Quiz

Goodbye Plant and Equipment, Hello Software

Round-number bids, tailoring primary care incentives to the health of a state population, and one benefit of industry incumbency

1 of 5
1 of 5

Intangible assets (patents and software, and goodwill from acquisitions) back in 1975 — the days of physical assets (plant and equipment — were 17% of the assets of the S&P 500 companies. Today, in an economy dominated by Microsoft, Google, Apple and the like, intangibles represent about:
30% of S&P 500 company assets.
60%.
90%.

Read on: How we view company performance and the overall economy, however, hasn’t kept pace with the shift.

2 of 5
2 of 5

Round-number bids — offering an even $100 million for a privately held company a bidder might value at, say, $97 million — are designed to scare off competing bids and demonstrate serious intent. They also affect timing to close:
Reducing the normal 87 days to 76.
To 66 days.
To 56 days.

Read on: Round-number bids aren’t prevalent in public company acquisitions, where per-share amounts can be more meaningful.

3 of 5
3 of 5

Health care is complicated, and sometimes the structure of effective incentives is counterintuitive. In a program trying to get primary care doctors to correctly balance telehealth visits, in-office visits and referrals to specialists, should Medicare pay physicians:
More for a primary care visit in a state with a sicker population.
More in a state with a healthier population.
The same amount nationally.

Read on: Generally, primary care doctors need to see more patients via telehealth and refer fewer to specialists.

4 of 5
4 of 5

Startups are more nimble than older companies, according to modern wisdom, and the widespread availability of capital and technology means new entrants can often run circles around established firms. A sticking point, though, is skilled labor and managers. When Brazil’s OK of ethanol set off a boom in sugar cane:
Established sugar mill operators accounted for three-quarters of the growth, or 91 out of 122 new mills.
Some 18% of managers at those mills were transferred from existing operations.
6.4% of the total workforce at those new mills was made up of inter-company transfers.
All of the above.

Read on: Startups were more reliant on local labor, which was less skilled, while established companies pulled from a labor-rich pool of skilled staff.

5 of 5
5 of 5

A study suggests 20 countries — each either a former Soviet republic or satellite — achieved a decade of economic growth 1.38 percentage points annually above their previous rate, as they:
Became home to Apple retail stores.
Adopted a flat income tax system.
Tore down statues of Stalin and Lenin.

Read on: The reform induced more capital investment, such as factory and industrial equipment purchases, and some gains in employment.