Despite the growth in digital entertainment, the nation’s 400 amusement parks have managed to hold on to visitors. A manager collects data on the number of visitors (in millions) to amusement parks in the United States. A portion of the data is shown in the accompanying table.

B-1) Estimate a linear trend model and an exponential trend model for the sample. (Round your answers to 2 decimal places.)

B-2 Calculate the MSE for both trends. (Do not round estimates or intermediate calculations. Round final answers to 2 decimal places.)

b-3. By comparing MSE, which of the above methods perform better? Exponential or Linear?

c-1. Using the model of best fit, make a forecast for visitors to amusement parks in 2008. (Do not round estimates or intermediate calculations. Round your answer to 1 decimal place.)

c-2. Using the model of best fit, make a forecast for visitors to amusement parks in 2009. (Do not round estimates or intermediate calculations. Round your answer to 1 decimal place.)

Maple Leafs Sports & Entertainment is considering purchasing one of the following two pieces of lighting equipment.
Equipment A has a purchase price of $10 million and will cost, $240,000 pre-tax, to operate on an annual basis. This equipment will have to be replaced every 5 years and has a salvage value of $1 million.
Equipment B on the other hand, has an initial cost of $14 million and costs $210,000 pre-tax, annually to operate. This equipment has a useful life of 7 years with a salvage value of $1.2 million.
Both equipment sets are in an asset class with a CCA Rate of 30% and are otherwise identical. The income tax rate is 40 percent and the appropriate discount rate is 10%.
Which equipment should the company purchase and why?

1. In recent years, a growing array of entertainment options competes for consumer time. By 2004, cable television and radio surpassed broadcast television, recorded music, and the daily newspaper to become the two entertainment media with the greatest usage (The Wall Street Journal, January 26, 2004). Researchers used a sample of 15 individuals and collected data on the hours per week spent watching cable television and hours per week spent listening to the radio.

    Individual     Television          Radio

           1                      22                    25

2                      8                      10

3                      25                    29

4                      22                    19

5                      12                    13

6                      26                    28

7                      22                    23

8                      19                    21

9                      21                    21

10                    23                    23

11                    14                    15

12                    14                    18

13                    14                    17

14                    16                    15

15                    24                    23

1. Use a .05 level of significance and test for a difference between the population mean usage for cable television and radio. What is the p-value? (You must state H₀and Ha, and compute the test statistic.)
2. Provide a 95% confidence interval estimate of the difference between the population mean usage for cable television and radio.

The MS Pony Entertainment Company is trying to determine its weighted average cost of capital for use in making several investment decisions. The firm's bonds were issued 6 years ago and have 14 years left until maturity. They carry an 8% coupon rate paid/compounded annually and are currently selling for $962.50. The firm's preferred stock carries a $4.60 dividend and is currently selling at $42.50 per share. Investment dealers have stated that floatation costs for new preferred will be 50 cents per share. The firm has significant retained earnings but will also need to sell new common stock to finance the projects it is now considering. MS is expected to pay a $2.50 per share dividend next year and is expected to maintain an 8% growth rate for the foreseeable future. The stock is currently priced at $50 per share, but new common stock will have flotation costs of 60 cents per share. Calculate the costs of the various components of MS. The firm's tax rate is 44%

Despite the growth in digital entertainment, the nation’s 400 amusement parks have managed to hold on to visitors. A manager collects data on the number of visitors (in millions) to amusement parks in the United States. A portion of the data is shown in the accompanying table.

SOURCE: International Association of Amusement Parks and Attractions.
Click here for the Excel Data File

a. Estimate the linear trend model to make forecasts for 2008. (Round your answers to 2 decimal places.)

yˆ =

b. Estimate the exponential trend model to make forecasts for 2008. (Round your answers to 2 decimal places.)

yˆ =

Pop psychology tests are a common form of entertainment online. Find a personality or relationship quiz (try the relationship tests on www.marsvenus.com or the personality tests at www.cosmomag.com).

