A company is developing a new high performance wax for cross country ski racing. In order to justify the price marketing​ wants, the wax needs to be very fast.​ Specifically, the mean time to finish their standard test course should be less than 55 seconds for a former Olympic champion. To test​ it, the champion will ski the course 8 times. The​ champion's times​ (selected at​ random) are 55.5​, 62.6​, 47.2​, 53.3​, 47.6​, 49.7​, 51.4​, and 41.2 seconds to complete the test course. Should they market the​ wax? Assume the assumptions and conditions for appropriate hypothesis testing are met for the sample. Use 0.05 as the​ P-value cutoff level.

a) calculate the test statistic

b) calculate the p-value

Assume that a parent company owns 80 percent of its subsidiary. The parent company uses the equity method to account for its investment in subsidiary. On January 1, 2012, the parent company issued to an unaffiliated company $1,000,000 (face value) 10 year, 10 percent bond payable for a $61,000 premium. The bonds pay interest in December 31 of each year. On January 1, 2015, the subsidiary acquired 40 percent of the bonds for $386,000. Both companies use straight-line amortization.

In preparing the consolidated financial statements for the year ended December 31, 2016, what is the consolidation entry adjustment?

Assume that a parent company owns 80 percent of its subsidiary. The parent company uses the equity method to account for its investment in subsidiary. On January 1, 2012, the parent company issued to an unaffiliated company $1,000,000 (face value) 10 year, 10 percent bond payable for a $61,000 premium. The bonds pay interest in December 31 of each year. On January 1, 2015, the subsidiary acquired 40 percent of the bonds for $386,000. Both companies use straight-line amortization. In preparing the consolidated financial statements for the year ended December 31, 2016, what is the consolidation entry adjustment?

Assume that a parent company owns 80 percent of its subsidiary. The parent company uses the equity method to account for its investment in subsidiary. On January 1, 2012, the parent company issued to an unaffiliated company $1,000,000 (face value) 10 year, 10 percent bond payable for a $61,000 premium. The bonds pay interest in December 31 of each year. On January 1, 2015, the subsidiary acquired 40 percent of the bonds for $386,000. Both companies use straight-line amortization.

In preparing the consolidated financial statements for the year ended December 31, 2016, what is the consolidation entry adjustment?

Assume that a parent company owns 80 percent of its subsidiary. The parent company uses the equity method to account for its investment in subsidiary. On January 1, 2012, the parent company issued to an unaffiliated company $1,000,000 (face value) 10 year, 10 percent bond payable for a $61,000 premium. The bonds pay interest in December 31 of each year. On January 1, 2015, the subsidiary acquired 40 percent of the bonds for $386,000. Both companies use straight-line amortization.

In preparing the consolidated financial statements for the year ended December 31, 2016, what is the consolidation entry adjustment?

In this problem, assume that the distribution of differences is approximately normal. Note: For degrees of freedom d.f. not in the Student's t table, use the closest d.f. that is smaller. In some situations, this choice of d.f. may increase the P-value by a small amount and therefore produce a slightly more "conservative" answer.

Are America's top chief executive officers (CEOs) really worth all that money? One way to answer this question is to look at row B, the annual company percentage increase in revenue, versus row A, the CEO's annual percentage salary increase in that same company. Suppose a random sample of companies yielded the following data:

Do these data indicate that the population mean percentage increase in corporate revenue (row B) is different from the population mean percentage increase in CEO salary? Use a 5% level of significance. (Let d = B − A.)

(a) What is the level of significance?


State the null and alternate hypotheses.

H₀: μ_d = 0; H₁: μ_d > 0H₀: μ_d > 0; H₁: μ_d = 0    H₀: μ_d = 0; H₁: μ_d < 0H₀: μ_d = 0; H₁: μ_d ≠ 0H₀: μ_d ≠ 0; H₁: μ_d = 0

(b) What sampling distribution will you use? What assumptions are you making?

The Student's t. We assume that d has an approximately normal distribution.The Student's t. We assume that d has an approximately uniform distribution.    The standard normal. We assume that d has an approximately uniform distribution.The standard normal. We assume that d has an approximately normal distribution.

What is the value of the sample test statistic? (Round your answer to three decimal places.)


(c) Find (or estimate) the P-value.

P-value > 0.5000.250 < P-value < 0.500    0.100 < P-value < 0.2500.050 < P-value < 0.1000.010 < P-value < 0.050P-value < 0.010

Sketch the sampling distribution and show the area corresponding to the P-value.

