In situations where the required rate of return is not constant for each year of the project, it is advantageous to use

A. The adjusted rate-of-return method

B. The internal rate-of-return method

C. The net present value method

D. Sensitivity analysis

If you have a four year bond with a coupon of 7% and a YTM of 5% verify that investing in this bond for the period of the bond’s Macauly duration results in no change to the overall future value of your cash flows if interest rates fall by 1%. Show all calculations.

Using Excel (if applicable),

Apple is now at the end of the final year of their new iPhone project. The equipment originally cost $550,000, of which 80% has been depreciated. Apple can sell the used equipment today for $100,000, and its tax rate is 21%. Will the company pay tax or receive a tax credit and how much?

Suppose that there is a perpetuity that pays $1,000 per year and that the appropriate discount rate is 5%.

1. What is the present value of the perpetuity if the first payment occurs one year from today?
2. What is the present value of the perpetuity if the first payment occurs today?

At the end of the year, a company offered to buy 4,320 units of a product from X Company for $12.00 each instead of the company's regular price of $17.00 each. The following income statement is for the 69,400 units of the product that X Company has already made and sold to its regular customers:

Sales $1,179,800

Cost of goods sold 595,452

Gross margin $584,348

Selling and administrative costs 183,216

Profit $401,132

For the year, variable cost of goods sold were $464,286, and variable selling and administrative costs were $86,056. The special order product has some unique features that will require additional material costs of $0.75 per unit and the rental of special equipment for $2,000.

1. Profit on the special order would be

2. The marketing manager thinks that if X Company accepts the special order, regular customers will be lost unless the selling price for them is reduced by $0.16. The effect of reducing the selling price will be to decrease firm profits by

Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $32,000. The estimated useful life was five years and the residual value was $4,000. Assume that the estimated productive life of the machine is 10,000 units. Expected annual production was year 1, 2,100 units; year 2, 3,100 units; year 3, 2,100 units; year 4, 2,100 units; and year 5, 600 units.

Required:

1. Complete a depreciation schedule for each of the alternative methods.
   a. Straight-line.
   b. Units-of-production.
   c. Double-declining-balance.

2. Which method will result in the highest net income in year 2? Does this higher net income mean the machine was used more efficiently under this depreciation method?

As part of the requirements by the university for an academic degree, final year students
are required to undertake a research and write a report called a dissertation. Unfortunately,
some students joined at the very last part of the semester and hence missed the introductory and foundation lectures. One of them approached you for assistance on what research is about and to deepen his/ her knowledge on the following issues. Briefly help this new
student on these to be able to also carry out a successful and sound research;

a. The definition of research. Briefly explain to him/her.
b. Any two occasions on which the term research is wrongly used according to
Walliman (2005).
c. The processes that he/she must go through to successfully carry out a sound
research.
d. Any two qualities of a quality research
e. Any three qualities that he /she should exhibit if he/she desires to be a quality
researcher.
f. The five common mistakes that researchers make; just list them.
g. Given that the student is also the manager of a firm, inform him on when a business
research should be conducted.

2. Indicate whether the following statements are true or not true and justify your response;
a. The sole purpose of research is to solve a problem.
b. Research Methodology and Research Methods mean and imply the same thing.
c. Systematic sampling involves choosing respondents based on reason that the
respondents sampled gives you the right information.

d. It is the research problem and questions that drives the title but not the reverse.

3. Past research indicates important gender differences in the use of networks (Hanson and
Blake 2009), and suggests that male SME owners are more likely to successfully network
and benefit from networks-driven performance in contrast to female SME owners (Watson 2012). In particular, as many women come to self-employment from domestic or nonmanagement background (Cromie and Birley 1992), and thus are likely to have previously

A company is interested in forecasting sales in the final quarter of the year based on the first three quarters by fitting a linear regression model.

Sales: 215   268   344
Quarter: 1 2 3

What proportion of the variability in sales can be explained by the model?

Also predict the sales for the fourth quarter

A brand of refrigerators, denoted A is guaranteed for 1 year. In a random sample of 50 refrigerators of brand A, 12 were observed to fail before the guarantee period ended. Estimate the true proportions of failures during the guarantee period, with 98% confidence interval. State the conclusion sentence and find the point estimator for the population proportion.