Mark runs a small boat factory. He can make ten boats per year and sell them each at 50,000 each. It cost Mark 275,000 for the raw materials to build the ten boats. Mark has invested 500,000 dollars in the boat factory building. (200,000 from saving and 300,000 from small business loans at an annual rate of 5 percent=he just refinanced his business loan). Mark can work at a competing factory working on boats for an annual salary of 80,000 per year.

10a. What is the total revenue Mark can earn in year 1?

10b. What is the value of Mark's accounting profit and Joe's economic profit?

10c. Is it truly profitable for Mark to operate his boat factory? Explain.

1. Reel Fast Charters, based in the Bahamas, runs multi-day fishing charters for wealthy anglers.  They have been very successful in their first five years in operation and Brian (the owner) is considering adding a second boat.  A new 80’ Viking would cost $5,000,000 with another $1,000,000 needed to upgrade the interior to a level that would attract the wealthy clients they desire.  The boat would be depreciated straight-line over 15 years, but would be sold at the end of five years, for an estimated $5,000,000.  The new boat would generate estimated additional revenue of $2,000,000 per year and would have associated expenses of $625,000.  No additional working capital would be necessary.  The firm’s tax rate is 30% and the required rate of return is 12%.  Calculate the NPV and IRR.  Should the new boat be purchased?  

Problem 1-10 (LO. 4, 5)

Ashley runs a small business in Boulder, Colorado, that makes snow skis. She expects the business to grow substantially over the next three years. Because she is concerned about product liability and is planning to take the company public in year 2, she currently is considering incorporating the business. Pertinent financial data are as follows:

Ashley expects her combined Federal and state marginal income tax rate to be 25% over the three years before any profits from the business are considered. Her after-tax cost of capital is 10%, and the related present value factors are: for 2017, 0.8929; for 2018, 0.7972; and for 2019, 0.7118.

Click here to access the tax table to use for this problem.

Enter all amounts as positive numbers. When required, round your answers to the nearest dollar.

a. Considering only these data, compute the present value of the future cash flows for the three-year period, assuming that Ashley incorporates the business and pays all after-tax income as dividends (for Ashley’s dividends that qualify for the 15% rate).

Considering only these data, compute the present value of the future cash flows for the period, assuming that Ashley continues to operate the business as a sole proprietorship.

Alumni donations are an important source of revenue for college and universities. If administrators could determine the factors that could lead to increases in the percentage of alumni who make a donation, they might be able to implement policies that could lead to increased revenues. Research shows that students who are more satisfied with their contact with teachers are more likely to graduate. As a result, one might suspect that smaller class sizes and lower student-faculty ratios might lead to a higher percentage of satisfied graduates, which in turn might lead to increases in the percentage of alumni who make a donation. Table 15.13 shows data for 48 national universities (America’s Best Colleges, Year 2000 Edition). The column labeled Graduation Rate is the percentage of students who initially enrolled at the university and graduated. The column labeled % of Classes Under 20 shows the percentage of classes offered with fewer than 20 students. The column labeled Student-Faculty Ratio is the number of students enrolled divided by the total number of faculty. Finally, the column labeled alumni Giving Rate is the percentage of alumni that made a donation to the university.

C++

Create a program that checks whether a number is a prime number and displays its factors if it is not a prime number.

Console

Prime Number Checker

Please enter an integer between 1 and 5000: 5

5 is a prime number.

Try again? (y/n): y

Please enter an integer between 1 and 5000: 6

6 is NOT a prime number.

It has 4 factors: 1 2 3 6

Try again? (y/n): y

Please enter an integer between 1 and 5000: 200

200 is NOT a prime number.

It has 12 factors: 1 2 4 5 8 10 20 25 40 50 100 200

Try again? (y/n): n

Bye!

Specifications

• A prime number is divisible by two factors (1 and itself). For example, 7 is a prime number because it is only divisible by 1 and 7.
• Assume that the user will enter a valid integer.
• If the user enters an integer that’s not between 1 and 5000, the program should display an error message.
• If the number is a prime number, the program should display a message.
• If the number is not a prime number, the program should display a message. Then, it should display the number of factors for the number and a list of those factors.
• Store the factors for each number in a vector.

Constructing a Yield Curve 1. Go to the St. Louis Federal Reserve FRED database, and find daily yield data on the following U.S. treasuries securities: One-month (DGS1MO) Three-month (DGS3MO) Six-month (DGS6MO) One-year (DGS1) Two-year (DGS2) Three-year (DGS3) Five-year (DGS5) Seven-years (DGS7) Ten-year (DGS10) 20-year (DGS20) 30-year (DGS30) Download the last full year of data available into a spreadsheet.

a. Construct a yield curve by creating a line graph for the most recent day of data available, and for the same day (or as close to the same day as possible) one year prior, across all maturities. How do the yield curves compare? What does the changing slope say about potential changes in economic conditions?

b. Determine the date of the most recent Federal Open Market Committee (FOMC) policy statement. Construct yield curves for both the day before the policy statement was released and the day on which the policy was released. Was there any significant change in the yield curve as a result of the policy statement? How might this be explained?

Define a sequence of string of 0’s and 1’s: 1 The first string, s0, is just the empty string "". The second string, s1, is 1. The third, fourth, fifth, . . . strings are defined as follows: si = si−11ti−1 where ti−1 is the reverse of si−1 with all 0s replaced by 1s and all 1s replaced by 0s. The first few strings are s0 = "", s1 = 1, s2 = 110, s3 = 1101100, s4 = 110110011100100. Write a Java program named “ q3d.java” that prints the first 10 strings in this sequence.

The transmitter transmits either an infinite sequence of 0s with a probability 2/3 or 1s with a probability 1/3. Each symbol, regardless of the others and the transmitted sequence is identified by the receiving device with an error with a probability 0.25. i) Given that the first 5 identified symbols are 0s, find the probability P (000000 | 00000) that the sixth received symbol is also zero. b) Find the average value of a random variable equal to the number of the first 1 written by the receiving device (for example, we received 00001...., our RV takes value 5).

In her recent book, titled Lean In, Facebook COO Cheryl Sandberg suggested that, “we need to teach women to raise their hands more.” As a curious researcher, you wonder if that is really the case. Using data from a local school survey, test the research hypothesis at the 0.01 level of significance that there is a difference in the number of times boys and girls raise their hands in class. Use the file homework5.xls (posted on Blackboard) to do this on Excel first. In the file you will find two variables, one for gender and one for hands up. Boys are coded as 1, and girls are coded with 2. Do this problem by hand as well, and double check your answers. What is your conclusion regarding the research hypothesis? Do you reach the same conclusion using Excel? Make sure you include your calculations by hand and the Excel outcome (copy and paste) to receive full credit.

18 students got a speeding ticket last year while 44 did not. Find a 99% CI for the population proportion of students that received a speeding ticket last year.