If the price index was 90 in year 1, 100 in year 2, and 95 in year 3, then the economy experienced

The domestic airfare for business travel for the current year and the previous year was reported. A sample of 12 flights with their domestic airfares shown for both years is contained in the Excel Online file below. Construct a spreadsheet to answer the following questions.

a. Formulate the hypotheses and test for a significant increase in the mean domestic airfare for business travel for the one-year period.

_________<>≤≥=≠
_________<>≤≥=≠

What are the -value, degrees of freedom, and -value

Using a .05 level of significance, what is your conclusion?

We _________can concludecannot conclude that there has been a significance increase in business travel airfares over the one-year period.

b. What is the sample mean domestic airfare for business travel for each year?

c. What is the percentage change in the airfare for the one-year period?

% (to 2 decimals)

Compute the duration of a bond that pays $100 in year 1 and $5 in year 2. The term-structure of interest rates is flat at 10%. It means r1 = r2 = 10%

The yield on a one year bond is 3%. The expected yield on a one year bond, one year in the future is 4%. The expected yield on a one year bond in 2 years is 5%. The liquidity premium 0.5(n-1)%. The "3-2" spread is _____ .

1. -.5%
2. -1%
3. 0%
4. 0.5%
5. 1%

The yield on a one year bond is 3%. The expected yield for the one year bond a year later is 4%. The expected yield for the one year bond in 2 years is 5%. According to the expectations hypothesis, the yield on a three year bond should be _____.

a.3%

b.4%

c.5%

d.None of the above

An equipment manufacturer is in the third year of a 6 year contract for ABCD corporation. The contract calls for annual production of 30,000 units at a selling price of $45 per unit. Variable costs are $25 per unit and direct fixed costs are $100,000 per year. A new customer (XYZ corporation) approaches you and asks you to produce on a one time basis (i.e. no follow up contract) 60,000 units of the same equipment at a selling price of $35. There are no incremental direct fixed costs. (a) What is the net segment income of the ABCD contract per year and over the 6 year life of the contract? (b) What is the net segment income of the XYZ contract? (c) If the contract with ABCD calls for you to reduce your selling price for the rest of the 6 year contract to that of XYZ, what is the real value of the XYZ contract?

Inventory balances at the beginning and end of the year were as follows: Beginning of Year End of Year Raw materials $ 54,000 $ 34,000 Work in process ? $ 31,000 Finished goods $ 37,000 ? The total manufacturing costs for the year were $680,000; the cost of goods available for sale totaled $730,000; the unadjusted cost of goods sold totaled $662,000; and the net operating income was $30,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)

At the beginning of the​ year, office supplies of $1,200 were on hand. During the​ year, Tempo Air Conditioning Service paid $2,000 for more office supplies. At the end of the​ year, Tempo has $1,000 of office supplies on hand.Read the requirements.

Requirement 1. Record the adjusting entry assuming that Tempo records the purchase of office supplies by initially debiting an asset account. Post the adjusting entry to the Office Supplies and Supplies Expense​ T-accounts. Make sure to include the beginning balance and purchase of office supplies in the Office Supplies​ T-account.

Now post the adjusting entry to the Office Supplies and Supplies Expense​ T-accounts. Enter the beginning balances on the first line of each account. Use a ​"Jan. ​1" reference to show the beginning balance. Make sure to include the purchase of office supplies in the Office Supplies​ T-account, then post the adjusting entry. Use a​ "Bal." reference to show the ending balance of each account.

The beginning inventory in Year 2 is under by 3000 and in Year 3 under by 2000. The purchases in Year 2 are over by 4000, and the purchases in Year 3 are also over by 4000. You find these errors in Year 3 after the books of the previous years have closed. What's the correcting entry

