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A company uses a batch-level allocation base for allocating manufacturing overhead costs to its customers. Which of the following manufacturing overhead costs would it assign using this allocation base? a. The cost of material handling and warehousing b. The cost of machine maintenance c. The cost of purchasing d. ...
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Evaluate the limit: $$\lim_{n \to\infty}n\cdot (\log(n) - \log(2n))$$
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It's payday, and you are going to receive $13,000 and pay taxes of $3,250. You are also entitled to a $3,000 refund of the withheld income taxes. The tax rate is 21 percent. What is your total take-home pay?
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The market price is $1,030 for a 10-year, 8 percent bond that pays interest semiannually. What is the yield to maturity? a) 7.31% b) 7.59% c) 8.23% d) 9.23%
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A company has the opportunity to invest in a new warehouse. Management has estimated that the proposed warehouse will generate additional annual sales of $6,500 and will have annual cash expenses for operations of $3,000. The additional investment in net working capital is $1,000. The proposed investment in the warehou...
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A 15-year, 8 percent coupon bond with a $1,000 face value has a yield to maturity (YTM) of 9.5 percent. Calculate the price of the bond using the MACRS depreciation schedule for a 10-year property.
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Suppose you wanted to produce a 0.10 A current with a coil of 100 turns and an iron core whose cross sectional area is 4.0 cm2 and whose length is 25 cm. Assume that the magnetic field inside the core is 1.5 T when the coil current is 0.10 A and that the rela- tive magnetic permeability will not change appreciably over...
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Sales increase by $40,000 and operating costs increase by $10,000. The tax rate is 30% Net Working Capital increases by $13,000 and you buy Fixed Asset of $10,000 with a MACRS life of 5 years. There is a relevant after-tax externality of +$1,000. CBCF in year 1 is: a. -$400 b. $25,600 c. $1,000 d. $13,600
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When a liquid is introduced into the air space between the lens and the plate in a Newton's-rings apparatus, the diameter of the tenth ring changes from 1.58 cm to 1.12 cm. Find the index of refraction of the liquid.
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The Can Division of Marigold Corp. manufactures and sells tin cans externally for $0.50 per can. Its unit variable costs and unit fixed costs are $0.18 and $0.02, respectively. The Packaging Division wants to purchase 50,000 cans at $0.20 a can. Selling internally will save $0.01 a can. Assuming the Can Division has su...
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A firm has a tax burden ratio of 0.84, a leverage ratio of 1.50, a return on total assets of 9.0%, and a return on sales of 4.0%. The firm's ROE is: A. 6.65%. B. 10.80%. C. 12.60%. D. None of the above.
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Presented is selected first quarter budget data for the Barney company sales: January 25,000 units Feb. 20,000 units March 42,000 units Additional Information: Each unit of finished product requires two pounds of raw materials. Barney maintains ending finished goods inventories equal to 25% of the following month...
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On January 1, 2016, Lester Corporation leased equipment to Summit Company. The lease term is 9 years. The first payment of $472,000 was made on January 1, 2016. The present value of the lease payments is $3,200,000. The lease is appropriately classified as a sales-type lease. Assuming the interest rate for this lease i...
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John's cost function is C(q) = 30 + 5q + q{eq}^{2} {/eq} , and Mary's cost function is C(q) = 5 + {eq}\frac {1}{2} {/eq}q{eq}^{2} {/eq}. They both have marginal costs of 10 units of the good. Graph each firm's average and marginal cost curves on the same set of axes. On which side of the minimum point of average ...
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Assuming all other factors are equal, real output is maximized in a labor-intensive economy in which A. aggregate demand is highest and aggregate supply is elastic. B. aggregate supply is highest and aggregate demand is inelastic. C. aggregate demand is highest and aggregate supply is inelastic. D. aggregate supply...
