Bilboa Freightlines, S.A., of Panama, has a small truck that it uses for intracity deliveries. The truck is worn out and must be either overhauled or replaced with a new truck. The company has assembled the following information:
| Present Truck |
New Truck |
|||||
| Purchase cost (new) | $ | 24,000 | $ | 27,000 | ||
| Remaining book value | $ | 8,000 | ||||
| Overhaul needed now | $ | 7,000 | ||||
| Annual cash operating costs | $ | 11,000 | $ | 6,000 | ||
| Salvage value-now | $ | 3,000 | ||||
| Salvage value-five years from now | $ | 2,000 | $ | 5,000 | ||
If the company keeps and overhauls its present delivery truck, then the truck will be usable for five more years. If a new truck is purchased, it will be used for five years, after which it will be traded in on another truck. The new truck would be diesel-operated, resulting in a substantial reduction in annual operating costs, as shown above.
The company computes depreciation on a straight-line basis. All investment projects are evaluated using a 18% discount rate.
1. What is the net present value of the “keep the old truck” alternative?
2. What is the net present value of the “purchase the new truck” alternative?
3. Should Bilboa Freightlines keep the old truck or purchase the new one?
In: Accounting
Lowes, a home improvement retailer, has authorized its marketing research department to make a study of customers who have been issued a Lowes charge card. The marketing research department hopes to identify the significant variables that explain the variation in purchases. Once these variables are determined, the department intends to try to attract new customers who would be predicted to make a high volume of purchases. Twenty-five customers were selected at random, and values for the following variables were recorded:
y = Average monthly purchases (in dollars) at Lowes
x1 = Customer age
x2 = Customer family income
x3 = Family size
Part of the data appear in the Excel worksheet below. A regression model was developed using this sample data. The partial data and Excel regression output are provided below (complete data from all twenty-five customers was used for the analysis). Use this output to answer questions the questions that follow.
|
Observation |
Purchase Volume ($) |
Age |
Family Income ($) |
Family Size |
|
1 |
75 |
42 |
$ 29,000 |
4 |
|
2 |
129 |
36 |
25,000 |
2 |
|
3 |
105 |
38 |
25,000 |
2 |
|
4 |
42 |
54 |
17,000 |
3 |
|
5 |
17 |
49 |
15,000 |
5 |
|
6 |
? |
? |
? |
? |
|
7 |
? |
? |
? |
? |
|
8 |
? |
? |
? |
? |
|
9 |
? |
? |
? |
? |
|
10 |
? |
? |
? |
? |
|
11 |
? |
? |
? |
? |
|
12 |
? |
? |
? |
? |
|
13 |
? |
? |
? |
? |
|
14 |
? |
? |
? |
? |
|
15 |
? |
? |
? |
? |
|
16 |
? |
? |
? |
? |
|
17 |
? |
? |
? |
? |
|
18 |
? |
? |
? |
? |
|
19 |
? |
? |
? |
? |
|
20 |
? |
? |
? |
? |
|
21 |
105 |
30 |
26,000 |
2 |
|
22 |
121 |
27 |
18,250 |
3 |
|
23 |
14 |
62 |
10,250 |
3 |
|
24 |
37 |
50 |
18,100 |
2 |
|
25 |
43 |
26 |
24,500 |
4 |
|
SUMMARY OUTPUT |
||||
|
Regression Statistics |
||||
|
Multiple R |
||||
|
R Square |
||||
|
Adjusted R Square |
||||
|
Standard Error |
32.27240363 |
|||
|
Observations |
25 |
|||
|
ANOVA |
||||
|
df |
SS |
MS |
F |
|
|
Regression |
||||
|
Residual |
21871.66876 |
|||
|
Total |
38517.76 |
|||
|
Coefficients |
Standard Error |
t Stat |
P-value |
|
|
Intercept |
87.78972947 |
25.46767899 |
||
|
Age X1 |
-0.970467501 |
0.586041665 |
||
|
Family Income X2 |
0.002334262 |
0.000745097 |
||
|
Family Size X3 |
-8.723322293 |
7.495492501 |
||
12.
