Question 2:
After the same cruise ship accident, Ron and Don are deserted on a separate island.
Unfortunately for them, they did not manage to bring anything with them. On the island, there
are only two edible items: Bananas (B) and Coconuts (C). Each day, Ron and Don go and collect
fruit. Ron is twice as good at collecting bananas as he is at collecting coconuts and the maximum
number of bananas he could collect in a day is 24. Don is the opposite: he is twice as good at
collecting coconuts as he is at collecting Bananas and could collect a maximum of 24 coconuts in a day.
(a) Suppose Ron and Don are not getting along (Don accused Ron of stealing his binoculars)
and refuse to trade. Draw a diagram showing the production possibilities frontier for Don,
and a separate diagram for Ron.
(b) For Ron, what is the “price” of collecting a coconut? What about for Don?
(c) Suppose Ron and Don both have the same utility function:
U=B^0.5C^0.5. How many bananas and coconuts will Ron and Don each produce (and then consume)?
(d) After some time, Ron and Don reconcile and discuss the possibility of trading with one
another. By cooperating, how much of each fruit will Ron and Don produce? Will they be
better off?
(e) Suppose they play the same market game as Annie and Bert to escape boredom, and the
prices are pB=pD=1. How much fruit will each person collect? At these prices, how
many bananas are demanded by Don and how many bananas is Ron willing to supply?
In: Economics
OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship would cost
$501
million, but would operate for
20
years. OpenSeas expects annual cash flows from operating the ship to be
$69.5
million (at the end of each year) and its cost of capital is 12.0%
a. Prepare an NPV profile of the purchase using discount rates of
2.0%,
11.5%
and
17.0%.
b. Identify the IRR on a graph.
c. Is the purchase attractive based on these estimates?
d. How far off could OpenSeas' cost of capital estimate be before your purchase decision would change? (NOTE: Subtract the discount rate from the actual IRR. Use Excel to compute the actual IRR.)
In: Finance
Fiction Cruiseline offers three ways to exercise on their cruise ships. 73 of the 86 passengers participated in at least one method of exercise. 36 people went rock climbing, 44 people went ice skating, and 19 went to the fitness center. 14 people went rock climbing and ice skating, 11 people went rock climbing and to the fitness center, and 9 people went ice skating and to the fitness center. Draw a Venn Diagram for the three sets if necessary. Include how you found the number of ALL three activities.
Calculate the probability for:
A randomly selected passenger did not go ice skating, given they did at least two activities
In: Statistics and Probability
OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship would cost $501 million, but would operate for 20 years. OpenSeas expects annual cash flows from operating the ship to be $69.7 million (at the end of each year) and its cost of capital is 12.0%
a. Prepare an NPV profile of the purchase using discount rates of 2.0%, 11.5% and 17.0%.
The NPV for a discount rates of 2.0% is how many million?
The NPV for a discount rates of 11.5% is how many million?
The NPV for a discount rates of 17.0% is how many million?
b. Identify the IRR on a graph.
The approximate IRR from the graph is what percent?
c. Is the purchase attractive based on these estimates? Should OpenSeas go ahead with the purchase?
Yes/no, because at a 12.0% discount rate, the NPV is positive/negative.
d. How far off could OpenSeas' cost of capital estimate be before your purchase decision would change? (NOTE: Subtract the discount rate from the actual IRR. Use Excel to compute the actual IRR.)
The cost of capital estimate can be off by what percent?
In: Finance
4.Draymondvisits a car dealership looking for a sports car to cruise the city in style. He tells thedealership that he can repay a loan at $475per month for the next sixyears. If thedealership’s bankis charging customers 6.36%(APR), how much would it be willing to lend Draymond?
A. lessthan $28,400
B. more than $28,400 but less than $29,125
C. more than $29,125 but less than $29,850
D. more than $29,850 but lessthan $30,675
E. more than $30,675
5.A small business owner visits her bank to ask for a loan. The owner states that she can repay a loan at $2,500 per month for the next threeyears and then $3,000 per month for another twoyears afterthat.If the bank ischarging customers 7.56%APR, how much would it be willing to lendthe business owner?
A. more than $133,625
B. more than $132,750, but less than $133,625
C. more than $131,875, but less than $132,750
D. morethan $131,000, but less than $131,875
E.less than $131,000
14.Howardjust took out a $18,000 loan for hissmall business. The loan has a threeyearterm and repayment is in the form of threeequal end-of-year payments.The interest rate on the loan is 8.75%per year.How much principal does Howardpay in the secondpayment?