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Carver, Inc. invested in the British Pound at the beginning of 1984 at a spot rate of $0.48 per pound. At the end of the year, the spot rate was $0.52 and the pound-denominated return was 8.7%. What was the pound's percentage appreciation? A. 7.83% B. 13.52% C. 3.33% D. 8.7%
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Zellars, Inc. plans to issue 20-year bonds with a face value of $2,000,000 and a coupon rate of 4.35 percent. The interest rate on these bonds is to be 5.1 percent. In addition, the bonds will be sold at a maturity value of 93 percent of face value. Calculate the amount of premium (in dollar terms) on these bonds.
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The spot exchange rate for the Norwegian currency (the krona, NOK) is $.14 per NOK and the 180-day forward exchange rate is $.15 per NOK. Both the spot and forward rates are expected to remain constant over the next three months. The U.S. and Norwegian interest rates on 180-day investments are 3.0% and 2.0% per year, r...
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In the current stock market, companies with positive cash flows seem to trade at higher multiples compared to those with negative cash flows. This stock market anomaly is commonly known as the: A) small firm effect. B) size effect. C) market timing effect. D) EBITDA effect. E) cash flow effect.
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If a security's market price deviates from the price predicted by the constant growth model, then the market price is deemed to be either: a. overvalued or undervalued. b. undervalued. c. both overvalued and undervalued. d. overvalued.
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On January 1, Year One, Owens buys a large warehouse for $700,000 which it immediately sells to National Financing for $800,000. The warehouse has an expected life of 10 years. Owens immediately signs a contract to lease the warehouse back for its own use. This lease is for 10 years with payments of $120,000 per year. ...
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Dixson Corporation was incorporated on January 1, 1995. The corporation made its S election on April 1, 1998. The corporation retains an E&P balance from its C corporation days. Which one of the following current year income and expense items is not included in Dixson Corporation's Accumulated Adjustments Account? a. ...
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If an economy is producing a level of real GDP below the equilibrium level, it is _____. A. experiencing a recessionary gap B. experiencing an inflationary gap C. experiencing fiscal drag D. in the Keynesian range of the aggregate supply curve E. All of the above
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BigHippo is a company that makes two products, M and N. Data concerning those products for the most recent month appear below: Product M Product N Sales $36,000$32,000 Variable cost $19,000$25,000 Fixed cost$17,000 $ 9,000 What is the break-even point in unit sales for the company as a whole?
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A project has an initial cost of $35,000.00, expected net cash inflows of $9,900.00 per year for 11 years, and a cost of capital of 10.00%. What is the project's PI?
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One bond has a coupon rate of 5.8%, another a coupon rate of 8.8%. Both bonds pay interest annually, have 15-year maturities, and sell at a yield to maturity of 7.5%. If their yields to maturity next year are still 7.5%, what is the rate of return on each bond?
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On December 31, 2014, Roe Company leased a machine from Colt for a five-year period. Equal annual payments under the lease are $105,000 (including $5,000 annual executory costs) and are due on December 31 of each year. The first payment was made on December 31, 2014, and the second payment was made on December 31, 2015...
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Common stockholders are concerned with: a. maximize total market value of their shares b. maximizing annual rate of return c. maximizing dividends per share d. maximizing yield to maturity
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Jekyll Company had net income for 2017 of $200,000 and paid preferred dividends of $24,000. During 2017, it reissued treasury common stock for $15,000. The number of shares of common stock outstanding at the beginning and end of 2017 was 60,000 shares. The common stock has no par or stated value. The 2017 amount that ...
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Assume that our trading desk at the New York Fed bank begins with a $3.5 million excess reserve. As a manager at the trading desk, we observe that the number of reserves held by the banking system is greater than the legal minimum. If Treasury deposits at the Fed _____, then we will likely conduct _____ open market ope...
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Galindo Corporation has an ROE of 9.7%, a payout ratio of 55%, and a tax rate of 35%. Its current total assets are $3,000,000, current sales are $4,000,000, and current net profit margin is 5.8%. If the firm's ROE is expected to remain constant, what is the firm's projected total assets level if its sales are expected ...
