Lasting Impressions (LI) Company is a medium-sized commercial printer of promotional advertising brochures, booklets, and other direct-mail pieces. The firm’s major clients are ad agencies based in New York and Chicago. The typical job is characterized by high quality and production runs of more than 50,000 units. LI has not been able to compete effectively with larger printers because of its existing older, inefficient presses. The firm is currently having problems meeting run length requirements as well as meeting quality standards in a cost-effective manner. The general manager has proposed the purchase of one of two large, six-color presses designed for long, high-quality runs. The purchase of a new press would enable LI to reduce its cost of labor and therefore the price to the client, putting the firm in a more competitive position. The key financial characteristics of the old press and of the two proposed presses are summarized in what follows. Old press Originally purchased 3 years ago at an installed cost of $400,000, it is being depreciated under MACRS using a 5-year recovery period. The old press has a remaining economic life of 5 years. It can be sold today to net $420,000 before taxes; if it is retained, it can be sold to net $150,000 before taxes at the end of 5 years. Press A This highly automated press can be purchased for $830,000 and will require $40,000 in installation costs. It will be depreciated under MACRS using a 5-year recovery period. At the end of the 5 years, the machine could be sold to net $400,000 before taxes. If this machine is acquired, it is anticipated that the current account changes shown in the following table would result. Integrative Case 5 Cash (+) $ 25,400 Accounts receivable (+) 120,000 Inventories (-) 20,000 Accounts payable (+) 35,000 Press B This press is not as sophisticated as press A. It costs $640,000 and requires $20,000 in installation costs. It will be depreciated under MACRS using a 5-year recovery period. At the end of 5 years, it can be sold to net $330,000 before taxes. Acquisition of this press will have no effect on the firm’s net working capital investment. The firm estimates that its earnings before depreciation, interest, and taxes withthe old press and with press A or press B for each of the 5 years would be as shown in the table at the top of the next page. The firm is subject to a 40% tax rate. The firm’s cost of capital, r, applicable to the proposed replacement is 14%. Earnings before Depreciation, Interest, and Taxes for Lasting Impressions Company’s Presses Year - Old press - Press A - Press B 1- $120,000 - $250,000 - $210,000 2 - 120,000 - 270,000 - 210,000 3 - 120,000 - 300,000 - 210,000 4 - 120,000 - 330,000 - 210,000 5 - 120,000 - 370,000 - 210,000

TO DO

a. For each of the two proposed replacement presses, determine:

(1) Initial investment.

(2) Operating cash inflows. (Note: Be sure to consider the depreciation in year 6.)

(3) Terminal cash flow. (Note: This is at the end of year 5.)

b. Using the data developed in part a, find and depict on a time line the relevant cash flow stream associated with each of the two proposed replacement presses, assuming that each is terminated at the end of 5 years.

c. Using the data developed in part b, apply each of the following decision techniques:

(1) Payback period. (Note: For year 5, use only the operating cash inflows—that is, exclude terminal cash flow—when making this calculation.)

(2) Net present value (NPV).

(3) Internal rate of return (IRR).

TotsPoses, Inc., a profit-maximizing business, is the only photography business in town that specializes in portraits of small children. George, who owns and runs TotsPoses, expects to encounter an average of eight customers per day, each with a reservation price shown in the following table. Assume George has no fixed costs, and his cost of producing each portrait is $35.

a. Complete the following table.

Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Enter your responses as whole numbers.

How much should George charge if he must charge a single price to all customers? $__

At this price, how many portraits will George produce each day? __ portraits

What will be his economic profit? $__ per day

b. How much consumer surplus is generated each day at this price? $__

c. What is the socially efficient number of portraits? __ portraits

d. George is very experienced in the business and knows the reservation price of each of his customers. If he is allowed to charge any price he likes to any consumer, how many portraits will he produce each day? __ portraits.

What will his economic profit be? $__ per day

e. In this case, how much consumer surplus is generated each day? $__

You must choose one of the following: a stock fund, a bond fund, or a portfolio of 50% stock and 50% bond. The expected returns are 13% and 8% for the stock and bond fund, respectively, and the standard deviations are 20% and 16%, with a correlation of 0.40 between the two funds. You can also borrow or lend at 5%. Relying on mean-variance analysis, determine the order of your preference from most preferred to least preferred.