A.$5,504
B.$5,986
C.$6,235
D.$6,510
E.$7,079
In: Finance
Wheeling Company is a merchandiser that provided a balance sheet as of September 30 as shown below: Wheeling Company Balance Sheet September 30 Assets Cash $ 75,800 Accounts receivable 154,000 Inventory 75,600 Buildings and equipment, net of depreciation 293,000 Total assets $ 598,400 Liabilities and Stockholders’ Equity Accounts payable $ 244,900 Common stock 216,000 Retained earnings 137,500 Total liabilities and stockholders’ equity $ 598,400 The company is in the process of preparing a budget for October and has assembled the following data: Sales are budgeted at $560,000 for October and $570,000 for November. Of these sales, 35% will be for cash; the remainder will be credit sales. Forty percent of a month’s credit sales are collected in the month the sales are made, and the remaining 60% is collected in the following month. All of the September 30 accounts receivable will be collected in October. The budgeted cost of goods sold is always 45% of sales and the ending merchandise inventory is always 30% of the following month’s cost of goods sold. All merchandise purchases are on account. Thirty percent of all purchases are paid for in the month of purchase and 70% are paid for in the following month. All of the September 30 accounts payable to suppliers will be paid during October. Selling and administrative expenses for October are budgeted at $80,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $2,930 for the month. Required: 1. Using the information provided, calculate or prepare the following: a. The budgeted cash collections for October. b. The budgeted merchandise purchases for October. c. The budgeted cash disbursements for merchandise purchases for October. d. The budgeted net operating income for October. e. A budgeted balance sheet at October 31. 2. Assume the following changes to the underlying budgeting assumptions: (1) 50% of a month’s credit sales are collected in the month the sales are made and the remaining 50% is collected in the following month, (2) the ending merchandise inventory is always 10% of the following month’s cost of goods sold, and (3) 20% of all purchases are paid for in the month of purchase and 80% are paid for in the following month. Using these new assumptions, calculate or prepare the following: a. The budgeted cash collections for October. b. The budgeted merchandise purchases for October. c. The budgeted cash disbursements for merchandise purchases for October. d. Net operating income for the month of October. e. A budgeted balance sheet at October 31. I ONLY NEED 2C PLEASE MAKE SURE IT IS CORRECT Thank you have a good day. God Bless
In: Accounting
chapter 8 q 3
Wheeling Company is a merchandiser that provided a balance sheet as of September 30 as shown below:
|
Wheeling Company Balance Sheet September 30 |
||
| Assets | ||
| Cash | $ | 73,600 |
| Accounts receivable | 142,000 | |
| Inventory | 67,500 | |
| Buildings and equipment, net of depreciation | 305,000 | |
| Total assets | $ | 588,100 |
| Liabilities and Stockholders’ Equity | ||
| Accounts payable | $ | 265,600 |
| Common stock | 216,000 | |
| Retained earnings | 106,500 | |
| Total liabilities and stockholders’ equity | $ | 588,100 |
The company is in the process of preparing a budget for October and has assembled the following data:
Sales are budgeted at $500,000 for October and $510,000 for November. Of these sales, 35% will be for cash; the remainder will be credit sales. Forty percent of a month’s credit sales are collected in the month the sales are made, and the remaining 60% is collected in the following month. All of the September 30 accounts receivable will be collected in October.
The budgeted cost of goods sold is always 45% of sales and the ending merchandise inventory is always 30% of the following month’s cost of goods sold.
All merchandise purchases are on account. Thirty percent of all purchases are paid for in the month of purchase and 70% are paid for in the following month. All of the September 30 accounts payable to suppliers will be paid during October.
Selling and administrative expenses for October are budgeted at $79,800, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $3,050 for the month.
Required:
1. Using the information provided, calculate or prepare the following:
a. The budgeted cash collections for October.
b. The budgeted merchandise purchases for October.
c. The budgeted cash disbursements for merchandise purchases for October.
d. The budgeted net operating income for October.
e. A budgeted balance sheet at October 31.
2. Assume the following changes to the underlying budgeting assumptions:
(1) 50% of a month’s credit sales are collected in the month the sales are made and the remaining 50% is collected in the following month, (2) the ending merchandise inventory is always 10% of the following month’s cost of goods sold, and (3) 20% of all purchases are paid for in the month of purchase and 80% are paid for in the following month. Using these new assumptions, calculate or prepare the following:
a. The budgeted cash collections for October.
b. The budgeted merchandise purchases for October.
c. The budgeted cash disbursements for merchandise purchases for October.
d. Net operating income for the month of October.
e. A budgeted balance sheet at October 31.
In: Accounting
The indigenous inhabitants of North America, before the arrival of Europeans and subsequently of Africans, left behind an archaeological record that indicates that, north of the central Mexican valley, populations were relatively small, isolated, and broadly reliant on the hunter-gatherer mode of production with supplementary horticulture. What prevented the pre-contact economies of North America's peoples from developing as in Eurasia?
| A |
Until the importation of horses, cattle, swine, sheep, and goats, North America lacked domesticated animals, because there simply were no fauna that were available for domestication. Domesticated animals had proved central to producing surplus commodities that could be traded. Other than small objects (jewelry, pottery, non-metal weapons), there was little accumulation. except in places where there had been maize-centered development, maize being the major domesticated crop north of Central America. |
|
| B |
Indigenous North Americans practiced constant warfare, which disrupted their cities, transportation networks, and water-control systems. |
|
| C |
Religious considerations. |
|
| D |
The inefficiency of labor markets. |
In: Economics
1. Which of the following decreases owner’s equity?
a. losses
b. investments by owners
c. gains
d. short-term loans
2. Which financial statement shows the financial performance of the company on a cash basis?
a. income statement
b. statement of cash flows
c. statement of owner’s equity
d. balance sheet
3. Assume a company has a $350 credit (not cash) sale. How would the transaction appear if the business uses accrual accounting?
a. $350 would show up on the statement of cash flows as a cash outflow.
b. $350 would show up on the income statement as a sale.
c. $350 would show up on the balance sheet as a sale.
d. The transaction would not be reported because the cash was not exchanged.
4. Which of the following is not an element of the financial statements?
a. liabilities
b. future potential sales price of inventory
c. assets
d. equity
In: Accounting
Americans receive an average of 20 Christmas cards each year.
Suppose the number of Christmas cards is normally distributed with
a standard deviation of 7. Let X be the number of Christmas cards
received by a randomly selected American. Round all answers to 4
decimal places where possible.
a. What is the distribution of X? X ~ N(,)
b. If an American is randomly chosen, find the probability that
this American will receive no more than 24 Christmas cards this
year.
c. If an American is randomly chosen, find the probability that
this American will receive between 19 and 24 Christmas cards this
year.
d. 69% of all Americans receive at most how many Christmas cards?
(Please enter a whole number)
In: Statistics and Probability