Required information
Examine the correlation matrix below.
|
Purchase Volume ($) |
Age |
Family Income ($) |
Family Size |
|
|
Purchase Volume ($) |
1 |
|||
|
Age |
-0.41 |
1 |
||
|
Family Income ($) |
0.46 |
0.05 |
1 |
|
|
Family Size |
-0.24 |
0.50 |
0.27 |
Does there appear to be any problem with multicollinearity in this regression model? Clearly and briefly discuss the criteria you used to arrive at your answer. If multicollinearity is indicated, identify the appropriate variable(s) involved.
In: Statistics and Probability
The following table shows death rates due to chronic obstructive pulmonary disease among adult men in the Southern states and Mountain states in 2005. Use this data to compare death rates due to this disease in the two regions of the country.
Death Rates Due to Chronic Obstructive Pulmonary Disease Among Adult Men by Region: 2005 (Deaths per 100,000)
|
Southern Region |
Mountain Region |
||
|
Washington, DC |
41.4 |
Utah |
64.5 |
|
Maryland |
56.8 |
Idaho |
98.1 |
|
Georgia |
87.5 |
New Mexico |
82.0 |
|
Virginia |
73.5 |
Colorado |
95.6 |
|
South Carolina |
86.4 |
Wyoming |
103.6 |
|
North Carolina |
94.0 |
Arizona |
74.1 |
|
Delaware |
77.3 |
Nevada |
95.2 |
|
Florida |
66.3 |
Montana |
98.1 |
|
West Virginia |
113.6 |
||
Source: National Vital Statistics System, 2005
www.cdc.gov/mmwr/preview/mmwrhtml/mm5745a4.htm
a. Which region had the highest mean death rate from chronic obstructive pulmonary disease? Show calculations.
b. Calculate the median death rate due to chronic obstructive pulmonary disease in each region. Show calculations and write an interpretation for the median in each case.
c. Describe the shape of the distribution in the Mountain states, and explain how you arrived at your description.
In: Statistics and Probability
1) Find a company whose ticker symbol contains your initials. (For example if your initials are: BK, then Bank of New York Mellon (BK) or Barnes and Noble (BKS) or Ambac Financial Group (ABK) would satisfy this requirement). If you cannot find any company with your initials, then use one of your initials (you choose which) twice. So if your initial are: SV, choose a company with either 2 S’s or 2 V’s in the ticker. If there is still no suitable company, then choose any company contained in the Dow Jones Industrial Average. 2) Obtain the financial statements for the three most recent years. Usually, the financial statements are in the company’s annual report, and are on, or can be downloaded from the company’s website, or 3) For the three most recent years, analyze the Du Pont identity for your chosen company. How has ROE changed over this period? How have changes in each component of the Du Pont identity affected ROE over this period? 4) Choose two competitors of the company you chose in parts 1,2 and 3. Analyze the Du Pont identity for the competitors (over the most recent three years). How does your company’s profitability compare to the two competitors? What conclusion, if any, can you make about the condition of your chosen company?