(d) Based on your answers in parts (a) to (c), will you reject or fail to reject the null hypothesis? Are the data statistically significant at level α?

Since the P-value ≤ α, we fail to reject H₀. The data are statistically significant.Since the P-value > α, we reject H₀. The data are not statistically significant.    Since the P-value > α, we fail to reject H₀. The data are not statistically significant.Since the P-value ≤ α, we reject H₀. The data are statistically significant.

(e) Interpret your conclusion in the context of the application.

Reject H₀. At the 5% level of significance, the evidence is sufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.Reject H₀. At the 5% level of significance, the evidence is insufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.    Fail to reject H₀. At the 5% level of significance, the evidence is insufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.Fail to reject H₀. At the 5% level of significance, the e

Leading with Purpose: Changing the Way We Make Money to Change the World

• Published on July 11, 2018

Indra Nooyi

Former Chairman and CEO of PepsiCo

Twelve years ago, we embarked on a journey at PepsiCo that we call Performance with Purpose. Since then, much has changed—at PepsiCo and around the world—but the underlying principles behind Performance with Purpose remain the same.

We know we need to deliver the kind of top-tier financial results our investors, associates, and all our stakeholders expect. And we also know something else. We know we need to do it with a sense of purpose, a moral compass, guiding our way.

For me, and all of us at PepsiCo, Performance with Purpose is—and always has been—about the way we make money, not the way we spend it. About who we are, the character of our company.

We’ve tried to adhere to the idea of a social contract once defined by British statesman Edmund Burke as a partnership between the living, those who’ve come before, and those yet to be born.

And that means managing PepsiCo with an eye toward not only short-term priorities, but long-term priorities, not only the level of returns, but the duration of returns, as well, recognizing that our success—and the success of the communities we serve and the wider world—are inextricably bound together.

Much of our early work on Performance with Purpose required us to think differently about our business and the kinds of long-term investments—from researching and developing new, more nutritious products, to finding ways to reduce water and energy use across plants and farms—that could help us deliver on our vision of making our growth, our operations, and our impact more sustainable.

Sustainability has been defined as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” Over the last dozen years, we’ve tried to meet the needs of the present while strengthening the ability of future generations to meet theirs, integrating that aspiration into our goals for what we originally called Human Sustainability, Environmental Sustainability, and Talent Sustainability—today known as Products, Planet, and People:

When it comes to our Products, we’ve built on our legacy as the first company to voluntarily remove trans fat from our snacks by reducing added sugars, sodium and saturated fat in many of our products, launching a revolutionary nutrition-focused vending option, Hello Goodness, and growing our portfolio of Good for You and Better for You options from about 38 percent of revenue in 2006 to roughly 50 percent last year. We also teamed up with others in our industry to form the Healthy Weight Commitment Foundation, removing 6.4 trillion Calories from our food and beverage products, surpassing our collective pledge by more than 400%. And through Food for Good, we’ve provided 80 million nutritious servings to low-income U.S. families since 2009 to date.

When it comes to our Planet, we’ve raised the bar for what it means to be a responsible corporate water steward, earning the prestigious Stockholm Industry Water Award. In fact, we achieved a 25 percent water-use efficiency improvement between 2006 and 2015 in our legacy operations. And we’ve invested more than $40 million since 2006 to provide safe water access around the world, benefiting nearly 16 million people in some of the planet’s most water-stressed regions.

We’ve also made our delivery fleet more energy efficient, eliminating the need for over 1 million gallons of diesel fuel since our electric vehicle initiative began in 2010—the equivalent of keeping more than 2,000 passenger cars off the road for a year—while also making our beverage coolers and vending machines 60 percent more energy efficient. And we are one of the largest users of food-grade recycled PET in the U.S. In fact, if more recycled PET were available, we’d buy it. We’ve also launched the first 100 percent compostable chip bag in test markets, while diverting more and more of our waste from landfill—approximately 95 percent as of the end of 2017.

When it comes to our People, we’ve reimagined what it means to support our associates, from ushering in on-site and near-site childcare at campuses around the world, to expanding PepsiCo University’s online course offerings to help associates upgrade their skills to navigate a rapidly changing world. And we’ve also helped lift up the communities we serve, playing a critical role in disaster relief efforts, from Texas to Florida and Puerto Rico, Mexico to Ecuador, China to the Philippines.

