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Company B Company A Large Small Large 1, 1 2, 3 Small 3, 2 2, 2 Which of the following choices represent the Nash Equilibrium in the above game? a. Small, Large: 2, 3 b. Large, Small: 3, 2 c. Large, Large: 1, 1 d. Small, Small: 2, 2
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Bad debt expense is $25,000. Allowance for doubtful accounts has a beginning balance of $12,000 and an ending balance of $10,000. What is the book-tax difference associated with bad debt expense? A. $2,000 favorable. B. $2,000 unfavorable. C. $7,000 favorable. D. $7,000 unfavorable. E. None of the above.
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Assume Stock R's dividend is expected to grow at a constant rate of 8% a year and that the current stock price is $24.75. Which of the following statements is correct? a. The stock's dividend yield is 8%. b. The price of the stock is expected to decline in the future. c. The stock's dividend yield is 5%. d. The sto...
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This morning, Anmol decided to invest in an annuity that will pay him {eq}\$500 {/eq} at the end of each year. He will reinvest payments into the annuity. He is expecting to earn {eq}6.5 \% {/eq} each year. How much money will he have in the annuity at the end of {eq}30 {/eq} years? a. {eq}\$27,933.62 {/eq}. b. {...
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A 10-year bond pays 9% annual interest. The market price of the bond is $934.86; par value is $1,000. Calculate the bond's yield to maturity. Show work, please. Thanks.
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Brooke Manufacturing has a pre-tax cost of debt of 9%, a cost of equity of 15%, and a tax rate of 35%. The firm uses a source of debt that has a cost of 9% and issues new equity to finance its projects. The relevant WACC for a new project is 14%. What is the target debt-equity ratio in the sense of the WACC equation?
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Your uncle has $1,500 to invest in one of two well-diversified portfolios. Portfolio 1 has a beta of 0.70 and an expected return of 6.50%. Portfolio 2 has a beta of 1.20 and an expected return of 8.00%. Assuming that your uncle desires to minimize risk, and you also invest $1,500, how much will he invest in Portfolio 1...
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In a sample of 56 clients of an online stock trading company, the average number of trades per year was 71 with a standard deviation of 20. Find the LOWER bound of the 99% confidence level of the average number of trades the company.
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Alton Construction (AC) needs $7 million of assets to get started and expects to have a basic earning power ratio of 10%. AC will own no securities, so all of its income will be operating income. If it so chooses, AC can finance up to 45% of its assets with debt, which will have an 8% interest rate. If it chooses to u...
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It's required to hang fiber optic cables between two poles x = -2 and x = 2. Calculate the length of the cable if the catenary equation is y = 2 cosh(x/2).
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Dulcimer, Inc., has just paid a dividend of $5.00. Analysts expect the company's dividend to grow at a rate of 16.2% for the next three years and then a constant rate of 2.50% thereafter. What is the expected dividend per share at the end of year 5?
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All else equal, a shift to the right of the demand curve for a product will: a. increase producer surplus. b. decrease producer surplus. c. have no effect on producer surplus. d. first increase then decrease producer surplus. e. first decrease then increase producer surplus.
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MNP Corporation is considering a project with cash inflows of $47,000 a year for two years immediately followed by $23,000 in Year 3. The initial cost of the project is $68,000. What is the profitability index if the discount rate is 9%? a. 0.53 b. 0.88 c. 0.98 d. 1.02 e. 1.13
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What interest rate with continuous compounding is equivalent to 15% per annum with monthly compounding?
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The ac generator in an RLC circuit has an rms voltage of 120 V and a variable frequency {eq}f {/eq}. The circuit has a resistance of {eq}R = 20\ \Omega {/eq} and a capacitance of {eq}C = 5.0 \times 10^{-4}\ \text{F} {/eq}. At the resonance angular frequency of the circuit, what is the rms current, in amperes?