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This year, Alpine Inc., sold a business property and it had on since 1983 and again at {eq}\$600,000 {/eq}. It also sold a shopping center he developed in 1987 at a loss of {eq}\$900,000 {/eq}. If Alpine has no other section 1231 transactions for the year, as a result of these two transactions it will have what amoun...
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In its first month of operations, Sweet Acacia Industries purchased three materials: 240 lbs. of Material A at a price of $6 per lb., 1,200 lbs. of Material B at $20 per lb., and 100 lbs. of Material C at $50 per lb. Sweet Acacia used 1,200 lbs. of Material A in production, 600 lbs. of Material B, and 50 lbs. of Materi...
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Is the following statement true or false? When a stock pays a constant dividend, its value will vary directly with the discount rate. a. True b. False
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Which of the following is most likely to have a positive externality? A) buying a used car B) building a public beach C) obtaining a driver's license D) getting your teeth cleaned
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Lear Company had $200,000 in cash at year-end 2012 and $175,000 in cash at year-end 2013. The firm had net income of $17,500 for the year and divided cash dividends of $10,000. Using the firm's cash balance information, what is the amount of its net cash flow from financing activities?
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The limit to further expanding the production possibilities frontier can be due to a) increases in labor productivity. b) population growth. c) technological change. d) None of the above.
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In its first month of operation, Sweet Acacia Industries purchased {eq}320 {/eq} units of inventory for {eq}\$5 {/eq}, then {eq}420 {/eq} units for {eq}\$6 {/eq}, and finally {eq}360 {/eq} units for {eq}\$7 {/eq}. At the end of the month, {eq}400 {/eq} units remained. Compute the amount of phantom profit that wo...
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Beta Industries is considering a project with an initial cost of $8.3 million. The project will produce cash inflows of $2.32 million a year for seven years. The firm uses the subjective approach to assign discount rates to projects. For this project, the subjective adjustment is +2.8%. The firm has a pre-tax cost of d...
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ABC will pay a dividend of $3.00, dividends will grow by 8%, risk-free rate is 3.5%, market risk premium is 7%, ABC's beta is 1.25. How much is the stock worth?
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To assess the accuracy of a laboratory scale, a standard weight known to weigh exactly 10 grams is repeatedly weighed a total of n times, and the mean {eq}\bar {x} {/eq} of the weighings is computed. Suppose the scale readings are Normally distributed with unknown mean {eq}\mu {/eq} and standard deviation {eq}\sigma ...
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ABC Company estimates the following for the year: Units produced and sold240,000 Fixed manufacturing overhead$240,000 Variable manufacturing overhead per unit$6.00 Fixed operating expenses$420,000 Variable operating expenses per unit$1.00 Selling price per unit$20.00 The estimated unit cost of product is: a. $18.00....
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Blue Circle Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, Year 2Dec. 31, Year 1 Accounts receivable$21,000$25,200 Inventory61,90075,000 Accounts payable25,20019,800 Dividends payable18,90017,000 Adjust net income of $84,100 for changes in operating assets and li...
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Sitwell Co. has a debt-equity ratio of .50. If it had no debt, its cost equity would be 9%. Its cost of debt is 7%, and the relevant tax rate is 40%. Required: If Sitwell can issue debt at a rate of 6%, what is its cost of equity if it converts to 25% debt?
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A municipal government is considering purchasing a hybrid electric vehicle (HEV) to use on its lawn tractor instead of a traditional gasoline engine (GE) lawn tractor. The government will purchase one of each type of tractor and lease it back for a period of five years. The lease agreement calls for no payments at the ...
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Milton Friedman was a strong proponent of a. labor unions. b. using fiscal policy to help smooth out the business cycle. c. the Taylor rule. d. None of the above.
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Determine the interval on which the function {eq}f(x) = x\sqrt{x^2 + 9} {/eq} is concave down on the interval {eq}-5 \leq x \leq 7{/eq}.
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The size of color 3 balls is twice that of color 4 balls. In the first sample of size 100, 75 balls are color 3. In the second sample of size 100, 25 are color 3. Find the ratio of the number of color 4 balls to the total number of balls.
