The market price of a 18.00-year STRIPS is $386.00 The yield to maturity is ____%.

1. Let A be the set whose elements are the months of the year that begin with the letter J. A = { }

2. Define a set that is empty. Let B be the set: _________________________________________________________________________ _________________________________________________________________________

3. The following data was collected from a survey of 350 San Antonio residents Are you a Spurs fan? YES NO Male 204 19 Female 113 14

a. How many males were surveyed?

b. How many spurs fans were surveyed?

c. How many San Antonians surveyed are not fans and male? d. How many San Antonians surveyed are fans or female?

e. How many San Antonians surveyed are fans or male? f. How many San Antonians surveyed are not fans or female?

4. Let

X = {1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15}

A = {1, 2, 5, 7, 8, 10, 14, 15} and B = {2, 3, 5, 9, 10, 13} and C = {2, 7, 10, 12, 14, 15}

a. A ∩ C = b. A ∪ B =

c. B ∩ C = d. A ∩ B ∩ C =

5. Gilbert asked his group of 10 friends from middle school the following questions:

Do you ride the bus? Do you get picked up?

Their responses are shown in the Venn diagram below:

Bus Pickup

Jenna Ron Leslie

Rick Vic Debbie

Johnny Pablo

Use the Venn diagram to list the elements of each set.

a. The set of students who ride the bus

b. The set of students who get picked-up

c. The set of students who ride the bus or get picked up

d. The set of students who ride the bus and get picked up

e. The set of students who don’t ride the bus nor get picked up

f. The set of students who ride the bus but do not get picked up Jenna Rick Johnny Leslie Debbie Pablo

6. A group of 100 people touring Europe includes 51 people who speak French 57 who speak Polish, and 16 who speak neither language.

a. Construct a Venn diagram describing this situation.

b. How many people in the group speak both French and Polish?

7. A small combination lock on a suitcase has 4 wheels, each labeled with the 10 digits 0 to 9.

a. How many 4 digit combinations are possible if no digit is repeated?

b. If digits can be repeated?

c. If successive digits must be different?

8. A card is drawn from a standard 52-card deck. If the card is an ace, you win $12; otherwise, you lose $2. What is the expected value of the game?

9. Ten thousand raffle tickets are sold at $2 each for a local benefit. Tickets will be drawn at random and monetary prizes awarded as follows: 2 prizes of $1,000, 4 prizes of $500, and 10 prizes of $100. What is the expected value if you buy 1 raffle ticket?

10. An insurance company charges an annual premium of $75 for a $200,000 insurance policy against a house burning down. If the empirical probability that a house burns down in a given year is 0.0003, what is the expected value of the policy to the insurance company?

A store owner will change the stock of snowboards for the next year if the average demand over the 12 winter Saturdays in a season (considered a random sample) is over 154 or under 134. These limits aren’t equidistant from the long-run process mean of 147 because the costs of oversupply and undersupply are different. If the population mean stays at 147. What is the probability that the manager will change the stock?

The City of Pfeiffer starts the year of 2017 with the general fund and an enterprise fund. The general fund has two activities: education and parks/recreation. For convenience, assume that the general fund holds $144,000 cash and a new school building costing $1,180,000. The city utilizes straight-line depreciation. The building has a 20-year life and no salvage value. The enterprise fund has $65,000 cash and a new $360,000 civic auditorium with a 30-year life and no salvage value. The enterprise fund monitors just one activity, the rental of the civic auditorium for entertainment and other cultural affairs.

The following transactions for the city take place during 2017. Assume that the city’s fiscal year ends on December 31.

Decides to build a municipal park and transfers $72,000 into a capital projects fund and immediately expends $20,600 for a piece of land. The creation of this fund and this transfer were made by the highest level of government authority.

Borrows $113,400 cash on a long-term bond for use in creating the new municipal park.

Assesses property taxes on the first day of the year. The assessment, which is immediately enforceable, totals $618,600. Of this amount, $525,800 will be collected during 2017 and another $51,600 is expected in the first month of 2018. The remainder is expected about halfway through 2018.

Constructs a building in the park in (b) for $40,000 cash so that local citizens can play basketball and other sports. It is put into service on July 1 and should last 10 years with no salvage value.

Builds a sidewalk around the new park for $10,000 cash and puts it into service on July 1. It should last for 10 years, but the city plans to keep it up to a predetermined quality level so that it will last almost indefinitely.

Opens the park and charges an entrance fee of only a token amount so that it records the park, therefore, in the general fund. Collections during this first year total $4,000.