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Waco Printing Company specializes in printing banners on a high-quality, nylon material that can withstand extreme temperatures. The company pays sales personnel a small base salary plus a large commission on each banner sold to encourage a large sales volume. The following is a summary of the revenue and cost data: ...
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Given the following information for Salt Lake Corporation: Cost of equity = 11.8% Cost of Debt = 8% Corporate tax rate = 30% If the company's weight of debt is 27% of the total value of the firm, calculate the company's weighted average cost of capital (WACC) in percents to two decimals.
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For the following reaction step, indicate which pattern of arrow pushing it represents. a) proton transfer b) loss of leaving group c) nucleophilic attack d) rearrangement
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Company Alpha's cost structure is 60% variable and 40% fixed. Company Beta's cost structure is 30% variable and 70% fixed. Which of the following statements is true? a. Company Beta will reach its breakeven point sooner than Alpha. b. Alpha's operating profit is more sensitive to changes in sales than Beta's. c. Bet...
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Sonshine Insurance reported a net income of $25 million. Included in that number were amortization expense of $7 million and an unrealized gain on investments of $4 million. Retained earnings increased by $21 million during the year, and dividends paid amounted to $1 million. What was the amount of Sonshine's net cash ...
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Which of the following statements is correct? A. The IRR method is biased in favor of long-term projects. B. The NPV method is preferred over the IRR method. C. The IRR method can be used to evaluate independent projects, mutually exclusive projects, or projects with nonnormal cash flows. D. If the IRR method is th...
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A monopolist faces the following demand curve: {eq}P = 120 - 0.5Q {/eq}. The monopolist's marginal costs are 20Q and fixed costs are 100. If the monopolist is allowed to price discriminate, what is the deadweight loss in the market?
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When a job is complete: a. work-in-process control is debited. b. the cost of the job is transferred to manufacturing overhead control. c. actual direct materials, actual direct manufacturing labor, and allocated manufacturing overhead will comprise the total cost of the job. d. finished goods control is credited.
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Your firm has been in business for 4 years. You have been the only accountant for the company. Last year, you purchased $30,000 of equipment with a 6-year life and straight-line depreciation, assuming zero salvage value at the end of 6 years. For tax purposes, you assumed a 5-year life. Your income before depreciation ...
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Show that in any triangle: {eq}a = b \cos C + c \cos B {/eq}.
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The current price of a stock is $35. The following actions take place: I. A 2 for 1 stock split II. A 20% stock dividend III. A 1 for 5 reverse stock split. In which case(s) does the total number of shares outstanding change? a. I only b. II only c. III only d. I and II only e. I and III only f. I, II and III
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Find the point elasticity of demand for the demand function {eq}\displaystyle q (x) = 100 - 20 x^2 {/eq} when the price is $20.
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Gamma Corporation has a levered beta of 1.10. The firm's capital structure includes 35% debt and 65% equity. The company has a target total return of 12%. The risk-free rate is 4.5%, and the risk premium on the market is 7%. What is Gamma's pre-tax cost of debt? Round your answer to the nearest hundredth of a percent....
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Scenario Probability Stock A Returns Stock B Returns Stock C Returns Stock A Weight Stock B Weight Stock C Weight Booming Economy 0.15 18% 14% 10% 0.2000 0.5000 0.3000 Normal Economy 0.75 12% 8% 11% 0.2000 0.5000 0.3000 Recession 0.10 -11% 2% 14% 0.2000 0.5000 0.3000 What is the portfol...
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The actual rates of return on 250 common stocks, portfolios of stocks, and bonds were compared for a 5-year period, and the betas of these securities were computed. The regression equation computed was: Actual return = 0.14 + (0.81)(Beta) Interpret this regression equation. A. A security that did not contain any sig...
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Suppose the banking system does not hold excess reserves and the reserves ratio is 25%. Assume that the banking system is exactly meeting its reserve requirement, and the public wishes to hold no currency. If Molly deposits $1,000 cash into her checking account, the banking system can increase the money supply by: a) ...
