An automobile manufacturer claims that their van has a 46.4 miles/gallon (MPG) rating. An independent testing firm has been contracted to test the MPG for this van. After testing 140 vans they found a mean MPG of 46.0. Assume the standard deviation is known to be 2.6. Is there sufficient evidence at the 0.02 level that the vans underperform the manufacturer's MPG rating? Step 2 of 5: Enter the value of the z test statistic. Round your answer to two decimal places.
In: Statistics and Probability
Lon Timur is an accounting major at a midwestern state
university located approximately 60 miles from a major city. Many
of the students attending the university are from the metropolitan
area and visit their homes regularly on the weekends. Lon, an
entrepreneur at heart, realizes that few good commuting
alternatives are available for students doing weekend travel. He
believes that a weekend commuting service could be organized and
run profitably from several suburban and downtown shopping mall
locations. Lon has gathered the following investment
information.
| 1. | Five used vans would cost a total of $74,000 to purchase and would have a 3-year useful life with negligible salvage value. Lon plans to use straight-line depreciation. | ||
| 2. | Ten drivers would have to be employed at a total payroll expense of $48,010. | ||
| 3. | Other annual out-of-pocket expenses associated with running the commuter service would include Gasoline $16,010, Maintenance $3,290, Repairs $4,000, Insurance $4,190, and Advertising $2,510. | ||
| 4. | Lon has visited several financial institutions to discuss funding. The best interest rate he has been able to negotiate is 15%. Use this rate for cost of capital. | ||
| 5. | Lon expects each van to make ten round trips weekly and carry an average of six students each trip. The service is expected to operate 30 weeks each year, and each student will be charged $12.05 for a round-trip ticket. |
Click here to view PV table.
(a)
Determine the annual (1) net income and (2) net annual cash flows
for the commuter service. (Round answers to 0 decimal
places, e.g. 125.)
| Net income | ? | $ | |
| Net annual cash flows | ? | $ |
(b)
Compute (1) the cash payback period and (2) the annual rate of
return. (Round answers to 2 decimal places, e.g.
10.50.)
| Cash payback period | ? | years | |
| Annual rate of return | ? | % |
(c)
Compute the net present value of the commuter service.
(Round answer to 0 decimal places, e.g. 125. If the net
present value is negative, use either a negative sign preceding the
number eg -45 or parentheses eg (45). For
calculation purposes, use 5 decimal places as displayed in the
factor table provided.)
| Net present value | ? |
In: Accounting
Lon Timur is an accounting major at a midwestern state
university located approximately 60 miles from a major city. Many
of the students attending the university are from the metropolitan
area and visit their homes regularly on the weekends. Lon, an
entrepreneur at heart, realizes that few good commuting
alternatives are available for students doing weekend travel. He
believes that a weekend commuting service could be organized and
run profitably from several suburban and downtown shopping mall
locations. Lon has gathered the following investment
information.
| 1. | Five used vans would cost a total of $74,000 to purchase and would have a 3-year useful life with negligible salvage value. Lon plans to use straight-line depreciation. | ||
| 2. | Ten drivers would have to be employed at a total payroll expense of $47,990. | ||
| 3. | Other annual out-of-pocket expenses associated with running the commuter service would include Gasoline $15,990, Maintenance $3,290, Repairs $3,990, Insurance $4,190, and Advertising $2,490. | ||
| 4. | Lon has visited several financial institutions to discuss funding. The best interest rate he has been able to negotiate is 15%. Use this rate for cost of capital. | ||
| 5. | Lon expects each van to make ten round trips weekly and carry an average of six students each trip. The service is expected to operate 30 weeks each year, and each student will be charged $11.95 for a round-trip ticket. |
Click here to view PV table.
(a)
Determine the annual (1) net income and (2) net annual cash flows
for the commuter service. (Round answers to 0 decimal
places, e.g. 125.)
| Net income | $ | ||
| Net annual cash flows | $ |
(b)
Compute (1) the cash payback period and (2) the annual rate of
return. (Round answers to 2 decimal places, e.g.
10.50.)
| Cash payback period | years | ||
| Annual rate of return | % |
(c)
Compute the net present value of the commuter service.
(Round answer to 0 decimal places, e.g. 125. If the net
present value is negative, use either a negative sign preceding the
number eg -45 or parentheses eg (45). For
calculation purposes, use 5 decimal places as displayed in the
factor table provided.)
| Net present value |
In: Accounting
Miles Hardware has an annual cash dividend policy that raises the dividend each year by 10%. Last year's dividend, Div 0, was $ 1.50 per share. Investors want a return of 18% on this stock. What is the stock's price if
a. the company will be in business for 10 years and not have a liquidating dividend?
b. the company will be in business for 20 years and not have a liquidating dividend?
c. the company will be in business for 30 years and not have a liquidating dividend?
d. the company will be in business for 40 years and not have a liquidating dividend?
e. the company will be in business for 80 years and not have a liquidating dividend?
f. the company will be in business forever?
a. What is the price of this stock if the company will be in business for 10 years and not have a liquidating dividend?
