Exercise One

The final grades in immunology at State University are recorded in the accompanying table (ranged from a possible 0 to 80; Also See Problem 13):

           29   74 51    42   55   75   74   74   79   74    43   79   55   74   25   04   69   78   74   52

           76 74   04    64   76   79   69   77   79   24    75   78   74 69   65   80   72   79   62   79

           08   66   79    43   76   72   45   73   05   79    74   74   75   38   60   02   74   78   79   73

           63   45   74    64   63   75   62   43   67   72    62   62   54   03   45   79   62   64   75   72

     From the above data (80 cases):

1. (5 pts.) construct a frequency table, include relative frequency and cumulative relative frequency.
2. (8 pts.) Construct a histogram and frequency polygon.
3. (2 pts.) Why did you select the intervals you used for your table and graphs?
4. (2 pts.) Is the above distribution skewed? Explain your answer.

(3 pts.) Define skewed. Demonstrate what that would look like graphically. Why is skewed data problematic?

(3 pts.) What is the relation between kurtosis and variability of the data?

(2 pts.) What do measures of central tendency not tell us? Demonstrate this problem graphically.

(11 pts.) Find the mean, median, and mode for all 80 cases in problem #9. Imagine that you are a graduate teaching assistant for the course. What does you tell us the professor about the students' performance in immunology? Be specific. (Note: The instructor uses a grading scale of A=72-80; B=63-71; C=54-62; D=45-53; F=44 or less.)

Chi Square Test of Independence A vehicle quality survey asked new owners a variety of questions about their recently purchased cars. One questions asked for the owner’s rating of the vehicle using categorical responses of average, outstanding, and exceptional. Another question asked for the owner’s education level with the categorical responses some high school, high school graduate, college graduate, and university graduate. Assume the sample data below are for 500 owners who had recently purchased a car.

a. Compute the value of x² for a test of independence.

b. Use a 0.05 level of significance and a test of independence to determine if a new owner’s vehicle quality rating is independent of the owner’s education?

c. What is the p-value and what is your conclusion?

d. Use the overall percentage of average, outstanding and exceptional ratings to comment upon how new owners rate the quality of their recently purchased cars.

Evaluate the capital budgeting project using the traditional Net Present Value (NPV) approach and the Internal Rate of Return (IRR) criterion and present findings.

Find if this new proposal will turn out to be a good investment for his company.

Capital budgeting and investment proposal – a new product line of branded shirts that the committee was considering for launch. What would be the basis for calculating the after-tax operating cash flows for the capital project? How would you arrive at the depreciation and working capital requirements for computing the NPV? What would be the basis for calculating the terminal year cash flows?

Indian Retail Market The Indian retail market is at the cusp of a sweet spot driven by strong GDP (Gross Domestic Product) growth, benign inflation, and rising per capita income and purchasing power of consumers. Currently, the retail industry accounts for more than ten percent of the Indian Gross Domestic Product and approximately eight percent of employment. The industry is expected to nearly double, from US$ 600 billion in 2015 to US$ 1 trillion, by 2020 driven by income growth, urbanization, and attitudinal shifts (Indian Terrain Annual Report, 2015–16). It has been estimated that, by 2030, the Indian apparel market, in particular, is expected to grow at a CAGR (compounded annual growth rate) of approximately 10–12%, backed by increasing affordability on account of an increase in disposable incomes, increase in aspirations, and a shift from unbranded to branded products by the burgeoning middle class. This trend is likely to be further accentuated by the rise of e-commerce companies that enable shopping from anywhere, thereby leading to increased penetration in small cities and towns (Indian Terrain Annual Report, 2015–16).

Company Background: Case

Bhatia Textiles is a small, privately-owned clothing company based in New Delhi, India. It was founded in 1995 by Harish Bhatia, a retired executive. Since then, the company had grown steadily by catering to middle to low income consumers in the Delhi-National Capital Region (NCR). The company recorded stellar growth of 50% in its sales during the last financial year of 2015–16. With a healthy operating margin ratio and low leverage levels, the company had been able to grow its profits at a CAGR of 25% during the last 10 years. With a good brand name and healthy financial metrics, the company was now looking to expand its footprint to new product lines catering to middle to high income customers. Project Investment Proposal Details The project is estimated to be of 10 years duration. It involves setting up new machinery with an estimated cost of as much as INR 500 million, including installation. This amount could be depreciated using the straight-line method (SLM) over a period of 10 years with a resale value of INR 15 million. The project would require an initial working capital of INR 20 million with cumulative investment in net working capital to be maintained at 10% of each year’s projected revenue. With the planned new capacity, the company would be able to produce 240,000 pieces of shirts each year for the next 10 years. In terms of pricing, each shirt can initially be sold at INR 1,300 apiece, which takes into account the target segment and competitor pricing.

The project proposal incorporates an annual increase of 3% in the price of the shirt to compensate for the inflationary impact. With regards to the raw material costs and other expenses, the project estimated the following details: • Raw material cost for manufacturing shirts at INR 400 per shirt, slated to rise by 5% per annum on account of inflation. • Other direct manufacturing costs at INR 125 per shirt with an annual increase of 5% per annum on account of inflation. • Selling, general, and administrative expenses (including employee expenses) at INR 35 million per annum, expected to increase by 10% each year. • Depreciation expense on the basis of SLM. • Tax rate was assumed to be 25%. Funding For funding of the expansion project, the promoters agreed to infuse 50% in the form of equity with the rest (50%) being financed from issue of new debt. Based on the current credit position and market scenario, new debt can be raised by the company at 12% per annum. Cost of equity was assumed to be 15%. The requisite discounting rate or weighted average cost of capital (WACC) for NPV and IRR calculations can now be calculated with the help of the above assumptions.

