and Healthy Spirit 23%. Eternal Healing wishes to protect and increase their market share and the first proposal is that Eternal Healing approach Crystals R us and inform them that if they wish to keep Eternal Healing's business, they must no longer supply crystals to Healthy Spirit. (b) Eternal Healing have been approached by two sellers in a very successful retail district to stock and sell Crystal Comfort products. Eternal Healing are keen to enter a distribution agreement, but they will only do so if the new sellers agree to sell the products for no less than $40 per item and agree that they will stock the Eternal Healing products exclusively, refusing to sell Healthy Spirit products. (c) Crystal Comfort product is currently distributed by ten main retail outlets, representatives of which have all met at an enlightenment day held by Eternal Healing. The ten representatives decide to lunch together and during that time the various prices at which the Crystal Comfort product is sold in their outlets is discussed. All the representatives are pleased at how well the product is selling and two representatives believe that demand will support a price increase to $50 per item if the product cannot be obtained at a lower price elsewhere. One of the representatives, Marie, is not convinced and leaves the discussion. Two weeks later, nine of the representatives have increased the price of the Crystal Comfort product to $50 per item. Three weeks later, Marie's product and public liability insurance is increased substantially, and she is advised by her accountant to increase the retail price of her stock by 10%, with the result that she too is offering the Crystal Comfort product for sale at $50 per item. Q3. Jacob is a stockbroker who, over the course of a year, sold 1.5 million shares in a company, Chem Tex to people and other companies that he was affiliated with. He did this so that the Chem Tex looked like a success and encouraged others to trade. Has Jacob done anything unlawful? Q9. Boris seeks personal investment advice from Rory, a financial advisor and AFS licence holder. Boris, a 60-year-old client with an income of $60,000 per year, is considering investing his life savings of $300,000 in a new technology of company. Rory uses accurate data to calculate that the company has a 50% chance of tripling his money and a 50% chance of going broke. Rory advises Boris to make the $300,000 investment. Has Rory fulfilled all his obligations as an AFS licensee? Debra is a director of the innovative company Eternal Healing Pty Ltd which specialises in the production and promotion of alternative healing remedies. Their latest product line includes a highly popular range of crystals and healing guides called 'Crystal Comfort. The company is recognised as the market leader in this area and has grown rapidly to be a dominant participant in the alternative healing market nationally, Debra has asked you to prepare a report concerning the following commercial proposals having particular regard to the provisions and policies of the Competition and Consumer Protection Act 2010(Cth) (a) The main competitor to Eternal Healing Pty Ltd is Healthy Spirit Pty Ltd. Both companies presently obtain their crystals from the same supplier, Crystals R us Pty Ltd. Eternal Healing holds 62% of the market and Healthy Spirit 23%. Eternal Healing wishes to protect and increase their market share and the first proposal is that Eternal Healing approach Crystals R us and inform them that if they wish to keep Eternal Healing's business, they must no longer supply crystals to Healthy Spirit. (b) Eternal Healing have been approached by two sellers in a very successful retail district to stock and sell Crystal Comfort products. Eternal Healing are keen to enter a distribution agreement, but they will only do so if the new sellers agree to sell the products for no less than $40 per item and agree that they will stock the Eternal Healing products exclusively, refusing to sell Healthy Spirit products. (c) Crystal Comfort product is currently distributed by ten main retail outlets, representatives of which have all met at an enlightenment day held by Eternal Healing. The ten representatives decide to lunch together and during that time the various prices at which the Crystal Comfort product is sold in their outlets is discussed. All the representatives are pleased at how well the product is selling and two representatives believe that demand will support a price increase to $50 per item if the product cannot be obtained at a lower price elsewhere. One of the representatives, Marie, is not convinced and leaves the discussion. Two weeks later, nine of the representatives have increased the price of the Crystal Comfort product to $50 per item. Three weeks later, Marie's product and public liability insurance is increased substantially, and she is advised by her accountant to increase the retail price of her stock by 10%, with the result that she too is offering the Crystal Comfort product for sale at $50 per item. Q3. Jacob is a stockbroker who, over the course of a year, sold 1.5 million shares in a company, Chem Tex to people and other companies that he was affiliated with. He did this so that the Chem Tex looked like a success and encouraged others to trade. Has Jacob done anything unlawful? Q9. Boris seeks personal investment advice from Rory, a financial advisor and AFS licence holder. Boris, a 60-year-old client with an income of $60,000 per year, is considering investing his life savings of $300,000 in a new technology of company. Rory uses accurate data to calculate that the company has a 50% chance of tripling his money and a 50% chance of going broke. Rory advises Boris to make the $300,000 investment. Has Rory fulfilled all his obligations as an AFS licensee?
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a The proposal for Eternal Healing to approach Crystals Rus and inform them that they should no longer supply crystals to Healthy Spirit in order to protect and increase Eternal Healings market share ... View the full answer
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Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey
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