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Consider the following information. Cash Flows for the First Alternative YEAR 0 1 2 3 Alternative A ($32,750) $15,000 $22,000 $8,500 Calculate the internal rate of return for the first alternative and determine its economic viability at MARR = 8%. a) IRR = 8.24%, viable. b) IRR = 18.69%, not viable. c) IRR = 18....
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Determine the cost of capital for a $2 million capital project with the following cost and capital structure. The fixed cost is $400,000 and the variable cost is 40% of sales revenue. The project is expected to produce sales revenue of $2 million per year. The cost of long-term debt is 10% and the cost of equity capit...
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Consider an electron in the 3d state of an unknown ion. The possible values of mℓ for this electron are -2, -1, 0, 1, and 2. What is the maximum number of electrons this ion could have?
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A uniform steel rod (E = 200 GPa, v = 0.30) with a 40-mm diameter and 500-mm length is initially held horizontal and stress free. If the rod is now attached to three equally spaced supports, determine the largest allowable temperature increase so that the maximum tensile stress in the rod does not exceed 56 MPa.
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For the following question, consider this case: XYZ company has 500,000 bonds outstanding, with a coupon rate of 8%, a current market price of $960, and a face value of $1,000. Interest is paid semiannually. Company also has 1 million shares of common stock outstanding at a price of $20 per share. The expected dividend...
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Goodwill impairment loss should be: a. reported as a regular operating loss b. disclosed as an operating item in a manner consistent with other non-cash charges c. deducted as a business loss and reported on the tax return d. recorded in an income statement captioned "other"
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The following information describes a company's usage of direct labor in a recent period: Actual hours used 41,100 hours Standard hours for units produced 40,500 hours Actual rate per hour $11.40 Standard rate per hour $10.75 Based on this information, the direct labor rate variance is: a. $26,925 unfavorable b. $2...
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The data below are for the last year of operations for Rocky Top Company: Units in beginning inventory 0 Units produced 6,000 Units sold 5,000 Net income under variable costing $24,000 Net income under absorption costing $30,000 Under both variable and absorption costing, the fixed manufacturing overhead per unit was...
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Bryce Electronics had the following income statement activities for the year: Income before income taxes $400,000 Income tax expense 140,000 Which of the following would not be included in a statement of cash flows using the indirect method? a. Increase in cash of $260,000. ...
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A company that uses job-order costing has the following information for its first year of operation: Direct materials used in production $345,000 Direct labor costs $160,000 Manufacturing overhead costs $330,000 Overhead is applied to production based on estimated direct labor cost, and the estimated manufacturing...
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An investor buys $14,500 of a stock for $35 per share using a 70% initial margin. The broker charges 7% on the margin loan and requires a 30% maintenance margin. The stock pays a $0.75-per-share dividend in 1 year, and then the stock is sold at $37 per share. What is the investor's rate of return?
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Which of the following is an example of utilitarian influence? Explain. a. An individual seeks brand-related knowledge and experience from friends, neighbors, colleagues, and relatives who have reliable information about the brand. b. An individual seeks information about various brands from a professional. c. An...
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A firm using the perpetual inventory system purchases inventory worth {eq}\$150,000 {/eq} on account with terms {eq}2/10 {/eq}, {eq}n/30 {/eq}. Assuming no returns or discounts allowed, the entry to record the payment by the firm in full within the discount period would be: A. Debit Accounts Payable, {eq}\$150,000...
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The rate of return on a bond holding period is equal to: a. the coupon rate divided by the current price of the bond. b. the yield to maturity of the bond. c. the current yield of the bond plus the current yield. d. the current yield plus the capital gain yield. e. none of the above.
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For a normal distribution, find the probability that a randomly selected data value is between 1 and 3 standard deviations above the mean.
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Suppose consumers will buy 10-2p units of a product when the price is p dollars per unit. Determine the price at which consumers are willing to buy 75% of their maximum consumption.
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What is the largest interval on which the power series $$\sum_{n=1}^\infty n!x^{n!}$$ converges?
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An adjusting entry affecting the accounts listed below (in no particular order) was made to recognize revenues earned but not previously recorded. In what direction was each account affected (debit, credit) by the adjusting entry? 1. Unearned revenue 2. Rent expense 3. Revenue 4. Accounts payable 5. Inventory 6. Prepa...