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Annenbaum Corporation uses the weighted average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 3,000 units. The costs and percentage completion of these units in the beginning inventory were: CostPercent Complete Materials costs$7,90065% Conv...
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A trucking company has been told by its insurance company that its fleet of trucks should be monitored closely if the mean mileage of the trucks is more than 40,000 miles per annum. If the fleet meets this guideline, the insurance premium will be adjusted. The company will have a sample of 50 trucks selected, and if th...
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Blue's Heating & Air reported net income of $85,000 for the year ending December 31, 2015. January 1 balances in accounts receivable and accounts payable were $33,000 and $26,000, respectively. Year-end balances in these accounts were $38,000 and $20,000, respectively. Assuming that all relevant information has been pr...
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A study has been conducted to determine if Product A should be dropped. Sales of the product total $200,000 per year; variable expenses total $140,000 per year. Fixed expenses charged to the product total $90,000 per year. The company estimates that $40,000 of these fixed expenses will continue even if the product is d...
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A 30-year maturity, 8% coupon 10% yield to maturity bond has a duration of _____ years. Assume semi-annual coupon payments. Round the answer to two decimal places.
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The net present value of project A is +$34,000, and that of project B is +$66,000. The combined net present value of projects A and B is?
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Nancy's Used Cars uses the perpetual inventory system and engaged in the following transactions: Purchased 12 used cars for $5,000 each on account. Sold 10 used cars for $12,000 each, on account. What entry should Nancy make to record the sale?
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If Congress increases spending, which of the following might the Fed do? a. lower the interest rate b. increase the money supply c. have no effect because its an increase in government spending d. raise the interest rate e. either increase or decrease the interest rate depending on the situation
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Assume that the CEO of your company has asked you to calculate a "quick ratio" estimate of the company's liquidity. The current ratio is 2.61, and the company's total current assets are $6 million. The company's quick ratio (acid test) is 1.21. How much of the current assets are comprised of inventory? Please express ...
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If at a particular level of output, a firm's average cost is at its minimum, and the average cost is greater than both the average variable cost and the marginal cost, then: a. its average fixed cost is at its minimum b. its marginal cost is at its minimum c. its average fixed cost is increasing d. both its average...
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Consider a Poisson probability distribution with $\lambda = 5.1$. Determine the probability of more than 54 occurrences.
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Assume that the cost of producing {eq}x{/eq} units of a particular commodity is {eq}C(x) = \sqrt{100x + 700}{/eq} dollars. Use {eq}MC{/eq} to approximate the cost of producing the 26th unit.
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Pluto Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools-Mixing, Processing, and Other. The costs in those activity cost pools appear below: Mixing $65,750 Processing $102,820 Other $30,000 The Mixing costs are ass...
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Which of the following is correct? a. A financial market will always have the highest possible value to a firm b. The cost of capital may be higher or lower than the actual cost of new financing c. The cost of long-term debt equals the coupon interest rate d. There is a trade-off between risk and return in the capi...
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As the proportion of labour contracts that index wages to prices declines, we would expect that: (a) the natural rate of unemployment will decrease. (b) the natural rate of unemployment will increase. (c) a reduction in the unemployment rate will now have a smaller effect on inflation. (d) nominal wages will become...
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At year end, Salaries Payable was $40,000. During the year, Salaries Payable decreased by $8,000. What was the amount of accrued salaries expense on the income statement? a. $40,000 b. $32,000 c. $48,000 d. Can not determine from information given.
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Given a pollster wishes to estimate the number of left-handed scientists, and a random sample of 72 scientists generated the following confidence interval for the proportion of left-handed scientists: (0.12, 0.16). How large a sample is needed in order to be 99% confident that the sample proportion will not differ from...
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For a particle in an infinite potential well (0<x<L), show that the lowest energy is obtained when the particle is in the ground state (n=1). To do this, calculate the expectation value of the energy {eq}\langle E\rangle {/eq} for an arbitrary wave function {eq}\psi (x)=Ax( L-x) {/eq} and find the value of A that mak...
