In December 2019, Bob Prescott, the controller for the Blue Ridge Mill, was considering the addition of new on-site long-wood woodyard. The addition would have two primary benefits: to eliminate the need to purchase short-wood from an outside supplier and create the opportunity to sell short-wood on the open market as a new market for Worldwide Paper Company (WPC). The new woodyard would allow the Blue Ridge Mill not only to reduce its operating costs but also to increase its revenues. The proposed woodyard will utilise new technology that allows tree-length logs, called long-wood, to be processed directly, whereas the current process required short-wood, which had to be purchased from the Shenandoah Mill.

This nearby mill, owned by a competitor, has excess capacity that allows it to produce more short-wood than it needs for its own pulp production. The excess is sold to several different mills, including the Blue Ridge Mill. Thus, adding the new long-wood equipment would mean that Prescott would no longer need to use the Shenandoah Mill as a short-wood supplier and that the Blue Ridge Mill would instead compete with the Shenandoah Mill by selling on the short-wood market. The question for Prescott was whether these expected benefits were enough to justify the $18m capital outlay plus the incremental investment in working capital over the six-year life of the investment.

Construction would start within a few months, and the investment outlay would be spent over two calendar years: $16m in 2020 and the remaining $2m in 2021. When the woodyard begins operating in 2021, it would significantly reduce the operating costs of the mill. These operating savings would come mostly from the difference in the cost of producing short-wood on-site versus buying it on the open market and were estimated to be $2m for 2021 and $3.5m per year thereafter.

Prescott also planned on taking advantage of the excess production capacity afforded by the new facility by selling short-wood on the open market as soon as possible. For 2021, he expected to show revenues of approximately $14m, as the facility came on-line and began to break into the new market. He expected shortwood sales to reach $20m in 2022 and continue at the $20m level through 2026. Prescott estimated that the cost of goods sold (before including depreciation expense) would be 75%.

In addition to the capital outlay of $18m, the increased revenues would necessitate higher levels of inventories and accounts receivable. Therefore the amount of working capital investment each year would equal 15% of incremental sales for the year. At the end of the life of the equipment, in 2026, all the net working capital on the books would be recoverable at cost fully. Taxes would be paid at a 30% rate, and the equipment depreciation is to be calculated on a straight-line basis over the six-year life to zero balance. However, the new equipment is estimated to have a salvage value (scrap value) of $3m at the end of its life. WPC’s accountants have told Prescott that depreciation charges could not begin until 2021, when all the $18m had been spent and the equipment is in service.

Prepare cash flow statement/s and compute the NPV and IRR of the proposed project. Comment on the feasibility of the project (（the cash flow involves 2020-2026, but exclude 15% hurdle rate in NPV calculation, want to know each year working capital how to calculate in cash flow statement )

You take a quiz with 6 multiple choice questions. After you​ studied, you estimated that you would have about an​ 80% chance of getting any individual question right. What are your chances of getting them all​ right? The random numbers below represent a simulation with 20 trials. Let​ 0-7 represent a correct answer and let​ 8-9 represent an incorrect answer.

1, 6   5   6   2   0   5
2, 4   7   3   1   6   6
3, 5   2   9   6   3   2
4, 8   0   1   6   0   8
5, 3   4   3   3   4   4
6, 2   9   1   7   3   0
7, 6   5   9   6   8   3
8, 8   6   4   4   2   7
9, 6   1   1   8   2   6
10, 5   3   0   3   8   6
11, 0   2   8   1   3   2
12, 6   8   6   0   0   4
13, 9   9   4   6   1   8
14, 1   7   3   2   5   1
15, 7   6   6   1   4   5
16, 3   5   3   1   4   5
17, 0   2   7   7   3   1
18, 3   6   1   6   1   0
19, 8   4   6   7   1   3
20, 5   3   5   2   0   9

22. Alex Wall is shopping for a new four-wheel-drive utility vehicle and has identified three models from which she will choose—an Explorer, a Trooper, and a Passport. She will make her selection based on Consumer Digest ratings, price, and each vehicle’s appearance. Following are Alex’s pairwise comparisons for the vehicles for each of her criteria and her criteria preferences:

Using AHP, determine which vehicle Alex should purchase.

Calculate the SVD of matrix A =

by hand and find the rank 1 approximation of A

2. Use the Taylor series for ?(?) = 1 / ?² centered at x₀ = 1 to find the seventh-degree polynomial of ?(?)

Prove that 1^3 + 2^3 + · · · + n^3 = (1 + 2 + · · · + n)^2 for every n ∈ N. That is, the sum of the first n perfect cubes is the square of the sum of the first n natural numbers. (As a student, I found it very surprising that the sum of the first n perfect cubes was always a perfect square at all.)

Given x = (-2, -1, 0, 1, 2) and response y = (0, 0, 1, 1, 3) consider 2 models where the error e is normally distributed N(0,sigma^2)

Model 1:  y = β0 + β1*X + e

Model 2: y = β0 + β1*(X^2) + e

Questions:

1). Find β0Hat and β1Hat for Model 1 and Model 2.

2). Estimate σ^2, and find the variances of the estimators β0Hat and β1Hat for Model 1 and Model 2.

3). Test H0: β1Hat = 0 against H1: β1Hat not equal 0 for both models. Use alpha = 0.05

1. Consider the applications for home mortgages data in the file of P12_04.xlsx.

1. Create a time series chart of the dat
2. Use simple exponential smoothing to forecast these data, using the default smoothing constant of 0.1
3. Calculate the three types of forecast errors, RMSE, MAE, and MAPE
4. Use the solver function in excel to optimize the smoothing constant in order to generate a minimum MAPE value.
5. Use multiple regression to develop an equation that can be used to predict future applications for home mortgages (hint: use dummy variables for the quarters and create a time variable for the quarter numbers)

Silver Cloud Computing is a company that provides cloud computing services. The company commenced operations on March 1, 2016. It acquired financing from the issuance of common stock for $40,000,000 and issuance of 4% bonds that mature in 2026 for $30,000,000. The income statements and balance sheets for the first two years are provided in a separate Excel spreadsheet. All amounts are in thousands.

Required:

The Chief Executive Officer (CEO) is interested in increasing sales and decreasing expenses. You have been requested to prepare a report that provides analysis of the financial statements and recommendations to improve the financial performance of the company. Your report should include the following items:

Calculate the following ratios and provide an analysis of the company based on the ratios: (Show Work)

Days Sales Outstanding=

Profit Margin=

Asset Turnover=

Return on Assets=

Financial Leverage=