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Loan amortization tables show the annuity payment at the _____ of each period. a. beginning. b. end. c. either the beginning or end. d. neither the beginning nor the end.
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During 2012, Cox Co. sold equipment that had a cost of $379,420 for $231,792. This resulted in a gain of $9,750. The balance in Accumulated Depreciation-Equipment was $1,075,000 on January 1, 2012, and $1,035,000 on December 31. No other equipment was disposed of during 2012. Depreciation expense for 2012 was _____.
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Ovation Corporation manufactures metal fasteners for use in construction. Ovation has the opportunity to accept a special order for 5,000 metal roofing hangers at $4.00 each. The normal selling price is $5.00 and unit costs were determined as follows: Direct materials$2.60 Direct labor0.90 Variable overhead0.50 Fixed...
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The price-elasticity coefficients are {eq}\; 2.6, \; 0.5, \; 1.4, {/eq} and {eq}\; 0.18 {/eq} for four different demand schedules {eq}\; D_1, \; D_2, \; D_3, {/eq} and {eq}\; D_4, {/eq} respectively. A {eq}2 {/eq} percent increase in price will result in an increase in total revenues in which of the following case...
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Country Workshop manufactures both designer furniture and designer mattresses. Because of the time involved in crafting individual pieces of furniture, factory overhead costs are applied on the basis of direct labor costs rather than on the basis of direct material costs. This is the case, because the direct labor cost...
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A competitive firm is producing a good whose price is $10. If this firm is maximizing profit, which of the following is true? a. Total revenue equals total costs. b. Marginal revenue equals marginal costs. c. Marginal revenue equals $10. d. Marginal cost equals $10. e. Each of the above is true.
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Compute the flux of the vector field {eq}\mathbf{F}=z\mathbf{i}+4z\mathbf{k} {/eq} through the parametrized surface {eq}S: x=s^2, y=2s+t^2, z=1, \quad 0 \leq s \leq 5, 1 \leq t \leq 4{/eq}, oriented upward.
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Company X is considering a project that will produce cash inflows of $7 million a year for four years followed by $10 million in year five. What is the internal rate of return if the initial cost of the project is $41 million? a. 10.43% b. 12.03% c. 9.15% d. 12.32%
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Suppose the Tasmanian state government is considering imposing additional taxes on cigarettes to curb health related problems. Assume there is no interstate trade of cigarettes. You have been hired by the state government to provide some analysis of the proposed policy. a) Previous studies indicate that the price elas...
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Ajax Company manufactures two types of office chairs, Model A and Model B. It estimates the following results for next year. Model AModel B Sales Revenue$400,000$500,000 Variable Cost$240,000$320,000 Fixed Cost$60,000$40,000 Approximately what percentage of the total fixed costs would be eliminated if Model B is dr...
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There were two inventory cost flow methods used during 2014. The LIFO inventory cost method would produce: A) higher income and higher ending inventory when costs are increasing. B) lower income and lower ending inventory when costs are increasing. C) lower income and higher ending inventory when costs are decreasin...
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Machine C costs $205,000, has a life of 10 years and will return a benefit of $75,500 in the first year, and increasing by 8% for the life of the machine. The first-year costs for Machine C are $45,000, increasing by an inflation rate of 3% per year. The salvage value at the end of life of the machine is 15% of the ori...
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Find a formula for the nth term of the sequence: -3, -5/2, -3/2, 1/2, ... and determine whether the sequence converges or diverges.
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A steady-flow of air with a mass flow rate of 1.5 kg/s and a velocity of 350 m/s enters a duct and flows out at a velocity of 400 m/s. The diameter of the duct is 32 cm at the inlet and 28 cm at the exit. Determine the force that must be applied to the duct to hold it stationary. A. 882.1 N B. 532.6 N C. 210.6 N D....
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Pankratz Corporation began operations on January 1, Year 1, and used the FIFO method to assign cost to its inventory. Management is considering a change to the LIFO method. Given the following data: Net income, Year 1 $500,000 Net income, Year 2 440,000 Net income, Yea...