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A monopolist is selling 150 units of output, charging $24 per unit, and experiencing marginal revenue of $9. The marginal cost is $11. In order to maximize profit (or minimize losses), the firm should: A. reduce price. B. increase price. C. maintain price. D. More information is required.
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The following information is available for ABC Company, Inc. for 2016: Net Income = $210,000 Dividends Paid to Common Stockholders = $50,000 Beginning Long-Term Debt = $600,000 Ending Long-Term Debt = $650,000 Beginning Common Stockholders' Equity = $800,000 Ending Common Stockholders' Equity = $870,000 Beginnin...
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The concept of moral luck demonstrates which one of the following: A. That no matter how hard we try, we can never reason to the right thing to do B. That the principles by which we judge others are different from the principles by which we judge ourselves C. That only the consequences matter in a moral judgement D...
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Shareholders require a 16% return on their investment. If the current dividend is $1.22, and dividends are expected to grow at 6%, how much should the stock be selling for?
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ABC company has 200,000 shares, and the current share price is $20. The company wants to infuse debt of $1m. If the restructuring is expected to increase EPS, what is the minimum level of EBIT needed? Ignore taxes, and take interest, as 9%.
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Find a first-order differential equation whose solutions are the families of curves {eq}\; x^2 - y^2 = C \; {/eq} or {eq}\; xy = C. {/eq}
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Let X have a Bernoulli distribution with parameter p, and let Y have a binomial distribution with parameters n and p, that is Y|X=x has a binomial distribution with parameters n and p. Assume that X and Y are independent. Find a simple formula for E[Y | X].
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In a large population, 63% of the people have been vaccinated. If 3 people are randomly selected, what is the probability that at least one of them has been vaccinated?
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Assume the expansion of the human vocal tract is much like the tube closed at one end, where the length {eq}l = 17 \ in. {/eq} at low frequencies. Find the fundamental frequency. Express your answer in hertz to two significant figures. Use {eq}v = 1080 \ \frac{ft}{s} {/eq} for the speed of sound in air.
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Which of the following is the correct definition of internal rate of return? A. the most likely rate of return on an investment B. the rate of return that sets the net present value equal to zero C. the rate of return that makes the present value of a project's cash inflows equal to the present value of its outflows...
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You purchased a $1,000 face value bond at 6% annual interest one year ago for $981.22. Over the past year, inflation has been 4.5% and the interest rate on a comparable risk bond has gone down to 5%. What is your real rate of return on this investment?
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$$\lim_{n \to \infty} \frac{\sum_{r=1}^{n} r^m}{n^{m+1}}$$ where $m$ is a positive integer, and the sum is $\sum_{r=1}^{n} r^m$. How can I proceed from the point where I have $$\frac{1}{n} \sum_{r=1}^{n} \left(1+\frac{r}{n}\right)^m \Delta x$$ and it is given that $\Delta x = \frac{1}{n}$?
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Assume that the yield to maturity on a bond with a par value of $1,000, an interest rate of 6%, and 6 years to maturity is 6%. How much should this bond be worth? a. $600 b. $710 c. $888 d. $1,000
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A free proton has a kinetic energy of 4.00 keV. The proton makes a head-on, elastic collision with another proton that is initially at rest. What is the kinetic energy of the 4.00 keV proton after the collision?
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Blythe Industries reported a net income of $209,000. Depreciation expense was $43,000, and the company reported a gain on the disposal of investments of $17,000. Accounts receivable increased $19,000, accounts payable decreased by $16,000, and inventory increased by $11,000. Prepare the cash flows from operating act...
