Stark Industries wants to sell 15-year bonds to the school of the gifted and talented at Xavier’s School. The par value of bonds will be at $1,000 and they pay interest annually. Each bond will have 10 warrants that will give Dr. Charles Xavier the right to purchase one share of Stark Industries stock per warrant. Tony Stark’s bankers estimate that each warrant will have a value of $25.00. A similar straight-debt issue would require an 8% coupon rate. At what amount would the coupon rate need to be on the bonds with the warrants so that this bundled combo would be able to sell for $1,000?

4.66%

5.08%

5.42%

5.84%

6.17%

a. The Institute of Education Sciences measures the high school dropout rate as the percentage of 16-through 24-year-olds who are not enrolled in school and have not earned a high school credential. Last year, the high school dropout rate was 8.1%. A polling company recently took a survey of 1,000 people between the ages of 16 and 24 and found that 6.5% of them are high school dropouts. The polling company would like to determine whether the dropout rate has decreased. At a 5% significance level, the p-value and α are _____________________.

• p-value = 0.0318 and α = 0.025

• p-value = 0.0210 and α = 0.025

• p-value = 0.0210 and α = 0.05

• p-value = 0.0318 and α = 0.05

b. A schoolteacher is worried that the concentration of dangerous, cancer-causing radon gas in her classroom is greater than the safe level of 4pCi/L. The school samples the air for 36 days and finds an average concentration of 4.4pCi/L with a standard deviation of 1pCi/L. The value of the test statistic is ___________.

• z = –2.40

• t₃₅ = –2.40

• t₃₅ = 2.40

• z = 2.40

c. The owner of a large car dealership believes that the financial crisis decreased the number of customers visiting her dealership. The dealership has historically had 800 customers per day. The owner takes a sample of 100 days and finds the average number of customers visiting the dealership per day was 750. Assume that the population standard deviation is 350. The value of the test statistic is ____________.

• t₉₉ = –1.429

• t₉₉ = 1.429

• z = 1.429

• z = –1.429

d. The alternative hypothesis typically ___________.

• corresponds to the presumed default state of nature

• states the probability of rejecting the null hypothesis when it is true

• contests the status quo, for which a corrective action may be required

• states the probability of rejecting the null hypothesis when it is false

e. When conducting a hypothesis test concerning the population mean, and the population standard deviation is unknown, the value of the test statistic is calculated as __________.

• tdf=p−−popo(1−po)n√tdf=p−−popo(1−po)n

• z=p−−popo(1−po)n√z=p−−popo(1−po)n

• tdf=x−−μos/n√tdf=x−−μos/n

• z=x−−μoσ/n√

f. When conducting a hypothesis test concerning the population mean, and the population standard deviation is known, the value of the test statistic is calculated as _________.

• z=p−−popo(1−po)n√z=p−−popo(1−po)n

• tdf=x−−μos/n√tdf=x−−μos/n

• z=x−−μoσ/n√z=x−−μoσ/n

• tdf=p−−popo(1−po)n√

a. The Institute of Education Sciences measures the high school dropout rate as the percentage of 16-through 24-year-olds who are not enrolled in school and have not earned a high school credential. Last year, the high school dropout rate was 8.1%. A polling company recently took a survey of 1,000 people between the ages of 16 and 24 and found that 6.5% of them are high school dropouts. The polling company would like to determine whether the dropout rate has decreased. At a 5% significance level, the p-value and α are _____________________.

• p-value = 0.0318 and α = 0.025

• p-value = 0.0210 and α = 0.025

• p-value = 0.0210 and α = 0.05

• p-value = 0.0318 and α = 0.05

b. A schoolteacher is worried that the concentration of dangerous, cancer-causing radon gas in her classroom is greater than the safe level of 4pCi/L. The school samples the air for 36 days and finds an average concentration of 4.4pCi/L with a standard deviation of 1pCi/L. The value of the test statistic is ___________.

• z = –2.40

• t₃₅ = –2.40

• t₃₅ = 2.40

• z = 2.40

c. The owner of a large car dealership believes that the financial crisis decreased the number of customers visiting her dealership. The dealership has historically had 800 customers per day. The owner takes a sample of 100 days and finds the average number of customers visiting the dealership per day was 750. Assume that the population standard deviation is 350. The value of the test statistic is ____________.

• t₉₉ = –1.429

• t₉₉ = 1.429

• z = 1.429

• z = –1.429

d. The alternative hypothesis typically ___________.