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What is the probability that at least 3 of the 5 trees randomly sampled (without replacement) from a plot containing 10 Douglas-fir and 15 Hemlock trees are really Douglas-firs?
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If 51% of Americans between the ages of 4 and 8 go to bed before 9 p.m., find the probability that the number of Americans between the ages of 4 and 8 in a sample of 60 who will go to bed before 9 p.m. is at most 30.
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Change the following double integral to an equivalent polar integral and evaluate the polar integral: {eq}\int_{0}^{1} \int_{0}^{x} xy \: dy\: dx{/eq}
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Suppose stock prices are expected to decline sharply next year. How would this affect the interest rate on new debt issues? Why? a. The interest rate would increase because expectations of lower future dividends will decrease the value of the existing stock market. b. The interest rate would decrease because the expe...
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Suppose that two students do a 95% confidence interval for a population mean μ at the same time. The two students computed the same sample mean from the same sample of the same size. However, Student A had a larger standard deviation than Student B. How will the two confidence intervals differ? (a) The confidence inte...
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Interest rates increase in the United States and there is a decrease in the expected future exchange rate of the US dollar. This will cause capital to _____ the United States and the quantity of US dollars demanded at any given exchange rate to _____. A. inflow; increase B. outflow; increase C. inflow; decrease D....
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The GPAs of all students enrolled at a large university have an approximately normal distribution with a mean 3.02 and a standard deviation of 0.29. Find the probability that the mean GPA of a random sample of 20 students selected from this university is 3.08 or higher. Round your answer to four decimal places.
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A call option with 10 years to expiration has a strike price of $35 and a current price of $7. A put option with 10 years to expiration and the same strike price as the call has a current price of $12. What is the market price of a risk-free bond that matures in one year and has a face value of $1,000?
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Two corporations, Taggart Transcontinental and Welkat Railroad, are identical in every way except that Taggart Transcontinental has no debt and Welkat Railroad has $2 million in 7% bonds outstanding. Both corporations have earnings before interest and taxes (EBIT) of $1 million and a tax rate of 30%. The cost of equity...
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Which of the following statements is correct? a. The regular payback is useful as an indicator of a project's liquidity because it gives managers an idea of how long it will take to recover the funds invested in a project. b. The discounted payback method recognizes all cash flows over a project's life, and it also a...
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NikkiG's Fashions has a net profit pre-tax of $225,000, total sales of $1,960,000 and interest expense of $32,700. The firm's average total assets are $1,520,000, its times interest earned is 6.85 and its tax rate is 34%. Compute its return on sales (or margin).
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Following are revenues and expenses of an accounting period for a private not-for-profit college. Net tuition and other student revenues $2,500,000 Scholarship revenue 300,000 Investment income 100,000 Allowance for uncollectible tuition and other student revenues (rev. 10,000) State aid revenue (rev. 150,000) Sa...
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Bill can either earn an annual salary of $50,000 in 2012 with a guaranteed salary increase of 5% per year for the next three years, or Bill can accept a salary of $40,000 in 2012 with a guaranteed 20% increase per year for the next three years. If the market interest rate is 7%, how much would Bill have to receive in ...
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Assume that Frost Corporation has a current earnings and profits (E&P) of $500,000 and an accumulated E&P of $500,000 at the beginning of the year. Frost Corporation has a capital loss carryover of $100,000 and distributes $1,200,000 to its sole shareholder. Determine the shareholder's dividend income. A) $120,000 B)...
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Carver Inc. uses the indirect method to prepare its statement of cash flows. Refer to the following section of the comparative balance sheet: Dec. 31, 2012 Dec. 31, 2011 Accounts receivable $65,000 $50,000 Inventory 115,000 160,000 Accounts payable 30,000 20,000 The change in accounts payable from December 31, 201...
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For the following statements regarding the price level and employment, indicate whether they are true or false. a. A rightward shift of the aggregate demand curve will lead to an increase in the price level and an increase in employment in the short run. b. According to classical economists, changes in the price leve...
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You deposit $100,000 in a bank account and withdraw $500 at the end of each year. The account pays 6% annual interest. How long will it take to accumulate $10,000,000?