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Bill Dukes has $100,000 invested in a 2-stock portfolio. $75,000 is invested in Stock X and the remainder is invested in Stock Y. X's beta is 1.50 and Y's beta is 0.70. What is the portfolio's beta? a. 0.700 b. 1.200 c. 1.245 d. 1.257 e. 1.300
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The critical z-score for a two-tailed, one-sample z-test at a 0.05 level of significance is _____. A. 1.96 B. 1.645 C. 0.05 D. 2.576
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The spaceship of a recent Star Trek movie is capable of traveling to a distant planet at a speed of 0.70 c. As part of the setup before takeoff, the captain and his guests are put in a state of weightlessness by accelerating the spaceship uniformly from rest to 0.70 c over a distance of 1,500 m. What constant accelerat...
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A low-cost provider strategy focuses on operating efficiently to produce the lowest total cost of production and, consequently, the lowest price. a. True b. False
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The current price of a 1000, 7%, 10-year bond is 1122.50. The bond is callable in 10 years at a call price of 1050. Compute the bond's yield to call.
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The mean height of women in a country (ages 20-29) is 63.9 inches. A random sample of 75 women in this age group is selected. What is the probability that the mean height for the sample is less than 63.5 inches? Assume standard deviation = 2.58.
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Segmentation is based on A) benefits. B) beliefs and values. C) lifestyle. D) buyer behavior. E) product usage.
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The Cincinnati Post reported that a survey of 1,020 Cincinnati adults found that 83% felt the banks in town were overcharged for checking accounts. Use this information to determine a 95% confidence interval to estimate the population proportion. Show all work.
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Suppose that the price of a stock is $50 and that the stock pays a dividend of $2.50 per year, payable annually. Assume that the volatility of the stock price is 35% and the risk-free interest rate is 6%, continuously compounded. Calculate the price of a 1-year call option on the stock with an exercise price of $50.
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A 50-cm by 30-cm rectangular loop of wire carries a current of 0.1 A. The loop is placed 15 cm away from a long, straight wire of current 10 A which is in the plane of the loop. Calculate the net force on the loop.
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Find the sum of the series {eq}\displaystyle \sum_{k=1}^{\infty} \frac{(-1)^{k+1} (0.2)^{3k}}{3k} {/eq}
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A job order firm has provided the following information: Actual manufacturing overhead costs, $128,000 Allocated manufacturing overhead to production, $127,400 Beginning work in process inventory, $8,200 Ending work in process inventory, $7,700 Beginning finished goods inventory, $13,700 Ending finished goods inv...
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Use the two-period model to obtain the prices of the following bonds: a coupon bond with face value of {eq}\$100 {/eq} and coupon rate of {eq}8\% {/eq}, with the first coupon paid at the end of the second period; a coupon bond with face value of {eq}\$100 {/eq} and coupon rate of {eq}8\% {/eq}, with the first coupo...
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You just purchased a stock that is selling for $32.00 a share. The company has an annual dividend, which is expected to be $2.40 this year and the dividend is expected to grow by 8 percent annually. What is your anticipated percentage rate of return?
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Which of the following is NOT an essential feature of an annuity with growth? A. The first payment occurs at the end of the first period. B. The growth rate has to be higher than the discount rate. C. The payments grow at a constant rate across all periods. D. The payments stop at a certain point in time in the fut...
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Yankay Metals has a target capital structure of 40 percent common stock and 60 percent debt. Its cost of equity is 16 percent, and the cost of debt is 6 percent. The relevant tax rate is 35 percent. What is the company's WACC?
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An investor is considering the purchase of shares of a private firm with an established history of dividend payments. Required: Which dividend valuation model would the investor use to determine the value of the firm's shares? - CAPM - Zero-growth model - Constant growth model - Variable growth model
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There are 600 students in the class. Out of them, 20% know the importance of learning statistics. How many students in the class do not know the significance of learning statistics? a) 480 b) 580 c) 120 d) 360
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The function $f: \mathbb{R} \to \mathbb{R}$ satisfies $f(x) + f(1-x) =1 $ for all $x$ and $f(\dfrac{1}{2}) = 1$. How to solve it step by step?
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Why is $(4^4)^{\frac{1}{3}}$ not equal to $\sqrt[3]{4}$, and what am I doing wrong in my reasoning that leads to the incorrect conclusion that $\sqrt[3]{4}=2$ when $2^3=8$ and $4^3=64$?
