Question
In: Finance
Hooper Chemical Company, a major chemical firm that uses such raw materials as carbon and petroleum...
Hooper Chemical Company, a major chemical firm that uses such
raw materials as carbon and petroleum as part of its production
process, is examining a plastics firm to add to its operations.
Before the acquisition, the normal expected outcomes for the firm
were as follows:
| Outcomes ($ millions) |
Probability | |||||
| Recession | $ | 20 | 0.2 | |||
| Normal economy | 30 | 0.2 | ||||
| Strong economy | 50 | 0.6 | ||||
Compute the expected value, standard deviation, and coefficient of variation prior to the acquisition.
Solutions
Expert Solution
| a | b | c=a*b | d=a*(b-94)^2 | |
| State of economy | Probability | Rate of returns | Expected value | Variance |
| Recession | 0.20 | 20.00 | 4.00 | 1,095.20 |
| Normal economy | 2.00 | 30.00 | 60.00 | 8,192.00 |
| Strong economy | 0.60 | 50.00 | 30.00 | 1,161.60 |
| Total | 94.00 | 10,448.80 | ||
| Expected value = | 94.00 | |||
| Standard deviation = 10448.8^0.5 = | 102.22 | |||
| coefficient of variation = SD/Mean = 102.22/94 | 1.09 |
jeff jeffy answered 1 year agoRelated Solutions
Hooper Chemical Company, a major chemical firm that uses such raw materials as carbon and petroleum...
Hooper Chemical Company, a major chemical firm that uses such
raw materials as carbon and petroleum as part of its production
process, is examining a plastics firm to add to its operations.
Before the acquisition, the normal expected outcomes for the firm
were as follows: Outcomes ($ millions) Probability Recession $ 40
0.2 Normal economy 60 0.1 Strong economy 80 0.7
Compute the expected value, standard deviation, and coefficient
of variation prior to the acquisition. (Do not round intermediate
calculations....
Hooper Chemical Company, a major chemical firm that uses such raw materials as carbon and petroleum...
Hooper Chemical Company, a major chemical firm that uses such
raw materials as carbon and petroleum as part of its production
process, is examining a plastics firm to add to its operations.
Before the acquisition, the normal expected outcomes for the firm
were as follows:
Outcomes
($ millions)
Probability
Recession
$
10
0.2
Normal economy
50
0.4
Strong economy
70
0.4
Compute the expected value, standard deviation, and coefficient
of variation prior to the acquisition. (Do not round
intermediate...
Hooper Chemical Company, a major chemical firm that uses such raw materials as carbon and petroleum...
Hooper Chemical Company, a major chemical firm that uses such
raw materials as carbon and petroleum as part of its production
process, is examining a plastics firm to add to its operations.
Before the acquisition, the normal expected outcomes for the firm
were as follows:
Outcomes
($ millions)
Probability
Recession
$
35
.4
Normal economy
55
.2
Strong economy
75
.4
Compute the expected value, standard deviation, and coefficient
of variation prior to the acquisition. (Do not round
intermediate...
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The Polaris Company uses a job-order costing system. The following transactions occurred in October: Raw materials...
The Polaris Company uses a job-order costing system. The
following transactions occurred in October:
Raw materials purchased on account, $209,000.
Raw materials used in production, $191,000 ($152,800 direct
materials and $38,200 indirect materials).
Accrued direct labor cost of $49,000 and indirect labor cost of
$21,000.
Depreciation recorded on factory equipment, $106,000.
Other manufacturing overhead costs accrued during October,
$130,000.
The company applies manufacturing overhead cost to production
using a predetermined rate of $8 per machine-hour. A total of
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The Polaris Company uses a job-order costing system. The following transactions occurred in October: Raw materials...
The Polaris Company uses a job-order costing system. The
following transactions occurred in October:
Raw materials purchased on account, $210,000.
Raw materials used in production, $191,000 ($152,800 direct
materials and $38,200 indirect materials).
Accrued direct labor cost of $48,000 and indirect labor cost of
$21,000.
Depreciation recorded on factory equipment, $106,000.
Other manufacturing overhead costs accrued during October,
$129,000.
The company applies manufacturing overhead cost to production
using a predetermined rate of $6 per machine-hour. A total of
76,400 machine-hours...
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