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Two product lines were compared based on sales, cost of goods sold, and operating expenses. Which of the following statements is true? A) The Per Unit approach provides a basis for evaluating segment contribution. B) The differential revenue approach focuses on relative segment profitability. C) Operating expenses a...
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Given the function $$\frac{\sin z}{z^2(z-2)},$$ I can see that it has singularities at $z = 0$ and $z = 2$. I want to integrate this function along a contour $C$ given by $\{|z| = 3\}$. I calculate the residues of this function at $z = 0$ and $z = 2$ as follows: $$\text{Res}_{z=0} f(z) = \frac{\sin(0)}{(0-2)^2} = 0$$ ...
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GS Cookie Co. forecast cash receipts for January and February of $8,500 and $9,500, respectively. Cash payments of $4,500 and $5,500 are expected in these two months. GS Cookie's Cash balance at the beginning of January was $5,500, a level that it attempts to maintain. At the beginning of the year, GS Cookie has a $13,...
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The current is perpendicular to the plane of a rectangular coil, 100 turns, and 0.13 m by 0.25 m. The current is 9.8 A and a uniform magnetic field of magnitude 1.6 T spans the entire region containing the coil. (a) If the coil is hinged along a diagonal, what torque acts on the coil in the absence of the magnetic fie...
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Witchey Corp. acquired 100 percent of the outstanding common stock of Lonestar Corp. at book value equal to fair market value. The parent is going to use the partial equity method. The subsidiary reported the following results for the current year: Income before income taxes$328,000 Less: Amortization of excess fai...
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Given that $X$ is a $\text{Poisson}(\lambda)$ random variable, what is $P[X > \lambda]$?
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During 2014, Wilden Corporation had the following results: Sales revenue of $750 million, interest revenue of $15 million, cost of goods sold of $500 million, selling and administrative expense of $65 million, and interest expense of $30 million. Wilden Corporation's income tax rate was 30%. How much was Wilden's taxab...
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Reggie's Trucking, Inc. is in the process of opening a new trucking division called Roadrunners. The new division will focus on oversized and over-the-road freight hauling. The firm's CFO believes that an opportunity exists for another company to purchase Roadrunners when the firm is no longer able to generate positive...
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A company is evaluating a potential new project. Which of the following would increase the probability that the firm will accept the project? a. The study period is increased b. Financing costs for the project are reduced. c. An increase in the required rate of return. d. All the above would increase the probabilit...
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How many sheets should be included in a sample for an acceptance sampling plan with a lot tolerance proportion of 0.03, an accept/reject decision point of 0.04/0.02, and a sample size of n = 20?
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Jester Company had the following inventory at year end: V14 $250,000 V26 400,000 T54 150,000 Total $800,000 V14 is the replacement cost for this item. V26 is subject to a market value decline, although the decline is only ...
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Find the center of mass of the plate bounded by the curves {eq}x = y^2, x = 1 {/eq}, assuming that the density {eq}\rho = 1 {/eq}.
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Solve the equation $y''+y'+3y=0$ given that $y(0)=y'(0)=0$. Is the solution $y(x)=0$?
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Consider 50.0 mL of a solution of weak acid HA (Ka = 1.00 x 10^-6), which has a pH of 4.000. What volume of water must be added to make the pH = 5.000?
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Stock A has a beta of 1.3 and a required return of 12%. Stock B has a beta of 0.8 and a required return of 8.8%. What is the risk-free rate?
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Your required rate of return on the stock is 12 percent and the dividend growth rate is 5 percent. The stock is currently selling for $55 a share. What is the dividend yield?
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Managers may _____ their budgeted costs or _____ their budgeted revenue to create a budget target that is easier to achieve. a. overstate; overstate b. understate; understate c. understate; overstate d. overstate; understate
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A factory producing cell phones has the following cost function {eq}C(x)= (2x^2)+10,000{/eq}. If the company produces and sells x cell phones, then what is the average cost per cell phone?
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Two competitive firms, A and B, are in the market for a product. The firms' marginal costs are given by: Firm A: MC = 25 + 2Q Firm B: MC = 12.5 + 1.25Q where Q is the number of units produced by each firm. If the market demand is given by P = 87.5 - 1.5Q, then the Cournot equilibrium price is: A) $71.50 B) $46.11 ...