• corresponds to the presumed default state of nature

• states the probability of rejecting the null hypothesis when it is true

• contests the status quo, for which a corrective action may be required

• states the probability of rejecting the null hypothesis when it is false

e. When conducting a hypothesis test concerning the population mean, and the population standard deviation is unknown, the value of the test statistic is calculated as __________.

• tdf=p−−popo(1−po)n√tdf=p−−popo(1−po)n

• z=p−−popo(1−po)n√z=p−−popo(1−po)n

• tdf=x−−μos/n√tdf=x−−μos/n

• z=x−−μoσ/n√

f. When conducting a hypothesis test concerning the population mean, and the population standard deviation is known, the value of the test statistic is calculated as _________.

• z=p−−popo(1−po)n√z=p−−popo(1−po)n

• tdf=x−−μos/n√tdf=x−−μos/n

• z=x−−μoσ/n√z=x−−μoσ/n

• tdf=p−−popo(1−po)n√

Math & Music: There is a lot of interest in the relationship between studying music and studying math. We will look at some sample data that investigates this relationship. Below are the Math SAT scores from 8 students who studied music through high school and 11 students who did not. Test the claim that students who study music in high school have a higher average Math SAT score than those who do not. Test this claim at the 0.05 significance level.

If you are using software, you should be able copy and paste the data directly into your software program.

(a) The claim is that the difference in population means is positive (μ₁ − μ₂ > 0). What type of test is this?

This is a left-tailed test.

This is a two-tailed test.  

  This is a right-tailed test.

(b) Use software to calculate the test statistic or use the formulat =  

where δ is the hypothesized difference in means from the null hypothesis. Round your answer to 2 decimal places.

t =

To account for hand calculations -vs- software, your answer must be within 0.01 of the true answer.

(c) Use software to get the P-value of the test statistic. Round to 4 decimal places.
P-value =

(d) What is the conclusion regarding the null hypothesis?

reject H₀

fail to reject H₀    

(e) Choose the appropriate concluding statement.

The data supports the claim that students who study music in high school have a higher average Math SAT score than those who do not.

There is not enough data to support the claim that students who study music in high school have a higher average Math SAT score than those who do not.   

We reject the claim that students who study music in high school have a higher average Math SAT score than those who do not.

We have proven that students who study music in high school have a higher average Math SAT score than those who do not.

Part II: Case Study

Market Research Example: How Coca-Cola Lost Millions with This Mistake

Author: Scott Smith, Ph.D.

Source: Qualtrics

In the mid-1980s, the Coca-Cola Company made a decision to introduce a new beverage product (Hartley, 1995, pp. 129–145).

The company had evidence that taste was the single most important cause of Coke’s decline in the market share in the late 1970s and early 1980s.

A new product dubbed “New Coke” was developed that was sweeter than the original-formula Coke.

Almost 200,000 blind product taste tests were conducted in the United States, and more than one-half of the participants favored New Coke over both the original formula and Pepsi.

The new product was introduced and the original formula was withdrawn from the market. This turned out to be a big mistake! Eventually, the company reintroduced the original formula as Coke Classic and tried to market the two products simultaneously.

Ultimately, New Coke was withdrawn from the market.

What went wrong?

Two things stand out.

First, there was a flaw in the market research taste tests that were conducted: They assumed that taste was the deciding factor in consumer purchase behavior.

Consumers were not told that only one product would be marketed. Thus, they were not asked whether they would give up the original formula for New Coke.

Second, no one realized the symbolic value and emotional involvement people had with the original Coke.

The bottom line on this is that relevant variables that would affect the problem solution were not included in the research.

Check out these old school Coke commercials.

Link: https://youtu.be/o4YvmN1hvNA

Link: https://youtu.be/ky45YGUA3co

So, what’s the lesson?

Market research matters.

When done correctly you gain decision making power. If done incorrectly, it could end up costing your company millions.

