Appropriate Transfer Prices: Opportunity Costs
Plains Peanut Butter Company recently acquired a peanut-processing company that has a normal annual capacity of 4,000,000 pounds and that sold 2,800,000 pounds last year at a price of $2.00 per pound. The purpose of the acquisition is to furnish peanuts for the peanut butter plant, which needs 1,600,000 pounds of peanuts per year. It has been purchasing peanuts from suppliers at the market price. Production costs per pound of the peanut-processing company are as follows:

Management is trying to decide what transfer price to use for sales from the newly acquired Peanut Division to the Peanut Butter Division. The manager of the Peanut Division argues that $2.00, the market price, is appropriate. The manager of the Peanut Butter Division argues that the cost price of $1.08 (or perhaps even less) should be used since fixed overhead costs should be recomputed. Any output of the Peanut Division up to 2,800,000 pounds that is not sold to the Peanut Butter Division could be sold to regular customers at $2.00 per pound.

(a) Compute the annual gross profit for the Peanut Division using a transfer price of $2.00.
$Answer

(b) Compute the annual gross profit for the Peanut Division using a transfer price of $1.08.
$Answer

(c) Which of the following is least likely to motivate the manager to take actions that will maximize corporate profits?

a.Set the transfer price at 2.00 for all transfers.

b.Set the transfer price at .86 for all transfers.

c.Set the transfer price at .86 for the first 1,200,000 lbs. transferred.

d.Set the transfer price at .86 for the first 1,200,000 lbs. transferred, and at 2.00 for the next 400,000 lbs. transferred.

e.None of the above.

Accounting or Bonds Sold at a Discount

The Biltmore National Bank raised capital through the sale of $100 million face value of eight percent coupon rate, ten-year bonds. The bonds paid interest semiannually and were sold at a time when equivalent risk-rated bonds carried a yield rate of ten percent.

Round all answers to the nearest whole number.

a. Calculate the proceeds that The Biltmore National Bank received from the sale of the eight percent bonds.
$Answer

b. Calculate the interest expense on the bonds for the first year that the bonds are outstanding.
$Answer

c. Calculate the book value of the bonds at the end of the first year.
$Answer

Two systems were constructed to disinfect a raw water source. One of the systems was designed as a CSTR, the other as PER (tank divided into 3, 5m long passes using vertical baffles).The flow rate is 90 m^3/day. The influent coliform is count 100. Both tanks have a volume of 30 m^3 (H= 2m, W=3m, L=5m). Chlorine is added as the disinfectant. The disinfection rates follows a first order relationship as follows

dN/dt = kN

Where N is the number of coliforms in the systems, k is the first order disinfection constant (9/day) What is the expected coliform concentration in the effluent from each system?

CORAL Language Only:

Write a program that first gets a list of six integers from input. The first five values are the integer list. The last value is the upper threshold. Then output all integers less than or equal to the threshold value.

Ex: If the input is 50 60 140 200 75 100, the output is:

50 60 75

For coding simplicity, follow every output value by a space, including the last one.

Such functionality is common on sites like Amazon, where a user can filter results.

Your program should define and use a function:

Function outputIntsLessThanOrEqualToThreshold(integer array(?) userVals, integer upperThreshold) returns nothing

4-122 Will receives $4000 from his aunt when he turns 21 and he immediately invests the money in a savings account. The account earns 12% annual interest, with continuous compounding. He gets his first job after 5 years.
a) Determine the accumulated savings in this account at the end of 5 years.
b) Will wants to retire from work in 20 years. If he deposits $100 into his account every month for the first 10 years, and $200 every month for the next 10, how much will he have after 20 years? Assume he continues to earn 12% annual interest with continuous compounding.

As we know, dollar-weighted average return is a more accurate way to measure security return performance if we buy or sell securities from time to time. Suppose you have the following price information for a risky security for several recent years. Assume that the stock pays no dividends

     What is the dollar-weighted average return over the entire trading period?