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Sutton Construction is considering the purchase of a new aerial work platform costing $1,310,000. The platform will be depreciated over its estimated useful life of six years by the straight-line method. It will have no salvage value. The company expects to receive $600,000 in additional cash inflows during the first y...
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An accountant is 60% sure that there is a $1 million error in the company's accounting. If the accountant focuses on the accounts receivable, he believes there is a 60% chance that he will find the error. If the accountant focuses on the fixed asset accounts, he believes there is a 40% chance that he will find the erro...
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Relyea, Inc., acquired 100 percent of the outstanding common shares of Green Corporation for $130,000 in cash on December 31, 20X5. The fair value of the net assets of Green was $150,000 at the date of the acquisition. The fair value of the noncontrolling interest at that date was $40,000. Based on the foregoing inform...
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Which of the following will not result in an increase in cash flow if all else is held constant? a. selling stock b. decreasing variable costs c. decreasing accounts receivable d. increasing depreciation expense e. increasing deferred taxes
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A company has a capital structure that consists of 100 percent equity. Currently, it is considering adding some debt to its capital structure, but is debating the optimal amount. Based on this information, which of the following statements is correct? A. In this industry, a company's WACC is generally the same as the...
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How would economists classify purchases of government securities by the Federal Reserve? A. Government purchases B. None of these C. Consumption expenditures D. Investment expenditures
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Use the formula for the present value of an ordinary annuity to find the value of an annuity for the following scenario. Then determine how much of the annuity is from contributions and how much is from interest. Round your answer to the nearest dollar. a) Suppose that a person has purchased a 25-year annuity that mak...
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Horowitz Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $171,600, has an estimated useful life of 9 years, a salvage value of zero, and will increase net annual cash flows by $33,600. What is its approximate internal rate of re...
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Solve the problem using the transformation $u=y,\ v=y+x,\ z=y-x$ $$\iint_D(x-y)\ dx\ dy,\ D= \left\{(x,y):\left| \frac{x}{2}\right|+\left| \frac{y}{3}\right|\le 1\right\}$$
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A single-product company prepares income statements using both absorption and variable costing. Manufacturing overhead cost applied per unit produced in Year 2 was the same as in Year 1. The Year 2 variable-costing statement reported a profit, whereas the Year 2 absorption-costing statement reported a loss. A possible ...
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While Sallie Jepson was a student at UNC-CH, she borrowed {eq}\$12,000 {/eq} in student loans at an annual rate of {eq}6 \% {/eq}. If Sallie repays {eq}\$1,800 {/eq} per year, how long, to the nearest year, will it take her to repay the loan?
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Dorchester Corp. has provided the following information: Beginning finished goods inventory$30,000 Cost of goods manufactured400,000 Ending finished goods inventory42,000 Beginning work in process inventory36,000 Ending work in process inventory16,000 The amount of the total manufacturing cost is: A. $428,000. B. $39...
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You own an oil pipeline that generates $500,000 cash flow over the next five years. The pipeline's operating costs are negligible and it is expected to last for a very long time. The interest rate is 8% but the volume of oil is expected to decline by 5% per year. What is the PV of the cash flow if it is assumed to las...
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At a time {eq}t {/eq}, in seconds, the rate of growth of bacteria population is {eq}P'(t)=8t^3-12t^2 {/eq}, where {eq}P(t) {/eq} is measured in thousands of bacteria. There are 25000 bacteria at time {eq}t=1 {/eq} second. Find the population formula {eq}P(t) {/eq}. How many bacteria are there after 2 seconds?
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Let $x,y,z,w$ be positive real numbers. What is the value of $100\lfloor\lfloor\lfloor\lfloor x\rfloor\rfloor\rfloor +\lfloor\lfloor\lfloor\lfloor y\rfloor\rfloor\rfloor +\lfloor\lfloor\lfloor\lfloor z\rfloor\rfloor\rfloor +\lfloor\lfloor\lfloor\lfloor w\rfloor\rfloor\rfloor$ given that $x+y+z+w\le 1$?