Questions

1. What are the reasons for New Coke to be withdrawn from the market?

2. What is the emotional involvement people had with the original Coke?

3. How could companies avoid this type of market failure? Please list at list three factors that you would use to predict a new product’s market performance and explain.

intermediate accounting 1

Question 2 - Application

MH Plumbing Inc. (MH) is the largest plumbing contractor in Moncton, Alberta. Information on selected transactions/events is given below:

a.      On 15 January 2012, MH purchased land and a warehouse building for $455,000. The land was appraised at $175,000, while the building was appraised at $375,000.

b.      During January and February 2012, MH spent $53,200 on the warehouse building, renovating it for its expected use as a storage and shipping facility.

c.       MH used the warehouse building from February 2012 until August 2018. The building was expected to have a 20-year life and a residual value of $11,000.

d.      In late August 2018, MH traded the warehouse and land for another facility on the other side of town. The second facility was slightly larger. MH paid $33,750 to the vendor, and $19,800 in legal fees as a result of the transaction. The new warehouse was appraised at $425,000, and the new land at $180,000. This warehouse facility was expected to have a useful life of 18 years and a residual value of $7,800.

e.      MH used the new warehouse facility from August 2018 until February 2019. At that time, a fire destroyed the warehouse. MH received $356,800 from the insurance company.

f.        MH called for tenders for construction of a new warehouse building in March 2019, but the lowest bid was $788,000. The company decided to self-construct and began in May 2019. Monies spent were as follows:

g.      MH received a $100,000 investment tax credit in 2019 as a result of the building activities, which reduced 2019 taxes payable.

h.      MH occupied its new warehouse in September 2019. It was appraised at $650,000. It was expected to last for 25 years, and have a residual value of $20,000.

Required:

Prepare journal entries to record all transactions listed above, including annual depreciation to the end of 2019. Record annual depreciation using a declining-balance method of 10% for buildings, and 8% for parking lots. MH records a full year of depreciation in the year of acquisition and no amortization in the year of disposal. Justify any decisions made with respect to accounting policy or application.

Part 1

Question 1

Develop two simulation models of tossing two six-sided dice (numbered 1 through 6 on the six faces).Model 1: Simulate rolling a single die twice and add the total. Model 2: Simulate a combined roll of two dice, giving a number from 2 through 12 with appropriate probabilities.

Part II

Chapter 4

Assignments

Exercise 1 & Exercise 3

Q1

A potato chip manufacturer was having problems with the Weights and Measures inspectors after the inspectors found some bags containing less than the required 42.5 grams (formerly 1.5 ounces) of chips. In response, the manufacturer had increased the weight setting on the bagging machines to 50 grams, but were now over-packing the bags and, consequently, giving away chips.A random sample of bags were taken off the line and the chips in the bags were carefully weighed, as shown below:

1.     What is the average weight of chips in a bag?
2.     What is the standard deviation of the chip weights?
3.     According to the three rules of thumb, how many bags per 1,000 are expected to be below the required minimum weight of 42.5 grams?
4.     Plot a histogram of the chip weights. Does the data appear to be well approximated by a normal distribution?
5.     Using the normal distribution approximation, how many bags per 1,000 are expected to be below the required minimum weight of 42.5 grams?
6.     What setting (mean chip weight) should be used to ensure that “almost all” the bags contain at least 42.5 grams of chips while minimizing the excess chips in the bags?

Q3

A package goods supplier designed a new package (“white”) that it thought was more appealing than its old package (“blue”). It conducted a 10-week trial of the two packages in selected “matched” stores with the results shown below (sales in thousands of dollars).

1. Is there any statistical evidence that one or other package leads to higher sales?

Part III

After reading provide Excel Spreadsheet solution and anaswer question .   please Please answer the questions below and attached Excel Spreadsheet.   

  Chad operated an automobile sales business. A major dealer in town offered Chad a one-time opportunity to help them sell some “trade-ins.” Under this deal (see table below), Chad could take one used car at a time from the dealer and try to sell it. If he sold it, he could take another. There were three cars they wanted Chad to try to sell. The Dealer concluded the offer as follows: “Chad, we have not dealt with you before so we plan to proceed cautiously: I’m sure you understand. If you accept this deal, you must take the compact first. If you sell the compact, then you can choose either of the other two, or you can end the deal. If you sell the second car, then you can take the third if you wish.”

Car                   Chad’s Commission (On Sale)            Chad’s Selling Costs                Chad’s Estimate of Probability of Sale

Compact         $900                                                   $600                                        ¾

Standard         $1,500                                                 $200                                        2/3

Luxury              $3,000                                                 $600                                       50/50

Questions.