In: Finance
Miles Hardware has an annual cash dividend policy that raises the dividend each year by 12%. Last year's dividend, Div0, was $1.50 per share. Investors want a return of 17% on this stock. What is the stock's price if
a. the company will be in business for 5 years and not have a liquidating dividend? $________ (Round to the nearest cent.)
b. the company will be in business for 15 years and not have a liquidating dividend? $________ (Round to the nearest cent.)
c. the company will be in business for 30 years and not have a liquidating dividend? $________ (Round to the nearest cent.)
d. the company will be in business for 40 years and not have a liquidating dividend? $________ (Round to the nearest cent.)
e. the company will be in business for 70 years and not have a liquidating dividend? $________ (Round to the nearest cent.)
f. the company will be in business forever? $________ (Round to the nearest cent.)
In: Finance
When traveling 40 mph (miles per hour), the distance that it takes Fred’s car to stop varies evenly between 120 and 155 feet. (This includes the reaction distance and the braking distance.) All of the questions are related to the stopping distance when Fred is traveling 40 mph.
a) Let S be the distance it takes for Fred’s car to stop at when traveling 40 mph. Find the distribution, parameter(s), and support of S.
b) What is the probability that it takes between 115 and 138 feet for the car to stop?
c) Find the expected distance it will take Fred to stop and the standard deviation of the stopping distance.
d) What values represent the middle 60% of Fred’s stopping distances?
e) Suppose a squirrel darts into the road as Fred is driving, and when Fred finally sees the squirrel and applies the brakes, the squirrel is 131 feet away. What is the probability that the squirrel survives its encounter with Fred (i.e. that Fred stops before he hits the squirrel)?
f) Fred knows that when it rains, it will take a minimum of 127 feet to stop. Fred is out driving while it is raining. If there is a stop sign that is 135 feet away, what is the probability that Fred stops in time?
In: Math
Two firms produce a similar product and are located 20 miles apart along a linear market.
They have a constant marginal and average variable cost equal to 5 dollars per unit of output. It
costs one dollar to transport the product one mile. Consumers are uniformly distributed along the
market. Draw a graph of the market and indicate the optimal price for each firm to charge, how
much of the market each firm serves, and how much profits each firm receives. Explain how this
model generalizes to a circular market with free entry and variable location. What role do profits
play in establishing an equilibrium in the generalized model.
In: Economics
Miles Hardware has an annual cash dividend policy that raises the dividend each year by 11%. Last year's dividend, Div0, was $1.50 per share. Investors want a return of 17% on this stock. What is the stock's price if
a. the company will be in business for 5 years and not have a liquidating dividend?
b. the company will be in business for 15 years and not have a liquidating dividend?
c. the company will be in business for 30 years and not have a liquidating dividend?
d. the company will be in business for 50 years and not have a liquidating dividend?
e. the company will be in business for 90 years and not have a liquidating dividend?
f. the company will be in business forever?
In: Finance
Lon Timur is an accounting major at a midwestern state university located approximately 60 miles from a major city. Many of the students attending the university are from the metropolitan area and visit their homes regularly on the weekends. Lon, an entrepreneur at heart, realizes that few good commuting alternatives are available for students doing weekend travel. He believes that a weekend commuting service could be organized and run profitably from several suburban and downtown shopping mall locations. Lon has gathered the following investment information.
1. Five used vans would cost a total of $74,970 to purchase and would have a 3-year useful life with negligible salvage value. Lon plans to use straight-line depreciation.
2. Ten drivers would have to be employed at a total payroll expense of $48,000.
3. Other annual out-of-pocket expenses associated with running the commuter service would include Gasoline $16,000, Maintenance $3,600, Repairs $4,000, Insurance $4,300, and Advertising $2,700.
4. Lon has visited several financial institutions to discuss funding. The best interest rate he has been able to negotiate is 15%. Use this rate for cost of capital.
5. Lon expects each van to make ten round trips weekly and carry an average of six students each trip. The service is expected to operate 30 weeks each year, and each student will be charged $12 for a round-trip ticket. Click here to view PV table.
a)
Determine the annual (1) net income and (2) net annual cash flows for the commuter service. (Round answers to 0 decimal places, e.g. 125.)
Net income $
Net annual cash flows $
(b)
Compute(1) the cash payback period and (2) the annual rate of return. (Round answers to 2 decimal places, e.g. 10.50.)
Cash payback period years
Annual rate of return %
(c)
Compute the net present value of the commuter service. (Round answer to 0 decimal places, e.g. 125. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
Net present value
In: Accounting
Miles Hardware has an annual cash dividend policy that raises the dividend each year by 10%. Last year's dividend, Div 0, was $ 1.50 per share. Investors want a return of 17% on this stock. What is the stock's price if a. the company will be in business for 10 years and not have a liquidating dividend? b. the company will be in business for 20 years and not have a liquidating dividend? c. the company will be in business for 30 years and not have a liquidating dividend? d. the company will be in business for 45 years and not have a liquidating dividend? e. the company will be in business for 90 years and not have a liquidating dividend? f. the company will be in business forever? a. What is the price of this stock if the company will be in business for 10 years and not have a liquidating dividend?
In: Finance