1. Assume that Cane normally produces and sells 102,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?

2. Assume that Cane normally produces and sells 52,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?

3. Assume that Cane expects to produce and sell 62,000 Alphas during the current year. A supplier has offered to manufacture and deliver 62,000 Alphas to Cane for a price of $128 per unit. If Cane buys 62,000 units from the supplier instead of making those units, how much will profits increase or decrease?

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Company: Wal-Mart (write on the following guidline)

1. Describe the process: list the key tasks performed and sequence of steps, people involved, equipment used, environmental conditions, work methods, and materials used.

2. Describe the players: external and internal customers and suppliers, and process operators.

3. Define customer expectations: what the customer wants, when, and where, for both external and internal customers.

4. Determine what historical data are available on process performance, or what data need to be collected to better understand the process.

You have been hired as a financial analyst for Relentless Enterprises Inc. (REI), a large, publicly traded firm that is the market share leader in high-end smart home devices (SHDs). The company is looking to set up a manufacturing plant overseas to produce a new line of SHDs. The will be a five-year project. The company bought some land three years ago for $7.9 million in the anticipation of using it as a toxic dumpsite for chemicals, but it built a piping system to safely discard the chemicals instead. The land was appraised last week for $8.4 million on an after-tax basis. In five years the after-tax value of the land will be estimated at $9.1 million, but the company expects to keep the land for a future project. The company wants to build the new manufacturing plant on this land. The plant will cost $41 million to build. The following market data on REI’s securities are current:

Debt: 225,000 6.7% coupon bonds outstanding, 25 years to maturity, selling for 103 percent of par; the bonds have a $1,000 par value each and make semiannual payments.

Common stock: 9,400,000 shares outstanding, selling for $71 per share. The beta is 1.3

Preferred stock: 475,000 shares of 4.3% preferred stock outstanding, selling for $84 per share

Market rates: Market risk premium = 6%; risk free rate = 2%

REI uses Pacific Securities as its lead underwriter. Pacific charges REI spreads of 5% on new common stock issues, 4% on new preferred share issues, and 3% on new debt issues. Pacific has included all direct and indirect costs (along with its profit) in setting these spreads. Pacific has recommended to REI that it raise the funds needed to build the plant by issuing new shares of common stock. REI’s tax rate is 35%. The project requires $1,450,000 in initial net working capital investment to get operational. Assume Pacific raises all equity for new projects externally.

Required:

(a)          Calculate the project’s initial Time 0 cash flow, taking into account all factors and side effects.

(b)          The new SHD project is somewhat riskier than a typical project for REI, primarily because the plant is being located overseas. Management has told you to use an adjustment factor of +8% to account for this increased riskiness. Calculate the appropriate discount rate to use when evaluating REI’s project.

(c)           The manufacturing plant belongs to a CCA class 43 (30%). At the end of the project (that is, the end of year five), the plant can be scrapped for $6.1 million. What is the PVCCATS of this plant and equipment?

(d)          The company will incur $7,900,000 in annual fixed costs. The plan it to manufacture 18,900 SHDs per year and sell them for $13,450 per unit. The variable production costs are $9,500 per SHD. What is the operating cash flow (OCF) from this project?

1. Complete the Sources and Uses classification and the Statement of Cash Flows for Florida Mining. Complete the Statement of Cash Flows on the following page.

The firm’s Net Income for 2006 is $50M.

Balance Sheet ($000)

                                                                              Florida Mining

Question 2 A survey released by New Zealand Health in 2015 revealed that:

• almost one in three adults (aged 15 years and over) were obese (31%)

• a further 35% of adults were overweight but not obese

• 47% of Māori adults were obese • 66% of Pacific adults were obese

• adults living in the most deprived areas were 1.7 times as likely to be obese as adults living in the least deprived areas*

• the adult obesity rate increased from 27% in 2006/07 to 31% in 2014/15

Imagine you are in charge of designing an effective social marketing advertising campaign to reach the target group of Maori and Pacific Island obese young adults aged between 18 and 30 that changes their attitudes towards healthy eating, exercise and fast food.

a) What would you advise to change their attitude through affecting the cognitive component of the attitude?

b) What would you advise to change their attitude through affecting the emotional component of the attitude?

Justify your answers using attitude theories and concepts

Morrisom National Bank has requested an analysis of checking account profitability by customer type. Customers are categorized according to the size of their account: low balances, medium balances, and high balances. The activities associated with the three different customer categories and their associated annual costs are as follows: Opening and closing accounts $300,000 Issuing monthly statements 450,000 Processing transactions 3,075,000 Customer inquiries 600,000 Providing automatic teller machine (ATM) services 1,680,000 Total cost $6,105,000 Additional data concerning the usage of the activities by the various customers are also provided: Account Balance Low Medium High Number of accounts opened/closed 22,500 4,500 3,000 Number of statements issued 675,000 150,000 75,000 Processing transactions 27,000,000 3,000,000 750,000 Number of telephone minutes 1,500,000 900,000 600,000 Number of ATM transactions 2,025,000 300,000 75,000 Number of checking accounts 57,000 12,000 6,000 Required: 1. Calculate a cost per account per year by dividing the total cost of processing and maintaining checking accounts by the total number of accounts. Round your answer to the nearest cent. $per account per year What is the average fee per month that the bank should charge to cover the costs incurred because of checking accounts? Round your answer to the nearest cent. $per month 2. Calculate a cost per account by customer category by using activity rates. Round your answers to the nearest cent. Cost Per Account Low $ Medium $ High $ 3. Currently, the bank offers free checking to all of its customers. The interest revenues average $90 per account; however, the interest revenues earned per account by category are $80, $100, and $165 for the low-, medium-, and high-balance accounts, respectively. Calculate the average profit per account (average revenue minus average cost from Requirement 1). Round your answer to the nearest cent. $per account Also calculate the profit per account by using the revenue per customer type and the unit cost per customer type calculated in Requirement 2. Round to the nearest cent. Use the minus sign to indicate a loss. Low-balance customers $per account Medium-balance customers $per account High-balance customers $per account

3. On the first week of classes, thirty-four students sat for a Math Diagnostic Test. Their scores (out of a maximum score of 30) arranged in ascending order were: 10, 12, 13, 13,15, 15, 16, 17, 18, 19, 21, 23, 23, 23, 23, 25, 25, 25, 26, 26, 26, 26, 27, 27, 27, 27, 27, 28, 28, 29, 29,29,30,30 (a) [2 marks] Find the 5-number summary for these data. (b) [2 marks] Are there any outliers? Show your work on how you identify outliers. (c) [2 marks] Draw a boxplot of this distribution.

27.) Use the following information to answer questions 27 & 28:

A statistics teacher wants to see if there is any difference in the performance of students on the final exam if she gives them orange jelly beans before the exam. She has a theory that orange jelly beans will change the results, but she isn't sure in which direction. She knows that the population mean score on the exam when students do not have orange jelly beans is 82 and that exam scores have an approximately symmetric distribution. She gives orange jelly beans to 25 randomly selected students and finds that these students had a sample mean score of 87 with a sample standard deviation of 10. She wants to have 95% confidence in her result.

27.) Conduct a hypothesis test using the p-value approach.

28.) Conduct a hypothesis test using the confidence interval approach.