Suppose we wish to build a multiple regression model to predict the cost of rent (dollars) in a city based on population (thousands of people), and income (thousands of dollars). Use the alpha level of 0.05.

5. What are the values of the estimated slope for the variable “Population”? Interpret the value in terms of actual names of IVs and the DV.

6. Does Income significantly influence the Rent at the alpha level of 0.01? Make sure to show which values you use to make the decision.

7. Does Population significantly influence the Rent at the alpha level of 0.01? Make sure to show which values you use to make the decision.

A corporation operates snow sports facilities in Canada. The corporation has an opportunity to lease a location in the mountains for 10 years for $60,000 per year to open a new snow sports location. They will also have access to trails in the provincial park at an additional cost of $24,000 per year for trail maintenance. To secure the lease they paid a non-refundable deposit of $10,000 last year. The corporation will be required to purchase snowshoes, cross-country skis and other equipment for an estimated amount of $275,000. The equipment is depreciated on a straight-line basis over 10 years. They also estimate that they will need to spend $25,000 to renovate the interior of the building at the start of the lease. In addition, management has provided the following information regarding the expected future annual earnings and expenses of the new project:

The appropriate discount rate for the project is 10%. Ignore taxes.

Calculate the annual incremental operating cash flow of the project using the year 1-10 cash flows only.

Incremental annual revenue = ?

Incremental annual costs = ?

Incremental annual operating cash flow = ?

NPV = ?

part 1)

A farmer is constructing a rectangular pen with two additional fences across it, separating it in three equal parts as shown below. Find the maximum area that can be enclosed in this way with 3200 m of fencing.

the maximum area is  m2?

part 2)

A fence must be built to enclose a rectangular area of 134640 m^2. Fencing costs $2.75 per meter for the two sides facing north and south, and $3.40 per meter for the other two sides. Find the size and cost of the least expensive fence.

The sides facing north and south should be  m long.

The other two sides should be  m long.

The fence will cost $

part 3)

Find the dimensions of the open-topped box with a square base that has volume 4 in^3 and requires the minimum amount of material to build.

(Hint: let x be the length of the base. Express the areas of the base and of four other sides in terms of x. Minimize the sum of these areas.)

The base of the box will have sides of length  in and the height of the box will be  in.

part 4)

An open box will be made by cutting a square from each corner of a 5 ft by 8 ft piece of cardboard and then folding up the sides. What size square should be cut from each corner in order to produce a box of maximum volume?

(Hint: draw a diagram. )

part 5)

A closed box with a square box must be constructed so that its volume is 250 cm3cm3. The material for the top and the bottom of the box costs $8 per square cm. The material for the sides costs $4 per square cm.

a) Find the dimension of the box that will minimize the cost.

Answer: the base of the box will have sides of length  cm and the height of the box will be  cm.

b) Find the minimum total cost.

Answer: $

QWY company is looking to build a manufacturing plant overseas. Project = 5yrs The cost of the land for this project is £6,500,000. The land can be sold for £4,500,000 in five years’ time, irrespective of what is built on it (ignore taxes). The manufacturing plant will cost £15,000,000. The company uses straight line method of depreciation and predicts to sell the plant for £5,000,000 (ignore taxes) at the end of the project. The expectation from the project is to sell 12,000 units per year at a selling price of £9,500 per unit. The variable production costs are £8,500 per unit in each of the five years. The company will incur £1,000,000 in fixed costs in each of the five years. You are given the following market data on the firm’s securities:

Debt – 150,000 bonds outstanding, 7% coupon, paid annually; 15 years to maturity; each bond has £100 par value and currently sells at 92% of par.

Ordinary shares – 300,000 shares outstanding, market price £75 per share; the beta is 1.3

Preference shares – 20,000 shares outstanding with 5% dividend, par value £100, market price £70 per share The market risk premium is 8%, and the risk-free rate is 5%. The management foresees that the new project is riskier than a typical project they undertake. Therefore, an adjustment factor of 1.5% to the cost of capital needs to be done to account for the increased risk. The company’s tax rate is 30%.

You are required to:

i) Calculate the project’s initial cash out flow at time t = 0.

ii) Calculate the market value of debt, ordinary shares and preference shares, as well as for the company as a whole.

iii) Calculate the appropriate cost of capital to use when evaluating the project. (round it up or down to the nearest whole percentage)

iv) What is the project’s annual operating cash flow? v) What is the NPV for the project?

John’s Custom Computer Shop (JCCS) assembles computers for both individual and corporate customers. The company is organized into two divisions: Personal and Business. Once a computer is built, it is shipped to the customer. Billing for all customers is handled by the corporate Accounts Receivable Department. Accounts Receivable performs two major activities: billing and dispute resolution. Billing refers to preparing and sending the bills as well as processing the payments. Dispute resolution occurs when a customer refuses to pay, usually due to an error in billing.

The costs of the Accounts Receivable Department are allocated to the two divisions based on the number of bills prepared. Kyle, the manager of the Business division, has complained that the allocated costs from Accounts Receivable are beginning to make the business division look unprofitable and has asked you to recommend some changes to the allocation system. If he agrees with your recommendation, he will pass them on to the chief financial officer.

Data on costs and activities in the Accounts Receivable Department follow.

The Accounts Receivable Department incurred the following costs during the year.

Required:

a. Under the current allocation system, what is the cost that will be allocated from Accounts Receivable to Personal? To Business?

Allocated Costs: Personal? Business?

b. Suppose the company implements an activity-based cost system for Accounts Receivable with two activities, billing and dispute resolution. What is the cost that will be allocated from Accounts Receivable to Personal? To Business? Use the number of bills prepared as the cost driver for billing costs and the number of disputes for dispute resolution costs.

Billing for Personal? Billing for Business?

Dispute Resolution for Personal? Dispute Resolution for Business?

Environmentalists concerned about the impact of high-frequency radio transmissions on birds found that there was no evidence of a higher mortality rate among hatchlings in nests near cell towers. They based this conclusion on a test using alpha=0.05. Would they have made the same decision at alpha=0.10? How about alpha=0.01? Explain. (Hint: It would help if you write the null and alternative hypotheses).

Please show all work. Typed work only. no handwritten.

1.Describe the two different ways in which an ADI may be exposed to interest rate risk.  What would it do – in respect of the two different aspects of interest rate risk – if it thought interest rates were going to increase in the near future and wanted to take advantage of this prediction?  Explain how these actions will be of benefit if interest rates do increase as predicted?

2.Describe how a bank could use derivatives to hedge an exposure to decreasing interest rates.

Explain why each of the following actions would negatively impact the results of a recrystallization procedure. Answer each in two sentences or less.

i) After achieving proper dissolution, immediately cooling the solution in an ice bath.

ii) Dissolving all of the material at room temperature, then heating to near the solvent boiling point, followed by cooling to 0 °C.

iii) Upon collection of the recrystallized material on a filter, rinsing with 1-2 mL of room temperature solvent.