6. Make revenue forecast for Pacific Shoes for 2020 based on historical data if the company generated the following revenues for the last five years. Calculate the forecast error, draw a graph with the actual and forecasted revenue by year, and show the forecast error on the graph.

Year.                      2015 2016 2017 2018 2019
Revenue (Million $) 23 27    27        32.     30

a. The marketing manager for an automobile manufacturer is interested in determining the proportion of new compact-car owners who would have purchased a passenger-side inflatable air bag if it had been available for an additional cost of $300. The manager believes from previous information that the proportion is 0.30. Suppose that a survey of 200 new compact-car owners is selected and 79 indicate that they would have purchased the inflatable air bags. If you were to conduct a test to determine whether there is evidence that the proportion is different from 0.30 and decided not to reject the null hypothesis, what conclusion could you draw?

Write your conclusion below. You have to just write your conclusion and not all 7-steps as per our 7-steps method.

b. The owner of a local nightclub has recently surveyed a random sample of n = 25 customers of the club. She would now like to determine whether or not the mean age of her customers is over 35. If so, she plans to alter the entertainment to appeal to an older crowd. If not, no entertainment changes will be made. Suppose she found that the sample mean was 38 years and the sample standard deviation was 3.5 years. What is the p-value associated with the test statistic? You need to show your calculations for p value below including any graphs that you need to draw.

c. A pharmaceutical company has come up with a new drug and has applied for FDA approval. To approve the drug, FDA must find that it is safe for patients. What would be a Type II error in this case? You need to write the statement for Type II error by QMB 500 first formulating a null and alternate hypothesis. (Hint: See a similar problem like this in practice questions for Chapter 9).

d. Suppose, in testing a hypothesis about a proportion, the Z test statistic is computed to be 2.04.

What should be your decision about the null hypothesis if the chosen level of significance is 0.01 and a two-tailed test is used?

Write your decision below and provide reason for your decision along with any relevant calculations to support your decision. Do not write all 7-steps from the 7-step method discussed in the class.

a. The marketing manager for an automobile manufacturer is interested in determining the proportion of new compact-car owners who would have purchased a passenger-side inflatable air bag if it had been available for an additional cost of $300. The manager believes from previous information that the proportion is 0.30. Suppose that a survey of 200 new compact-car owners is selected and 79 indicate that they would have purchased the inflatable air bags. If you were to conduct a test to determine whether there is evidence that the proportion is different from 0.30 and decided not to reject the null hypothesis, what conclusion could you draw? Write your conclusion below. You have to just write your conclusion and not all 7-steps as per our 7-steps method.

b. The owner of a local nightclub has recently surveyed a random sample of n = 25 customers of the club. She would now like to determine whether or not the mean age of her customers is over 35. If so, she plans to alter the entertainment to appeal to an older crowd. If not, no entertainment changes will be made. Suppose she found that the sample mean was 38 years and the sample standard deviation was 3.5 years. What is the p-value associated with the test statistic? You need to show your calculations for p value below including any graphs that you need to draw.

c. A pharmaceutical company has come up with a new drug and has applied for FDA approval. To approve the drug, FDA must find that it is safe for patients. What would be a Type II error in this case? You need to write the statement for Type II error by QMB 500 first formulating a null and alternate hypothesis. (Hint: See a similar problem like this in practice questions for Chapter 9).

d. Suppose, in testing a hypothesis about a proportion, the Z test statistic is computed to be 2.04. What should be your decision about the null hypothesis if the chosen level of significance is 0.01 and a two-tailed test is used? Write your decision below and provide reason for your decision along with any relevant calculations to support your decision. Do not write all 7-steps from the 7-step method discussed in the class.

For 2017, Permatemp reported the following book income statement and balance sheet, excluding the federal income tax expense, deferred tax assets, and deferred tax liabilities:

Additional information for 2017: • Because of limitations, $30,000 of the meals and entertainment expenses will be disallowed for tax purposes.

• Depreciation for tax purposes is $2.45 million under MACRS.

• Bad debt expense for tax purposes is $425,000 under the direct write-off method.

• Ignore the U.S. production activities deduction

• The corporate tax rate in 2017 was 34%. • At the end of 2017, Congress reduced the corporate tax rate to 21% effective for 2018.

a. Prepare page 1 of the 2017 Form 1120, computing the corporation’s taxable income and tax liability.

b. Determine the corporation’s deferred tax asset and deferred tax liability situation, and then complete the income statement and balance sheet to reflect proper GAAP accounting ASC 740. Because of the enacted tax rate change, deferred assets and liabilities at the end of 2017 will need to be valued at 21%. Use the balance sheet information to prepare Schedule L of the 2017 Form 1120.

c. Prepare the 2017 Schedule M-3 for Form 1120. d. Prepare a schedule that reconciles the corporation’s effective tax rate to the statutory 34% tax rate. This schedule will need a line to reflect the change in the future tax rate.

For a given incremental increase in revenue from each of the following sources of growth, which would generally create the most shareholder value?

a. Reducing costs.

b. Acquiring businesses.

c. Expanding an existing market.

d. Introducing new products to market.

A retail sales tax on remote sellers will produce as much revenue as a use tax on in-state purchasers.

T/F

Revenue generally should be recognized