If he took a car, Chad would incur the selling costs in trying to sell the car, but risked not making the sale. What should he do? Carlie needed a personal computer (PC) for school but her budget was tight, so she decided on a used machine. After some searching, she was down to two possibilities. One she had found in a national franchized computer store, where she could purchase the PC for $800 with a one-year guarantee. But she was intrigued by a second possibility: a local charity store was offering a used machine that had been donated (exactly the same model as in the store) for $500. Carlie talked to a computer repair specialist, who said the principal problem with this model of PC was the hard drive, which was prone to failure: he estimated that half of the PCs of this model and age would require a new drive. He offered to test the computer and check the condition of the drive for $60. If the drive was no good, a new drive could be fitted for $300 and would be guaranteed for one year. He added a qualification that his testing was not perfect: about 25% of drives that passed his testing failed soon afterwards requiring a new drive ($300) plus a service charge of $100 for diagnosing the problem.

Question2 Please answer the question below and attached Excel Spreadsheet.  

Carlie needed a personal computer (PC) for school but her budget was tight, so she decided on a used machine. After some searching, she was down to two possibilities. One she had found in a national franchized computer store, where she could purchase the PC for $800 with a one-year guarantee. But she was intrigued by a second possibility: a local charity store was offering a used machine that had been donated (exactly the same model as in the store) for $500. Carlie talked to a computer repair specialist, who said the principal problem with this model of PC was the hard drive, which was prone to failure: he estimated that half of the PCs of this model and age would require a new drive. He offered to test the computer and check the condition of the drive for $60. If the drive was no good, a new drive could be fitted for $300 and would be guaranteed for one year. He added a qualification that his testing was not perfect: about 25% of drives that passed his testing failed soon afterwards requiring a new drive ($300) plus a service charge of $100 for diagnosing the problem.

What should Carlie do

Develop two simulation models of tossing two six-sided dice (numbered 1 through 6 on the six faces).Model 1: Simulate rolling a single die twice and add the total. Model 2: Simulate a combined roll of two dice, giving a number from 2 through 12 with appropriate probabilities.

Read this article and answer questions at the bottom.

The Rise of the Jumbo Student Loan

Most students with loan balances exceeding $50,000 in 2010 had failed to pay down any debtfour years late

During the housing boom of the 2000s, jumbo mortgages with very large balances became a flashpoint for a brewing crisis. Now, researchers are zeroing in on a related crack but in the student debt market: very large student loans with balances exceeding $50,000. A study released Friday by the Brookings Institution finds that most borrowers who left school owing at least $50,000 in student loans in 2010 had failed to pay down any of their debt four years later. Instead, their balances had on average risen by 5% as interest accrued on their debt. As of 2014 there were about 5 million borrowers with such large loan balances, out of 40 million Americans total with student debt. Large-balance borrowers represented 17% of student borrowers leaving college or grad school in 2014, up from 2% of all borrowers in 1990 after adjusting for inflation. Large-balance borrowers now owe 58% of the nation’s $1.4 trillion in outstanding student debt. “This is comparable to mortgage lending, where a subset of high-income borrowers hold the majority of outstanding balances,” write Adam Looney of Brookings and Constantine Yannelis of New York University. “A relatively small share of borrowers accounts for the majority of outstanding student-loan dollars, so the outcomes of this small group of individuals has outsized implications for the loan system and for taxpayers,” the authors say. The problem is particularly acute among borrowers from graduate schools, who don’t face the kinds of federal loan limits faced by undergraduate students. Half of today’s big balance borrowers attended graduate school. The other half went to college only or are parents who helped pay for their children’s education. Grad school borrowers tend to be among the best at paying off student debt because they typically earn more than those with lesser degrees. But the rising balances unearthed in the latest study suggest that pattern might be changing. Overall across the U.S., one-third of borrowers who left grad school in 2009 hadn’t paid down any of their debt after five years, compared to just over half of undergraduate students who hadn’t, federal data show. Mr. Yannelis and Mr. Looney, a former Treasury Department official under President Barack Obama, built the research out of exclusive access to federal student-loan and tax data. The findings on graduate schools are particularly noteworthy because the government offers little information on the loan performance of grad students, who account for about 14% of students at universities but nearly 40% of the $1.4 trillion in outstanding student debt. The data set accompanying the new study breaks down performance for students at 934 schools with 100 or more graduate borrowers whose loans first came due in 2009. At Nova Southeastern University , a large private nonprofit school in South Florida, just over half of the 10,319 graduate borrowers who departed in 2009 had reduced their balances by just a dollar or more five years later, the data show. Many sought or received advanced degrees in health fields. They collectively borrowed $412 million for grad school, or an average $40,000, excluding any debt from other schools, the study showed. George Hanbury, Nova Southeastern’s president, said many of the school’s former grad students went into health fields, where salaries often start low and then rise quickly later on. “They all have the capability to see higher incomes the longer they stay in their career, which means they have the greater capability to increase their rate of payback than they do in the earlier stage,” Mr. Hanbury said. He said the school’s former students earn more, on average, than workers with bachelor’s degrees. At Arizona State, a large public university in Tempe, 51% of the 4,000 grad students who left in 2009 had reduced their initial balances by 2014. Arizona State, through a spokesman, declined to comment. At Walden University, a large collection of graduate programs run by Wall Street giant Laureate Education Inc., 53% of 9,530 graduate borrowers paid down their balances by at least a dollar or more over five years. Many were enrolled in programs involving social services. Walden, in a statement emailed by a spokeswoman, said many former graduate students are in fields that often pay modestly at first but serve a social good. “This is consistent with our social mission where we are educating in professions like teaching, social work, and counseling, for example, and those professionals may not earn significant salaries right after graduation, but who are making a significant societal impact,” the statement said. Most borrowers from those schools aren’t in default. Instead, a big share of them are in debtrelief plans that lower monthly payments, known as income-driven repayment, or they’ve won permission from the government to postpone payments due to a range of circumstances, including unemployment or further study.