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Suppose the Federal Reserve purchases $1,000,000 of government bonds when the desired reserve ratio is 10 percent and the currency drain ratio is 40 percent. What is the maximum amount (in $) that this bond purchase could increase the money supply?
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The salaries at Company X are normally distributed. If Company X wants no more than 5% of the employees to have salaries of more than $60,000, to what value should they set the mean salary (assuming the standard deviation is $20,000)?
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What is the radius of convergence of the series: $ \sum_{n=1}^\infty (1- \frac{1}{2n} )^n z^n $?
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A zero-coupon bond has a face value of $1000 and a market price of $970 when it has 6 years to maturity. What is its yield-to-maturity?
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The Charlotte Company purchased land and a building on January 1, 2011. The company paid $510,000 in total and the land was appraised at $240,000 and the building at $360,000. On December 31, 2011, before any adjusting and closing entries were made, the Accumulated Depreciation account had a balance of $140,000, and th...
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Production possibilities curves reflect: A. Constant opportunity costs if technology is held constant, no matter what skills the factors of production have. B. Maximum efficiency in the production of all outputs, given that technology does not change. C. Opportunity costs in production, given technology and varying ...
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The previous question asked: What is the expected number of levels an item will be after I spend 50 Gems, given that the expected number of levels to raise an item from +0 to +8 is 20, and we can model the number of levels gained from spending Gems as a discrete random variable with a geometric distribution, where $p ...
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The VCR manufacturing business is perfectly competitive. Suppose that currently, firms that manufacture VCRs utilize either technology 1 or technology 2, whose cost functions are TC1(Q) = 340 - 20Q + Q2 TC2 (Q) = 405 - 30Q + Q2 In the long run, assuming no new manufacturing technologies, what will happen in this ind...
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Imagine an economy that has a tax rate of 10% and a social security payroll tax of 5%. The government then increases the tax rate to 20% and the social security payroll tax rate to 10%. If those changes cause the economy's real GDP to rise, we can conclude that: A) the increase in the tax rates increased the slope of ...
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Your company is considering a new project which you must analyze. Based on the following data, what is the project's Year 1 operating cash flow? Sales revenue $42,500 Depreciation $10,000 Other costs $17,000 Tax rate 35% a. $18,225 b. $23,115 c. $23,215 d. $17,025 e. $24,315
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Consider the demand curve of the form Q = a - bP. If a is a positive real number, and b = 0, then the inverse demand curve is: a. a vertical line. b. A horizontal line. c. not defined. d. none of the above.
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Good Morning Food, Inc. is using the profitability index (PI) when evaluating projects. The company's cost of capital is 9.31 percent. The initial outlay for the project is $365,898. The project will produce the following end-of-the-year after-tax cash inflows of; Year 1, $129,659 Year 2, $57,705 Year 3, $138,583 Year ...
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If an increase in the money supply reduces the real interest rate, then: A. The long-run Phillips curve and short-run Phillips curve shift left. B. The long-run Phillips curve and short-run Phillips curve shift right. C. The long-run Phillips curve shifts left and the short-run Phillips curve shifts right. D. The l...
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Patricia Co. provides for doubtful accounts based on 4% of gross accounts receivable. The following data are available for 2017. Credit sales during 2017 $4,240,000 Bad debt expense 57,000 Allowance for doubtful accounts 1/1/17 17,000 Collection of accounts written off in prior years (customer credit was reestablishe...
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A manager at Strateline Manufacturing must decide on the optimum number of production lines to use in a manufacturing process. The probability density function for production of the product is: f(x) = 2.0 for 0.000 < x < 0.500 f(x) = 0 for x < 0.000 and x > 0.500 Assume there is no waiting time, and Strateline Manuf...
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An analyst gathered the following data about the P/E ratio of a company. Annual P/E ratio 8, 6, 9, 7, 13, 11, 10, 9, 11, 7, 9, 12 The standard error of the sample mean is closest to: A. 0.67. B. 0.93. C. 1.14.