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What is the molecular weight (mass) of 3-methylpentane?
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A firm's current EPS is $1.45 and its earnings are expected to grow at 7% per year. Its PE ratio is 24.9. What is the target share price in 4 years?
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A refrigerant-134a cycle operating at steady state is shown in the figure. The condenser pressure is 12 bar, the evaporator temperature is 6 ^\circ C, and the mass flow rate of refrigerant is 6 kg/min. The refrigerant is a saturated vapor at the evaporator exit and a saturated liquid at the condenser exit. Determine th...
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The marginal rate of technical substitution of labor for capital is equal to: a. {eq}-\dfrac{\Delta K}{\Delta L} {/eq} b. {eq}-\dfrac{\Delta L}{\Delta K} {/eq} c. the absolute value of the slope of a given isoquant d. All of the above
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Of the following media, which is best known as having high geographic selectivity yet is considered to offer very limited segmentation possibilities? A. Direct mailB. RadioC. NewspaperD. Magazines
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What is the relationship between the marginal rate of technical substitution and the indifference curve's shape?
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Find the maximal value of the function f(x) = x - 2x^2 subject to the constraints x_1 + x_2 + x_3 = 10, x_1 - x_2 = 2, and x_1 \geq 0, x_2 \geq 0, x_3 \geq 0.
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A particle moves along line segments from the origin to the points (3,0,0), (3,5,1), (0,5,1), and back to the origin under the influence of the force field F(x,y,z)=z^2i+3xyj+2y^2k. Find the work done. \oint_C F\cdot dr=
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Clemmens Company applies overhead based on direct labor costs. Estimated overhead and direct labor costs for the year were $112,800 and $123,200, respectively. During the year, the actual overhead was $104,000 and the actual direct labor cost was $115,000. The entry to close the over- or underapplied overhead at year-e...
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Who pays the excess of regular tax over the AMT? a. The government b. The firm c. The shareholders d. The employees e. It depends
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This year, FFD Company reported an ROE of 20%. The firm's debt ratio was 43%, sales were $6 billion, and the capital expenditures were $640 million. How much (in millions) is the firm's after-tax net income?
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MC Press stock price is $58.88, and recently paid a $2.00 dividend. This dividend is expected to grow by 25% for the next three years and then grow forever at a constant rate g. If the discount rate is 12%, what is the constant growth rate, g, in year 4?
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Suppose that the biologist tests the following hypothesis: H0:p=0.25 vs. HA:p>0.25 Where p is the true population proportion of Black Carp in Lake Huron. Of 200 randomly sampled fish from Lake Huron, the biologist finds that 18% are Black Carp. Select from the following options the correct z-score and P-value associa...
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A charge of #5 C# is at the origin. How much energy would be applied to or released from a # -2 C# charge if it is moved from # ( 3 , 6 ) # to #( -3 , 5) #?
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Jan Tuttle is the inventory manager of an art supply store. She uses a periodic review system for all oil paints. The number of days between orders P for red paint is 16 workdays. Demand = 36 units/ work day Standard deviation of daily demand = 5 units /work day Lad-time = 5 work days The z value = 1.38 for the des...
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Suppose investors can earn a return of {eq}5\% {/eq} by investing in risk-free government bonds. Call this real return {eq}r {/eq}. Then, suppose inflation increases by {eq}2\% {/eq} and the expected return on stocks increases by {eq}1.5\% {/eq}. According to the Fisher effect, the nominal risk-free rate will incr...
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Molteni Motors Inc. recently reported $8 million of net income. Its EBIT was $15 million and its tax rate was 35%. What was its interest expense? a. $5.25 million b. $5.75 million c. $6.25 million d. $6.75 million e. $7.25 million
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How to show that the set $L$ of matrices in $\mathrm{M}_2(\mathbb{R})$ of the form $\left( \begin{matrix} a&b\\ -b&a \end{matrix} \right)$ with $a,b \in \mathbb{R}$ is a subfield of $\mathrm{M}_2(\mathbb{R})$ isomorphic to $\mathbb{C}$?