Can you find any evidence for the reliability and validity of the quizzes on the websites? Choose one of these pop psychology tests and explain how you would test its reliability and validity; that is, explain the data that you would collect and state the results you would predict. You might frame your predictions in this form: "If this pop psychology scale were valid, it would be expected that it correlated with . . ." or "If this scale were reliable, it would be expected…"

Tom Hruise was an entertainment executive who had a fatal accident on a film set. Tom’s will directed his executor to distribute his cash and stock to his wife, Kaffie, the real estate to his church, The First Church of Methodology, and the remainder of his assets were to be placed in trust for his three children. Tom’s estate consisted of the following:

Curse of the Bambino Entertainment (CotBE) had the following securities outstanding and other information for 2017:

Preferred Stock:

Issue A Preferred Stock, cumulative and nonconvertible, 5%, $100 par: $1,000,000

Dividend payments are in arrears for three (3) years.

Issue B Preferred Stock, non-cumulative and convertible, 6%, $100 par: $4,000,000

Conversion rate is 4 common shares for every preferred share.

Common Stock:

Class A Common Stock, $1 par, 5,000,000 shares authorized, 1,000,000 shares

issued and outstanding at January 1, 2017 $1,000,000

Repurchased 120,000 shares on March 1, 2017
Repurchased 60,000 shares on July 1, 2017
Sold 100,000 of repurchased (treasury) shares on September 1, 2017

Stock Warrants - warrants are exchangeable for 100,000 common shares. The warrants were issued on October 1, 2016 and have a $15 exercise price per warrant. The average market price per share during 2017 was $20.

Stock Options – CotBE’s issued 100,000 stock options to key executives on January 1, 2017 which vest on December 31, 2019 and have an exercise price of $16 per option.

Convertible Bonds - 8% Convertible Bonds of $5,000,000 were sold at face value on July 1, 2017. Each $1,000 of bond is convertible into 120 shares of common stock.

Other Information:

- Net Income for 2017 was $1,700,000

- Income Tax Rate was 40% for 2017

- CotBE’s declared and paid a cash dividend of $200,000 on common stock during 2017.

REQUIRED- Calculate CotBE’s Basic and Diluted EPS for the year ended December 31, 2017, show all calculations.

Morrison Corp. is an entertainment firm that derives approximately 30% of its income from the Casino Division, which manages gambling facilities. As auditor for Morrison Corp., you have recently overheard the following discussion between the controller and financial vice-president.

VICE-PRESIDENT: If we sell the Casino Division, it seems ridiculous to segregate the results of the sale in income statement. Separate categories tend to be absurd and confusing to the stockholders. I believe that we should simply report the gain on the sale as other income or expense without detail.

CONTROLLER: Professional pronouncements would require that we disclose this information separately in the income statement. If a sale of this type is considered unusual and infrequent, it must be reported an extraordinary item.

VICE-PRESIDENT: What about the walkout we had last month when employees were upset about their commission income? Would this situation not also be an extraordinary item?

CONTROLLER: I am not sure whether this item would be reported as extraordinary or not.

VICE-PRESIDENT: Oh well, it doesn’t make any difference because the net effect of all these items is immaterial, so no disclosure is necessary.

On the basis of the foregoing discussion, answer the following questions:

Who is correct in handling the sale? What would be the correct income statement presentation for the sale of the Casino Division?

How should the walkout by the employees be reported? Justify your answer.

What do you think about the vice-president’s observation on materiality? Explain

What are the earnings per share implications of these topics? Discuss in detail.

Tom Hruise was an entertainment executive who had a fatal accident on a film set. Tom’s will directed his executor to distribute his cash and stock to his wife, Kaffie, the real estate to his church, The First Church of Methodology, and the remainder of his assets were to be placed in trust for his three children. Tom’s estate consisted of the following: (Refer toExhibits 25-1 and Exhibit 25-2.)

a. Tom made a taxable gift of $6.20 million in 2011. Compute the estate tax for Tom’s estate.