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Last year, at the advice of J.T. Lindseth, her financial planner, Lydia purchased a $1000 face value, 5.50 percent semi-annual coupon bond with four years to maturity priced to yield 8.50 percent of $906.52. Now, the bond has matured and the bond has matured, and Lindseth calls Ali and informs her that because he had i...
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You are the manager of a monopoly with (inverse) demand given by P = 36 - 6Q. Your firm's cost function is given by C = 184 + 6Q. Determine your firm's marginal revenue. MR = ............... (Enter your response using integers. Include the appropriate sign.)
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You have been managing a $5 million portfolio that has a beta of 1.25 for the past year. The market's return was 14 percent. Your salary was 130,000. During the last year, you added another $1 million to the portfolio. If your portfolio's beta increased to 1.40, what is the beta of the new investments? a. 1.09 b. 1.7...
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Sabas Company has received a special order for 2,200 units of product K48 at a special price of $320.00. Product K48 normally sells for $400.00 and has unit variable costs of $280.00. If this special order is accepted, fixed overhead costs will not be affected and special molds will have to be purchased for $2,000. If ...
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It is now January. The following information is available: Quantity Price Jan. 1 Jan. 10 Jan. 28 Jan. 1 Jan. 10 Jan. 28 Inventory 14,000 units $5.60 $5.70 $5.50 Purchases ...
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Alpha, Inc. is considering the purchase of a new machine costing $42,000. The machine is expected to have a life of 5 years with a 5-year MACRS rate of 20%, 32%, 19%, 12%, 11%, and 6% in year 1 through year 6 respectively. Alpha will receive a salvage value of $7,000 at the end of year 5. The machine will produce cash ...
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A 13,000-seat football stadium has annual fixed costs of $6,000,000, variable costs of $4,000 per ticket, and a ticket price of $5,000 per ticket. The stadium plans to increase the number of workers in the concession stands to reduce the variable cost per ticket by $1,000. It also plans to reduce the ticket price by $1...
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Your firm is considering building a new office complex. For this purpose, the firm is considering a building material called "taccrete" which was developed by your company. You have collected the following information: Cost of each unit of raw material: $45 Cost of labor: $50 per hour Units of raw materials per unit...
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You are an assistant to a senator who chairs an ad hoc committee on reforming taxes on telecommunication services. Based on your research, AT&T has spent over $15 million on related paperwork and compliance costs. Moreover, depending on the locale, telecom taxes can amount to as much as 25% of a consumer's phone bill. ...
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Horowitz Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $176,000, has an estimated useful life of 7 years, a salvage value of zero, and will increase net annual cash flows by $33,740. What is its approximate internal rate of re...
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Compute the amount of unrealized intercompany profit that should be eliminated as of December 31, 2014, for Hanna Company, which acquired all of the common stock of Shanta Company on January 1, 2014. Hanna uses the lower-of-cost-or-market method to value its inventory, and at December 31, 2014, its inventory contained ...
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What is the volume of the solid that lies under the plane {eq}3x + 6y -2z +10 = 0{/eq} and above the rectangle {eq}R = {(x, y): -1 \leq x \leq 3, -1 \leq y \leq 1}{/eq}?
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The London Company has $340,000 of accounts receivable and $70,000 of net profits. The company's average collection period is 27 days. What is the company's capital intensity ratio?
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Suppose the $ is devalued: we go from Yen = $1/100 to Yen = $1/50. What is the elasticity of demand for imports in Japan? a. 0 b. 1 c. 1.5 d. 2 USAJapan Demand for imports (before $ - devaluation)400400 Demand for imports (after $ - devaluation)200800 Price for imports, in foreign currency (before $ - devaluati...
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An analyst has gathered the following information about a 10-year, 10 percent coupon bond, with annual coupon payments. * N=10 * i=8% * PV=-1134.22 * FV=1000 The bond's yield to call (YTC) is 12 percent, if the bond is called in two years. Based on the above information, if the bond is expected to be called in two...
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Bev's Beverages is considering the purchase of a $115,000 ice cream maker. The machine would produce the same net cash inflows for each of the next 8 years. Its salvage value is expected to be $16,500. The cash inflows occur evenly throughout each year. The cash outflows occur at the beginning of each year. The discoun...
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