Use a normal distribution to estimate the probability of more than 55 girls being born in 100 births. Assume that the probability of a girl being born in an individual birth is 50%.

What would you tell a 17 year old girl who is considering an abortion? What is one, and what is it that many young girls experience after having one?

Decide whether the experiment is a binomial experiment. If it is not, explain why. You observe the gender of the next 50 babies born at a local hospital. The random variable represents the number of girls.

True, False, or Uncertain.

Acid rain was the topical pollution concern during the 1990s. It was caused by pollutants released into the air (cars, industry, etc). The Coase Theorem is applicable in this case as bargaining can lead to the socially optimal outcome, namely no acid rain.

a) What is underwriting? Describe the underwriting process. Who assumes the risk?
b) What role does a syndicate play in the underwriting process?
c) Investment fund management has become big business in the 1990s. What trends are driving the expansion of this business?

Peninsula Tour Company is located in a tourist town on Georgian Bay. The small town is quiet during the winter months but comes alive with tourists from May to October. The company is planning for another season of tours to Flowerpot Island, an attractive island because of rock formations on its shoreline that resemble flowerpots. Customers pay for a tour to the island where they are left to hike, and as part of the ticket price they are provided with a return ride later in the day. The tickets are purchased from the boat operator as they board each boat, which can take a maximum of 12 passengers.

For the coming 2019 season, management is considering selling souvenirs. When returning from the island and leaving the boat, passengers must walk along the dock and exit at a common spot. The plan for the new season is to place a booth selling souvenirs of the island (i.e., a paperweight in the shape of a natural flowerpot) at the end of the dock. Based on a one-month trial run of a similar idea last year, management estimates 75% of passengers will purchase a souvenir.

Predicted 2019 monthly tour demand (number of passengers) based on prior year experience follows:

Note: Sales activity occurs evenly throughout each month – assume 30 day months.

The company will run advertisements in a local newspaper at a cost of $180 per month (payable monthly in advance). The company estimates that these ads would increase demand by about 10%.

Additional financial data for summer 2019 follows:

Tickets for boat tours sell for $25 each. All sales will be in cash.

Sales price for souvenirs will be $1.75 each. All sales will be in cash.

Cost of goods sold will be $0.70 per souvenir, payable on account one month after delivery. The supplier requires an advance seasonal estimate, but actual orders can be placed at the beginning of each month for guaranteed same-day delivery; souvenirs are purchased in boxes of 144 units per box.

Docking fees (for ticket sales and boat docking space) are $1,600 per month on a minimum six-month contract, payable monthly in advance (only one docking space is required).

Boat rental is $2,550/boat per month, paid one month in advance. Boats are rented as needed on one-month contracts, one boat is required for every 12 customers expected each day (assuming 30 day months). Gasoline is purchased and paid each morning; the total used is $850 per boat each month.

Wages are $2,000 per month for boat operators and $1,100 per month for souvenir sales employees, paid during the first week of the month following the month worked. One person is required to staff a single souvenir booth, and one operator is required for each boat. (Note: to avoid requiring on person to work every day, two employees will be hired for each position and they will work alternate days to earn half the monthly rate.)

There are no capital expenditures planned for 2019.

Money can only be borrowed or repaid in multiples of $1,000 at the beginning of the month, at a cost of 1% interest per month. Interest is paid on the first day of the month following the month borrowed.

The company will end the year with no inventory (units remaining will be donated to a local school) given they have the current year (2018) printed on them and will be of no use the following year (there is no beginning inventory).

Income taxes and other incidental charges are to be ignored.

Required:

a. Prepare a monthly budgeted income statement for the six month period ending October 31, 2019.

b. Prepare a materials purchases budget for souvenirs.

c. Prepare a monthly cash budget for the eight-month period beginning in April through to November (note: the ending monthly cash balance cannot drop below zero resulting in a periodic need for borrowing). Hint, borrow $7,000 in April to start the month with a $7,000 cash balance.

d. Prepare monthly budgeted balance sheets for April 30, 2019, through October 31, 2019.

e. Budgeting can be used for planning as well as control. In terms of planning, would you advise management to start selling souvenirs in May? Hint: break-even analysis will assist in answering this question.

Most analysts think that the US$ was overvalued in the 1990s and 2000s. This is certainly suggested by the persistent trade deficits run between the US and the rest of the world. What accounts for the persistent high value of the US$? What impact does the high value have on GDP and inflation in the US?

It is no secret that U.S. labor productivity accelerated in the second half of the 1990s. The bulk of the spurt can be traced to the boom in investment information technology capital and to the growth in the information technology-producing part of the economy. Measurement issues abound and having better data would help resolve them. Whether or not the change in productivity is cyclical or structural is too soon to tell. Do you think that US economy will experience higher labor productivity soon?

Briefly discuss.

It is no secret that U.S. labor productivity accelerated in the second half of the 1990s. The bulk of the spurt can be traced to the boom in investment information technology capital and to the growth in the information technology-producing part of the economy. Measurement issues abound and having better data would help resolve them. Whether or not the change in productivity is cyclical or structural is too soon to tell. Do you think that US economy will experience higher labor productivity soon? Briefly discuss.