South Shore Construction builds permanent docks and seawalls along the southern shore of Long Island. Although the firm has been in business only five years, revenue has increased from $308,000 in the first year of operation to $1,084,000 in the most recent year. The following data show the quarterly sales revenue in thousands of dollars: (Answer 1-3

1.Below is a simple linear regression analysis for this forecasting problem. Is this a valid model to use to forecast quarterly revenue for South Shore? Why or why not? Explain completely.

2.Based on the model in question 1, what is the forecast for Quarter 1 of Year 6?

3.Is there a seasonal trend in this data? Find the appropriate seasonal factor for Quarter 1 of Year 6 and apply it to get a new forecast for revenue in that quarter. Does this provide a better model than the one used in questions 1 and 2? Why or why not? Provide support for your answer (not necessarily numerical data).

Straightarm Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/24 and 12/31/25 contained the following errors:

• Failed to record Unearned Revenue at 12/31/25: $7,000
• Straigtharm declared a cash dividend of $11,000 on 12/31/25. No journal entry was made in 2025. The dividend was paid on 1/3/26; Straightarm debited Retained Earnings and credited Cash.

12/31/26 Total Stockholders’ Equity is in error by:

Select one:

a. No Error

b. $25,000

c. $18,000

d. $29,000

e. $60,000

An All-Pro offensive lineman is in contract negotiations. The team has offered the following salary structure (note: today is Year=0). The appropriate discount rate is 12% per year, compounded monthly.

a) The lineman wants the timing of the payments modified. (He is happy with the overall value of the contract – so no increase in overall value, measured in PV terms -- is needed.)

Instead of the initial terms offered, he would like to receive a $3,000,000 signing bonus, today. In addition, he wants the remaining overall value of the contract paid out in equal quarterly installments (beginning one quarter from today) over the next four years (last payment at t=4. So, there are 16 quarterly payments). What payment amount should he receive each quarter (for the next four years)?

b) The lineman has changed his mind. He now wants the overall value of the contract increased by $2,000,000. In addition, he wants to receive quarterly payments (over the next four years) that grow by 2% each quarter. If the first quarterly payment is received one quarter from today and the last is received at t=4, what amount should he receive in the first quarterly payment (received 3 months from today)?

Please answer both parts of the question and please show your work

Fortescue Metals Group issued 5% per annum bonds on 12 August 2014 that mature on 12 August 2030. The par value of each bond is $1,000. The interest on these bonds is paid, and compounded, annually. The bonds are callable on 12 August 2025 at 115% of par value. Due to the risk profile of Fortescue Metals Group, investors required a 10% per annum rate of return when these bonds were first issued.

a)    Determine the value of Fortescue Metals Group’s bonds, when they were first issued, if investors did not expect these bonds to be called.

b) Determine the value of Fortescue Metals Group’s bonds, when they were first issued, assuming investors expected them to be called on the future call date.

c)Three years after issuance, these bonds are currently trading at a value of 40 cents on the dollar ($400). If you currently require a return of 14% on investments of this perceived risk level, should you buy these bonds as of 12 August 2017? In your answer, please ensure you explain in one sentence why you believe these bonds will be called or not.

Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $58. Wesley expects the following unit sales:

Wesley’s ending finished goods inventory policy is 25 percent of the next month’s sales.
       Suppose each handisaw takes approximately .60 hours to manufacture, and Wesley pays an average labor wage of $20 per hour.
       Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $8.00 each. The company has an ending raw materials inventory policy of 20 percent of the following month’s production requirements. Materials other than the housing unit total $4.50 per handisaw.
       Manufacturing overhead for this product includes $72,000 annual fixed overhead (based on production of 27,000 units) and $1.20 per unit variable manufacturing overhead. Wesley’s selling expenses are 7 percent of sales dollars, and administrative expenses are fixed at $18,000 per month.

Required:
1. Compute the following for the first quarter: (Do not round your intermediate calculations.)

Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $56. Wesley expects the following unit sales:

Wesley’s ending finished goods inventory policy is 30 percent of the next month’s sales.

Suppose each handisaw takes approximately 0.60 hours to manufacture, and Wesley pays an average labor wage of $18 per hour.

Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $6.00 each. The company has an ending direct materials inventory policy of 20 percent of the following month’s production requirements. Materials other than the housing unit total $4.50 per handisaw.

Manufacturing overhead for this product includes $72,000 annual fixed overhead (based on production of 27,000 units) and $1.20 per unit variable manufacturing overhead. Wesley’s selling expenses are 7 percent of sales dollars, and administrative expenses are fixed at $18,000 per month.

Required:
Compute the following for the first quarter

3. Using Grossman’s pure consumption model of the demand for health, consider the impact of the following on the optimal stock of health, the optimal amount of health inputs to purchase, and the optimal spending on all other goods and services other than on health inputs: a. An increase in education that only increases productive efficiency (i.e. education only increases the marginal product of health inputs) b. Suppose that the increase in education in part a was simultaneously associated with an increase in the persons daily wage rate. c. How does changing the person’s tastes and preferences toward health and away from other goods and services affect the answers to a and b above?

Using Grossman’s pure consumption model of the demand for health, consider the impact of the following on the optimal stock of health, the optimal amount of health inputs to purchase, and the optimal spending on all other goods and services other than on health inputs:

            a. An increase in education that only increases productive efficiency (i.e. education           only increases the marginal product of health inputs)

            b. Suppose that the increase in education in part a was simultaneously associated with      with an increase in the persons daily wage rate.

            c. How does changing the person’s tastes and preferences toward health and away from    other goods and services affect the answers to a and b above?

3. Using Grossman’s pure consumption model of the demand for health, consider the impact of the following on the optimal stock of health, the optimal amount of health inputs to purchase, and the optimal spending on all other goods and services other than on health inputs: a. An increase in education that only increases productive efficiency (i.e. education only increases the marginal product of health inputs) b. Suppose that the increase in education in part a was simultaneously associated with an increase in the persons daily wage rate. c. How does changing the person’s tastes and preferences toward health and away from other goods and services affect the answers to a and b above?