So, while we still have work to do in certain areas, we’re incredibly proud of the progress we’ve made. Our aspiration of being a good company—good ethically and good commercially—is now coming to fruition, yielding a broader, more lasting impact than we ever imagined, and setting a standard that companies across our industry and beyond aspire to meet.

Looking ahead, we’ll continue viewing our work through both a microscope and a telescope, focusing on the most granular details—grams of saturated fat, parts per billion of greenhouse gas, the number of women in management roles—as well as the larger ambition of building a business that acts in accordance with our values, each of us striving to do what’s right for the company and what’s right for our communities. Because at the end of the day, there’s no separating the two.

Leading this company remains a source of incredible pride. In my first sustainability report letter in 2007, I opened with a story:

“When I was a child in India, my mother would ask my sister and me a simple but compelling question: ‘What would you do to change the world?’ Today, I know my answer would be that I want to lead a company that is a force for good in the world. A company that delivers strong financial performance, while embracing purpose in everything it does.”

That is still my answer. And I know that if we stay focused on our mission, if we engage the head, heart and hands of our more than 260,000 associates, and adhere to the idea that how we make money is as important as how we spend it, we’ll continue doing more than advancing the heritage of a great and iconic company. We’ll keep changing the world.

Indra Nooyi

Former Chairman and CEO of PepsiCo

Help answering the questions please

Consider Nooyi’s ideas (untraditional more than a decade ago when she launched her initiative and still not mainstream!) about the purpose of the corporation. What effect might her views be influenced by being raised in a developing economy and her exposure to social inequality and extreme environmental pressures? Would you deem her an ethical leader? What are your thoughts about her views of and attitudes toward stakeholders (such as investors, consumers, employees, critics and civil society) and how she interacted with them? What about her three planks of sustainability (people, planet and products)? She said she knew at the start that to be successful she would need to fundamentally change PepsiCo's corporate culture and that it would take years to do it. Recall she patiently gave people time to "come around," but planned "retirement parties" for those that could not. Is she a leader you would aspire to work with or for? Why or why not?  

On January 1, 2012, Aspen Company acquired 80 percent of Birch Company’s outstanding voting stock for $504,000. Birch reported a $510,000 book value and the fair value of the noncontrolling interest was $126,000 on that date. Also, on January 1, 2013, Birch acquired 80 percent of Cedar Company for $160,000 when Cedar had a $164,000 book value and the 20 percent noncontrolling interest was valued at $40,000. In each acquisition, the subsidiary’s excess acquisition-date fair over book value was assigned to a trade name with a 30-year life. These companies report the following financial information. Investment income figures are not included. 2012 2013 2014   Sales:      Aspen Company $ 515,000    $ 595,000    $ 740,000         Birch Company 285,000    398,750    631,000         Cedar Company Not available    249,800    258,800      Expenses:      Aspen Company $ 397,500    $ 442,500    $ 530,000         Birch Company 237,000    315,000    557,500         Cedar Company Not available    233,000    216,000      Dividends declared:      Aspen Company $ 20,000    $ 45,000    $ 55,000         Birch Company 10,000    15,000    15,000         Cedar Company Not available    2,000    6,000    a If all companies use the equity method for internal reporting purposes, what is the December 31, 2013, balance in Aspen's Investment in Birch Company account b What is the consolidated net income for this business combination for 2014? c What is the net income attributable to the noncontrolling interest in 2014? d Assume that Birch made intra-entity inventory transfers to Aspen that have resulted in the following unrealized gross profits at the end of each year: Date Amount   12/31/12 $11,100      12/31/13 20,700      12/31/14 28,400    What is the realized income of Birch in 2013 and 2014, respectively?

On December 31, 2020, the company reported the following:

Cumulative Preferred shares, 36,000 convertible shares outstanding             $     960,000

Common shares, 112,500 shares issued and outstanding                                    2,880,00

Retained earnings, beginning, as at 1/1/20                                                         1,032,000

Further, the company also reported earnings from operations of $1,847,790 for 2020.  The cumulative preferred shares, as stated above, could participate in dividends declared after the common shares received a minimum dividend of $3.00 per share.  Participation in the excess dividends is based on the relative total capital contributed by each group. The company management wishes to declare dividends for 2020 such that each common share would be entitled to a dividend of $4 per share.  Dividends were last declared in 2017.

Required:

1.  Use the schedule below to answer the following:

      a]   The total dividends which the management would declare; and

      b]   The total amounts payable to each group of shareholders.

Distribution Of Dividends