Jack Tar, CFO of Sheetbend & Halyard, Inc., opened the company confidential envelope. It contained a draft of a competitive bid for a contract to supply duffel canvas to the U.S. Navy. The cover memo from Sheetbend?s CEO asked Mr. Tar to review the bid before it was submitted. The bid and its supporting documents had been prepared by Sheetbend?s sales staff. It called for Sheetbend to supply 100,000 yards of duffel canvas per year for 5 years. The proposed selling price was fixed at $30 per yard. Mr. Tar was not usually involved in sales, but this bid was unusual in at least two respects. First, if accepted by the navy, it would commit Sheetbend to a fixed-price, long-term contract. Second, producing the duffel canvas would require an investment of $1.5 million to purchase machinery and to refurbish Sheetbend?s plant in Pleasantboro, Maine. Mr. Tar set to work and by the end of the week had collected the following facts and assumptions: ? The plant in Pleasantboro had been built in the early 1900s and is now idle. The plant was fully depreciated on Sheetbend?s books, except for the purchase cost of the land (in 1947) of $10,000. ? Now that the land was valuable shorefront property, Mr. Tar thought the land and the idle plant could be sold, immediately or in the near future, for $600,000. ? Refurbishing the plant would cost $500,000. This investment would be depreciated for tax purposes on the 10-year MACRS schedule. ? The new machinery would cost $1 million. This investment could be depreciated on the 5-year MACRS schedule. ? The refurbished plant and new machinery would last for many years. However, the remaining market for duffel canvas was small, and it was not clear that additional orders could be obtained once the navy contract was finished. The machinery was custom-built and could be used only for duffel canvas. Its secondhand value at the end of 5 years was probably zero. ? Table 9?4 shows the sales staff?s forecasts of income from the navy contract. Mr. Tar reviewed this forecast and decided that its assumptions were reasonable, except that the forecast used book, not tax, depreciation. ? But the forecast income statement contained no mention of working capital. Mr. Tar thought that working capital would average about 10% of sales. Armed with this information, Mr. Tar constructed a spreadsheet to calculate the NPV of the duffel canvas project, assuming that Sheetbend?s bid would be accepted by the navy. He had just finished debugging the spreadsheet when another confidential envelope arrived from Sheetbend?s CEO. It contained a firm offer from a Maine real estate developer to pur- chase Sheetbend?s Pleasantboro land and plant for $1.5 millionin cash. Should Mr. Tar recommend submitting the bid to the navy at the proposed price of $30 per yard? The discount rate for this proj- ect is 12%. Year 1 2 3 4 5 1 Yards sold 100 100 1000 100 100 2 Price per yard 30 30 30 30 30 3 Revenue (1 x 2) 3000 3000 3000 3000 3000 4 cost of goods sold 2100 2184 2271.36 2362.21 2456.7 5 operating cash flow (3-4) 900 816 728.64 637.79 543.3 6 Depreciation 250 250 250 250 250 7 Income (5-6) 650 566 478.64 387.79 293.3 8 Tax at 35% 227.5 198.1 167.52 135.72 102.65 9 Net Income (7-8) $422.50 $367.90 $311.12 $252.07 $190.65 TABLE 9?4 Forecast income statement for the U.S. Navy duffel canvas project (dollar figures in thousands, except price per yard) Notes: 1. Yards sold and price per yard would be fixed by contract. 2. Cost of goods includes fixed cost of $300,000 per year plus variable costs of $18 per yard. Costs are expected to increase at the inflation rate of 4% per year. 3. Depreciation: A $1 million investment in machinery is depreciated straight-line over 5 years ($200,000 per year). The $500,000 cost of refurbishing the Pleasantboro plant is depreciated straight-line over 10 years ($50,000 per year.

MY QUESTION: What is the difference between profits and cash flow?What are the key factors affecting this decision that Mr. Tar should consider?

Thank you

Problem 5-23

Consider the following time series data.

(a)	Choose the correct time series plot.
	(i) (ii)         (iii) (iv)
	_________________
	What type of pattern exists in the data?
	_________________
(b)	Use a multiple regression model with dummy variables as follows to develop an equation to account for seasonal effects in the data. Qtr1 = 1 if Quarter 1, 0 otherwise; Qtr2 = 1 if Quarter 2, 0 otherwise; Qtr3 = 1 if Quarter 3, 0 otherwise.
	If required, round your answers to three decimal places. For subtractive or negative numbers use a minus sign even if there is a + sign before the blank. (Example: -300)
	Value = __________6.667_______ + ___-1______________ Qtr1t + _____-3____________ Qtr2t + __________-2_______ Qtr3t
(c)	Compute the quarterly forecasts for next year based on the model you developed in part (b).
	If required, round your answers to three decimal places.
	Quarter 1 forecast _____5.667____________ Quarter 2 forecast _____3.667____________ Quarter 3 forecast _______4.667__________ Quarter 4 forecast ______6.667___________
(d)	Use a multiple regression model to develop an equation to account for trend and seasonal effects in the data. Use the dummy variables you developed in part (b) to capture seasonal effects and create a variable t such that t = 1 for Quarter 1 in Year 1, t = 2 for Quarter 2 in Year 1,… t = 12 for Quarter 4 in Year 3.
	If required, round your answers to three decimal places. For subtractive or negative numbers use a minus sign even if there is a + sign before the blank. (Example: -300)
	Value =   3.4167______________ + __0.2188______________ Qtr1t + _____-2.1875___________ Qtr2t + __-1.5938_______________ Qtr3t + ___0.4063______________ t
(e)	Compute the quarterly forecasts for next year based on the model you developed in part (d).
	Round your interim computations and final answers to three decimal places.
	Quarter 1 forecast _8.9167________________ Quarter 2 forecast ___6.9167______________ Quarter 3 forecast 7.9167_________________ Quarter 4 forecast _9.9167________________
(f)	Is the model you developed in part (b) or the model you developed in part (d) more effective?
	If required, round your intermediate calculations and final answer to three decimal places.
	Model developed in part (b) Model developed in part (d) MSE _________________ _________________
I only need (f) answered
	I only need (f) answered Both MSE needs to be included for part (b) and (d).