Buys a new parking deck for $220,000, paying $22,000 cash and signing a long-term note for the rest. The parking deck, which is to go into operation on July 1, is across the street from the civic auditorium and is considered part of that activity. It has a 20-year life and no salvage value.

Receives a $110,000 cash grant for the city school system that must be spent for school lunches for the poor. Appropriate spending of these funds is viewed as an eligibility requirement of this grant. During the current year, $40,700 of the amount received was properly spent.

Charges students in the school system a total fee of $6,600 for books and the like. Of this amount, 90 percent is collected during 2017 with the remainder expected to be collected in the first few weeks of 2018.

Buys school supplies for $23,000 cash and uses $17,800 of them. The general fund uses the purchases method.

Receives a painting by a local artist to be displayed in the local school. It qualifies as a work of art, and officials have chosen not to capitalize it. The painting has a value of $83,700. It is viewed as inexhaustible.

Transfers $20,600 cash from the general fund to the enterprise fund as a capital contribution.

Orders a school bus for $102,000.

Receives the school bus and pays an actual cost of $105,000. The bus is put into operation on October 1 and should last for five years with no salvage value.

Pays salaries of $247,000 to school teachers. In addition, owes and will pay $30,800 during the first two weeks of 2018. Vacations worth $23,600 have also been earned but will not be taken until July 2018.

Pays salaries of $43,000 to city auditorium workers. In addition, owes and will pay $3,500 in the first two weeks of 2018. Vacations worth $5,800 have also been earned but will not be taken until July 2018.

Charges customers $150,800 for the rental of the civic auditorium. Of this balance, collected $127,600 in cash and will collect the remainder in April 2018.

Pays $10,400 maintenance charges for the building and sidewalk in (d) and (e).

Pays $16,200 on the bond in (b) on the last day of 2017: $5,800 principal and $10,400 interest.

Accrues interest of $15,000 on the note in (g) as of the end of 2017, an amount that it will pay in June 2018.

Assumes that a museum that operates within the city is a component unit that will be discretely presented. The museum reports to city officials that it had $48,500 of direct expenses this past year and $57,700 in revenues from admission charges. The only assets that it had at year-end were cash of $27,700, building (net of depreciation) of $346,300, and a long-term liability of $242,400.

Prepare the 2017 government-wide financial statements for this city. Assume the use of the modified approach.

Prepare a statement of net position. (Amounts to be deducted should be indicatedby a minus sign.)

A firm acquires an asset for $120,000 at the beginning of year 1. The asset will generate $50,000 of revenues in each year. For financial reporting purposes, the asset will be depreciated straight line to zero over four years. For tax purposes, it will be depreciated straight line to zero over three years. Assume the firm has no other expenses apart from depreciation expense. The tax rate is 40%. Use this information to answer Questions (7) - (12).

At the end of year 2 (two), the firm’s balance sheet will report a:

A) deferred tax asset of $4,000 B) deferred tax asset of $8,000. C) deferred tax liability of $4,000. D) deferred tax liability of $8,000.

The records at the end of January of the current year for Young Company showed the following for a particular kind of merchandise:

Beginning Inventory at FIFO: 17 Units @ $20 = $340

Beginning Inventory at LIFO: 17 Units @ $16 = $272

Required:

1. Compute the inventory turnover ratio for the month of January under the FIFO and LIFO inventory costing methods.

2. Which costing method is the more accurate indicator of the efficiency of inventory management?

You will be paying $10,800 a year in tuition expenses at the end of the next two years. Bonds currently yield 9%.

a. What is the present value and duration of your obligation? (Do not round intermediate calculations. Round "Present value" to 2 decimal places and "Duration" to 4 decimal places.)

b. What is the duration of a zero-coupon bond that would immunize your obligation and its future redemption value? (Do not round intermediate calculations. Round "Duration" to 4 decimal places and "Future redemption value" to 2 decimal places.)

You buy a zero-coupon bond with value and duration equal to your obligation.

c-1. Now suppose that rates immediately increase to 10%. What happens to your net position, that is, to the difference between the value of the bond and that of your tuition obligation? (Enter your answer as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.)

Net position changes by            $

c-2. What if rates fall to 8%? (Enter your answer as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.)

Net position changes by            $

Payments of $1000 are invested into an account at the end of each year for 8 years, earning 8% effective per annum. Interests can only be reinvested at 6% for the first 6 years and 7% thereafter. Find the accumulated value of the investment after 10 years. (Answer: $12092.96)