I chose Agilent Technologies but I couldnt post their financial statement here, please go to https://www.agilent.com/about/newsroom/presrel/2017/20nov-gp17023_print.html
# # #
| AGILENT TECHNOLOGIES, INC. | |||||||||||
| CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | |||||||||||
| (In millions, except per share amounts) | |||||||||||
| (Unaudited) | |||||||||||
| PRELIMINARY | |||||||||||
| Three Months Ended | |||||||||||
| October 31, | Percent | ||||||||||
| 2017 | 2016 | Inc/(Dec) | |||||||||
| Net revenue | $ | 1,189 | $ | 1,111 | 7 | % | |||||
| Costs and expenses: | |||||||||||
| Cost of products and services | 542 | 523 | 4 | % | |||||||
| Research and development | 89 | 84 | 6 | % | |||||||
| Selling, general and administrative | 325 | 321 | 1 | % | |||||||
| Total costs and expenses | 956 | 928 | 3 | % | |||||||
| Income from operations | 233 | 183 | 27 | % | |||||||
| Interest income | 7 | 3 | 133 | % | |||||||
| Interest expense | (20 | ) | (19 | ) | 5 | % | |||||
| Other income (expense), net | 6 | (16 | ) | — | |||||||
| Income before taxes | 226 | 151 | 50 | % | |||||||
| Provision for income taxes | 49 | 25 | 96 | % | |||||||
| Net income | $ | 177 | $ | 126 | 40 | % | |||||
| Net income per share: | |||||||||||
| Basic | $ | 0.55 | $ | 0.39 | |||||||
| Diluted | $ | 0.54 | $ | 0.38 | |||||||
| Weighted average shares used in computing net income per share: | |||||||||||
| Basic | 322 | 324 | |||||||||
| Diluted | 326 | 328 | |||||||||
| Cash dividends declared per common share | $ | 0.132 | $ | 0.115 | |||||||
| Years Ended | |||||||||||
| October 31, | Percent | ||||||||||
| 2017 | 2016 | Inc/(Dec) | |||||||||
| Net revenue | $ | 4,472 | $ | 4,202 | 6 | % | |||||
| Costs and expenses: | |||||||||||
| Cost of products and services | 2,063 | 2,005 | 3 | % | |||||||
| Research and development | 339 | 329 | 3 | % | |||||||
| Selling, general and administrative | 1,229 | 1,253 | (2 | %) | |||||||
| Total costs and expenses | 3,631 | 3,587 | 1 | % | |||||||
| Income from operations | 841 | 615 | 37 | % | |||||||
| Interest income | 22 | 11 | 100 | % | |||||||
| Interest expense | (79 | ) | (72 | ) | 10 | % | |||||
| Other income (expense), net | 19 | (10 | ) | — | |||||||
| Income before taxes | 803 | 544 | 48 | % | |||||||
| Provision for income taxes | 119 | 82 | 45 | % | |||||||
| Net income | $ | 684 | $ | 462 | 48 | % | |||||
| Net income per share: | |||||||||||
| Basic | $ | 2.12 | $ | 1.42 | |||||||
| Diluted | $ | 2.10 | $ | 1.40 | |||||||
| Weighted average shares used in computing net income per share: | |||||||||||
| Basic | 322 | 326 | |||||||||
| Diluted | 326 | 329 | |||||||||
| Cash dividends declared per common share | $ | 0.528 | $ | 0.460 | |||||||
In: Accounting
Thinking back to the “Practical Framework for Changing Behaviours” reading in module 1 (Health Communication Network, 2004), how do the constructs of the Health Belief Model and the Transtheoretical Model “fit” into the eight conditions that must be true for a person to perform that behavior?
In: Nursing
Thinking back to the “Practical Framework for Changing Behaviours” reading in module 1 (Health Communication Network, 2004), how do the constructs of the Health Belief Model and the Transtheoretical Model “fit” into the eight conditions that must be true for a person to perform that behavior?
In: Psychology
The Acme Company manufactures widgets. The distribution of
widget weights is bell-shaped. The widget weights have a mean of 60
ounces and a standard deviation of 7 ounces.
Use the Standard Deviation Rule, also known as the Empirical
Rule.
Suggestion: sketch the distribution in order to answer these
questions.
a) 95% of the widget weights lie between and
b) What percentage of the widget weights lie between 53 and 74
ounces? %
c) What percentage of the widget weights lie above 39
? %
In: Statistics and Probability
The Acme Company manufactures widgets. The distribution of
widget weights is bell-shaped. The widget weights have a mean of 64
ounces and a standard deviation of 5 ounces.
Use the Standard Deviation Rule, also known as the Empirical
Rule.
Suggestion: sketch the distribution in order to answer these
questions.
a) 95% of the widget weights lie between and
b) What percentage of the widget weights lie between 59 and 74
ounces? %
c) What percentage of the widget weights lie above 49 ?
In: Statistics and Probability
Williams & Sons last year reported sales of $74 million, cost of goods sold (COGS) of $60 and an inventory turnover ratio of 5. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 6 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Round your answer to the nearest dollar.
In: Finance
In: Accounting