Although the project proposal estimates maximum annual production of 240,000 shirts, find the capital budgeting analysis under two demand scenarios: Optimistic and Expected. The likely annual demand estimated under each scenario is as follows:

Scenario Annual demand

Optimistic 240,000 Shirts

Expected 200,000 Shirts

Question 1

On the basis of the financial information given in the case, calculate the after-tax operating cash flows, NPV, and IRR under the Optimistic and Expected scenarios. Clearly specify the calculations required for the same.

According to a book published in 2011, 45% of the undergraduate students in the United States show almost no gain in learning in their first two years of college (Richard Arum et al., Academically Adrift, University of Chicago Press, Chicago, 2011). A recent sample of 1460 undergraduate students showed that this percentage is 31%. Can you reject the null hypothesis at a 10% significance level in favor of the alternative that the percentage of undergraduate students in the United States who show almost no gain in learning in their first two years of college is currently lower than 45%. Use both the p-value and the critical-value approaches. Round your answers for the observed value of z and the critical value of z to two decimal places, and the p-value to four decimal places. zobserved =Enter you answer; z_observed Entry field with incorrect answer p-value =Enter you answer; p-valueEntry field with incorrect answer Critical value =Enter you answer; Critical valueEntry field with incorrect answer now contains modified data Hence we can conclude that the percentage of undergraduate students in the U.S. who show almost no gain in learning in their first two years of college is currently Choose the answer from the menu in accordance to the question statementEntry field with incorrect answer 45%.

Jamie Lee and Rose Lee are both 36 years old. They have been married for six years, and they have a

son who is 3 years old and a daughter who is almost 2 years old. Rose Lee is expecting, and the family

just found out from their doctor that, instead of them being a family of three with the new baby, they

are now going to be a family of five because Rose is expecting triplets.

Jamie and Rose currently have Toyota Corolla, a compact car and they are planning to purchase a van

that can convey them to everywhere they go with the new additions.

Jamie and Rose are now worried about being able to provide for the growing family: diapers, formula,

college expenses times five. What if something happened to Jamie and Rose Lee? How would the

surviving parent be able to provide for such a large family?

Jamie and Rose Lee are your neighbors and they have approached you after learning that you are taking

Fundamental of Risk Management Course at University.

Jamie and Rose Lee got their prior auto insurance online. Among the questions Jamie and Rose Lee

were asking you were:

Please explain the following to the Lees:

a. Stock Insurers
b. Mutual Insurers
c. Blue Cross and Blue Shield Plans

d. Managed Care Plans

A survey asked a random sample of n=2752 US adults whether they had visited a public library in the last 12 months. THe results for males and females are shown in the following Table.

A) Find pf and Pm, the sample proportions who have visited a public library in the last 12 months, for females and males respectively. What is the difference in samle proportions Pf-Pm?

B) Find a 95% confidence interval for the difference in population proportions Pf-Pm.

c) Can we conclude from the confidence interval that there is a difference in the proportion? if so, are males or females more likely to visit the public library?

Tell us about the best leader (manager, teacher, coach, parent, military officer, etc.) you have ever worked with it. What characteristics or consistent behaviors did this leader possess (give examples)? Please use specific leadership theories (Situational Leadership, Path-Goal, etc.) and examples of how your favorite leader's characteristics and behaviors related to these theories.

Share your favorite leadership quote(s) from this list or elsewhere. Why does it speak to you? What does it say about your values related to leadership? Share a story of a famous leader or a leader that you have worked with who has exemplified this quote? Describe why you think this, and give examples if appropriate.

Define NAFTA, the European Union, and MERCOSUR.

What are trade sanctions and embargos.

List and describe an example of a global company that faces ethical issues for its operations outside the US.

                                                           Question Two

Faulu College has a total of 52 students undertaking three courses namely; Business Mathematics, Economics and Law. During recently conducted examinations, 13 students excelled in Business Mathematics and Law, 16 students excelled in Business Mathematics and Economics and 12 students excelled in Law and Economics. The number of students that excelled in Economics was 24 while 2 students excelled in none of the three courses. The number of students who excelled in Business Mathematics only was twice the number of students who excelled in Law only. The number of students who excelled in Law only was six times the number of students who excelled in Economics only.

Required:

1. Present the above information in the form of a venn diagram          
2. The number of students who excelled in all the three courses          
3. The number of students who excelled in two courses only               
4. The number of students who excelled in one course only                 

Question three

Parents of a young girl want to deposit a sum of money which will earn interest at the rate of 9% per year compounded semiannually. The deposit will be used to generate a series of eight semiannual payment of Sh. 2500 beginning 6 months after the deposit. These payments will be used to help finance their daughter’s high school education.

Required:

1. What amount must be deposited to achieve their goal?                  
2. How much interest will be earned on this deposit?                         (3marks)