Questions

CASE-PART A

Shrieves Casting Company is considering adding a new product line to its product mix, and the capital budgeting analysis is being conducted by Sidney Johnson, a recent business school graduate. The production line would be set up in unused space in Shrieves’s main plant. The machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required to acquire the machinery from the supplier, and it would cost an additional $30,000 to install the equipment. The machinery has an economic life of 4 years and would be in Class 8 with a CCA rate of 20%. The machinery is expected to have a salvage value of $25,000 after 4 years of use.

   The new line would generate incremental sales of 1,250 units per year for 4 years at an incremental cost of $100 per unit, excluding depreciation. Each unit can be sold for $200. Furthermore, to handle the new line, the firm’s net operating working capital would be $80,000. The working capital would be sold for $80,000 at the end of its life. The firm’s tax rate is 30%, and its overall weighted average cost of capital is 10%.

CASE-PART B

The company would like to rerun the original information if sales only reaches 900 units per year.

REQUIRED:

DETERMINE WHETHER THE COMPANY GO AHEAD WITH THIS PROJECT OF ADDING A NEW PRODUCT LINE FOR PART A & B.

(I HAVE ATTACHED A SPREADSHEET FOR YOU TO LOOK AT WITH TWO SIMILAR PROBLEMS. IT SHOULD BE EASY TO WORK WITH SINCE MOST OF THE SPREAD SHEET HAS ALREADY BEEN CROSS REFERENCED FOR YOU. YOU ARE ALLOWED TO USE THE SPREADSHEET SOLUTION PROVIDED TO ANSWER THE CASE QUESTION PROVIDED ABOVE.)

Rewrite the sentences below. Follow the examples to make each of the sentences specific. You can make up these facts for the purpose of this exercise, just make them specific made-up facts.

EXAMPLE: “Either as an addition to a home or as an integral part of a new home, sunspaces have gained considerable popularity locally.” (This might be OK as an introductory sentence, but it wouldn’t fly as a technical fact.)

Choice 1. Numbers. “Sunspaces are included in 13 out of 45 new home plans used by the top three construction companies in Salem, up from 2 out of 42 five years ago” (Salem Homebuilders Association, 1999).

Choice 2. Precise Words. “Architects from five Salem firms report that residential home buyers are beginning to ask for a sunspace, which is an enclosed room of a home with windows covering three walls and sometimes a portion of the ceiling.”

1. There are good and bad results of growth.

2. Farmers are being squeezed more than ever between falling crop prices and rising costs for machinery, labor, and other services.

3. The landslide which made U.S. 101 impassable was large enough for the mass of an elephant herd.

4. For the growing soy industry, the school lunch program offers a vast new market and a way to introduce families to the expanding array of new, better-tasting products that have been developed in recent years.

5. This project will enable thousands of businesses, farms, and ranches to continue to compete in the world marketplace.

6. The federal government has grossly violated its duty to diligently maintain a trust fund system for American Indians.