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Find the exact value of the expression without a calculator: {eq}\cos \frac {5 \pi}{12} + i \sin \frac {5 \pi}{12} {/eq}
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A firm uses capital ({eq}K {/eq}) and Labor ({eq}L {/eq}) to produce its output, according to the following production function: {eq}Q = K^{\frac{1}{2}} L^{\frac{1}{3}} {/eq} The price of capital is {eq}r {/eq} per unit and the price of labor is {eq}w {/eq} per unit. The total cost of production is {eq}c {/eq}....
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Find the standard deviation of the sampling distribution of the sample mean for each situation: Mean = 100, standard deviation = 16; n = 64.
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The mean height of women in a country (ages 20-29) is 63.2 inches. A random sample of 85 women in this age group is selected. What is the probability that the mean height for the sample is greater than 64 inches? Assume the standard deviation is 2.76. The probability is __________.
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Use the central limit theorem to estimate the probability that more than 950 people out of a sample of 1500 have health insurance, given that 60% of Americans have health insurance.
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A particle moves along line segments from the origin to the points {eq}(2,0,0),(2,5,1),(0,5,1) {/eq}, and back to the origin under the influence of the force field {eq}F(x,y,z)=z^2i+3xyj+3y^2k {/eq}. Find the work done. {eq}\oint_{C}F\cdot dr= {/eq}
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A company repays a 15-year, 9% loan of $1,000,000 by making annual payments of principal of $50,000 plus interest on the unpaid principal. How much total interest is paid over the life of the loan? a. $750,000 b. $689,210 c. $500,000 d. $643,210
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Last month, Model Magic Manufacturing incurred the following costs: Purchases of direct materials $16,000 Direct labor 25,000 Total factory overhead 25,000 Selling and administrative expenses 21,000 Net income 29,000 The compan...
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Which of the following is a requirement for a company to be eligible to use the cash method of accounting? a. The company must have annual gross sales of less than $5 million. b. The company must have more than half of its customers that are eligible to use the cash method. c. The company must prepare its financial ...
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John's Sporting Goods Company paid cash dividends of $1.70 per share. During the year the company also had a stock repurchase totaling $7.50 per share. What is the firm's total payout ratio for the year?
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Find the area of the surface generated by revolving the curve about the x axis, where x=t+2√3, y=t^2/2+2√3t, for -2√3≤t≤2√3.
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Pat Company has the opportunity to invest in a new project, the details of which are shown below. How many years will it take for Pat to recover its initial investment? Amount invested in project: $65,000 Annual cash inflows: $32,500 Discount rate: 10%
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Which of the following deposit accounts would you expect to have the most restrictive overdraft protection arrangement? a) a business account with a checking float and a large number of nondeposit transaction customers b) a business account with a very large average daily balance c) a business account with a checkin...
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There are three main streets, one leading to a restaurant, and two leading to a bar. How many possible ways are there for a person to go from the person's home to work, and back, if they have to go through the restaurant and the bar, respectively, at least once during the round trip?
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If {eq}p(x) = \frac{0.1e^x}{\ln(x)}{/eq}, evaluate {eq}p'(9){/eq} to the nearest tenth.
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Suppose two stocks have a correlation of 1. One stock has a standard deviation of 20% and the other has a standard deviation of 30%. If 40% of funds are invested in the stock with the 20% standard deviation, what will be the portfolio standard deviation? A. 10%. B. 20%. C. 30%. D. 22%.
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Assume a firm has fixed costs of $80 and variable costs as given in the following table: Quantity (Q) Total Variable Cost (TVC) 0 $0 1 $40 2 $75 3 $105 4 $130 5 $150 6 $180 7 $230 Calculate the firm's AFC at the 7-unit level of output.
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South Pole Industries uses a weighted-average perpetual inventory system. Each item has a unique inventory number. The following are all transactions involving the sale or purchase of these inventory items. Mar. 1: Beginning balance of 100 units @ $5 Mar. 5: Purchase of 50 units @ $6 Mar. 15: Sale of 40 units Mar. ...
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