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Mesta Inc. has an ROA of 9% and a payout ratio of 33.33%. What is its internal growth rate?
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Find the maximum and minimum values of the function {eq}f(x,y)= x^{2}+y^{2} {/eq} subject to the constraint {eq}x^{4}+y^{4} = 32 {/eq}.
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Fidelity Mutual Insurance Company operates along non-traditional lines. Each individual insurance office is composed of five to ten agents who service customers in their specific geographic area under a chief of staff. A regional manager, who functions as a divisional manager, oversees three to five chief of staffs and...
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Round corporation had the following slogs and production for the past four years: Year 1Year 2Year 3Year 4 Production in units5,0006,0005,0005,000 Sales in units4,0005,0005,0007,000 Soling price per unit, the variable cost, per unit, and total forced cost are the same each year. There were no beginning inventories i...
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A solid of constant density is bounded below by the plane z = 0 , above by the cone z = r, {eq}r\geq 0{/eq}, and on the sides by the cylinder r = 1. Find the center of mass.
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In May 2015, Grill Parts Co. incurred the following costs to produce 2,500 precision gas valves: May Direct materials $25,250 Direct labor $45,400 Variable manufacturing overhead $22,750 Fixed manufacturing overhead $3...
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Evaluate the integral: {eq}\int_0^{\pi/2} \frac{1}{3 + \cos x} dx{/eq}
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In a triopoly market with Cournot competition, when one firm changes its output, the other two firms (a) change their outputs (b) maintain their outputs unchanged (c) maintain their outputs unchanged but change their prices (d) none of the above
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Can the ordering cost be ignored if the order quantity is equal to the economic order quantity (EOQ)? (Assume constant demand and order lead time.) Explain your answer.
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Determine the magnetic field at the center of a circular loop of radius R = 1.0 cm carrying a steady current I = 1.0 A.
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Which of the following would reduce a firm's cash conversion cycle? a. Posting customers' invoices on the next business day after the sale. b. Cross-training workers in customer service and production. c. Increasing the times per check to pay suppliers. d. Using a larger sales discount percentage when customers do ...
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Cusic Industries had the following operating results for 2012: Sales $31,460 Cost of goods sold $20,830 Depreciation expense $5,720 Interest expense $2,990 Dividends paid $1,800 At the beginning of the year: Net fixed assets $17,900 Current assets $6,480 Current liabilities $3,800. At the end of the year Net f...
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Find the p-value that would be used to determine if the percentage of customers who prefer mint chocolate chip ice cream has increased at a 5% level of significance. A survey determines that mint chocolate chip is the favorite ice cream flavor of 6% of consumers, and an ice cream shop determines that of 160 customers, ...
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The declining-balance method of depreciation a) multiplies an asset's book value at the beginning of an accounting period by a depreciation rate. b) systematically allocates an asset's cost to the accounting periods expected to receive benefit from the use of the asset. c) bases depreciation on an asset's physical r...
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Suppose the current stock price is $80, the one-year risk-free rate is 4% and the variance of the stock return is 16% (i.e., the standard deviation is 4%). Using one-period binomial trees, calculate the value of a European call option with an exercise price of $80. Round the answers to the nearest cent.
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The solubility product of {eq}AB_2 {/eq} is {eq}3.6 \times 10^{-8} {/eq} mol{eq}^3 {/eq} dm{eq}^{-9} {/eq} at 298 K. What is the solubility of {eq}AB_2 {/eq} in water in mol dm{eq}^{-3} {/eq}? a) {eq}2.2 \times 10^{-4} {/eq} b) {eq}3.6 \times 10^{-8} {/eq} c) {eq}1.1 \times 10^{-4} {/eq} d) {eq}6.0 \times ...
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