As an entry level new clubhouse manager at the Country Club you have been assigned the position of scheduling and preparing and monitoring overtime pay for the club's unionized employees. You have scheduled two employees for the last week of December where overtime pay conditions have occurred. This was a hectic period with numerous holiday functions and the New Year's celebration. Overtime pay will be paid at the rate of 1.5 times the base rate. Sami worked two different jobs at different pay rates. Job #1 - Waiter...paid $12 per hour for 40 hours (40 hours X $12 per hour = $480) Job #2 - Prep Cook...paid $15 per hour for 8 hours (8 hours X $15 per hour = $120) What was Sami's base pay rate? Show and identify your work and how you arrived at your answer. What was Sami paid in total for this week of work? Show and identify your work and how you arrived at your answer

This phyton program requires you to prints out the total of a
series of positive floating-pointnumbers entered by the user.  The
user should be prompted with the message "Enter a floating-point
number >= 0:".  You do not need to check that the input is a
FP number. If the user correctly enters a positive FP number, handle
it and prompt the user for the next number with the same message.  If
the user enters a negative number, your program should print 
"Number must be >= 0.  Try again:" and wait for another number.
Negative numbers should not be added to the total.  If the user enters
a zero, that is an indication that the user is finished entering
numbers.  You program should print out "The sum of the numbers is:"
followed by the total.  You do not need to round the total. 
Below are two runs of the program:

Enter a floating-point number >= 0: 2.5
Enter a floating-point number >= 0: 3
Enter a floating-point number >= 0: -13.9
Number must be >= 0. Try again: 27
Enter a floating-point number >= 0: 8
Enter a floating-point number >= 0: 0
The sum of the numbers is:  40.5

Enter a floating-point number >= 0: 0
The sum of the numbers is:  0

def sumPositiveFPNumbers():
   < your code goes here >

7. Philip wants to take a speed-reading course, but his wife thinks that it is a waste of time. To convince her that the course will really change the way that he reads, Philip decides to conduct an informal study. He pols seven people, asking them to tell the number of pages they were able to read in an hour before and then after they took the course. The results he obtained are found in the following table. Construct and interpret a 95% confidence interval for the true mean increase in reading speeds for people who have taken the speed-reading course. Round your CI limits to 1 decimal place.

Number of pages read in one hour

Before Course: 35 50 45 50 60 70 65

After Course : 50 60 80 70 85 100 90

Waterways is considering the replacement of an antiquated machine that has been slowing down production because of breakdowns and added maintenance. The operations manager estimates that this machine still has 2 more years of possible use. The machine produces an average of 40 units per day at a cost of $6.10 per unit, whereas other similar machines are producing twice that much. The units sell for $9.30. Sales are equal to production on these units, and production runs for 260 days each year. The replacement machine would cost $69,660 and have a 2-year life.

Given the information above, what are the consequences of Waterways replacing the machine that is slowing down production because of breakdowns?

The header of a Python function is shown below:

def result(one, two, three = 3, four)

(a) How do we call the situation with the third parameter in this header?

(b) Indicate the method of correspondence between formal and actual parameters

that is used in the following function call:

result(four = 14, two = 22, one = 1, three = 33)

(c) Explain what is wrong with the following function call:

result(14, four = 44, 2, 3)

Currently the term structure is as follows:

One-year spot rate      2%

Two-year spot rate       3%

Three-year spot rate      4%

You have a one-year investment horizon one-, two-, and three-year zero coupon bonds are available.

a. Which bonds should you buy if you strongly believe that at year-end the term structure remains

unchanged (i.e., one, two, and three year spot rates remain the same)?

b. Redo part (a) assuming at year-end the term structure shifts as follows:

One-year spot rate      6%

Two-year spot rate      7%

Three-year spot rate    8%

c. What conclusion(s) can you make by comparing the results of parts (a) and (b) above?