Assume today is the beginning of year 2011, i.e., January 1, 2011. Company ABC is a hi-tech start-up company that had total after tax earnings of $ 2 million in 2010. Of these, $500,000 were paid out as a dividend to shareholders on December 31, 2010, and the remaining dividends are invested to finance future growth. Company ABC has a total number of 1,000,000 shares outstanding so that the dividend per share is $0.5. ABC’s earnings will grow at a rate of 50% per year in year 2011, 2012 and 2013. After that, the company will enter a more mature growth phase and grow at a constant rate of 8% per year forever. The cost of equity (the discount rate for dividends) of this firm is 15%. Company ABC will keep the payout ratio (payout ratio = dividend/ total after tax earnings) unchanged in year 2011 and 2012. After that, it will only retain 40% of after tax earnings for its future growth.

a)Value Company ABC’s stock price at the beginning of year 2011.

In 2010 you bought 12 initial public offerings (IPOs) of common equity of which there were 22 in total. You held each of these for approximately one month and then sold them. The 22 IPOs were all for oil- and gas-exploration companies. You submitted a purchase order for approximately $1000 of equity for each one. With 10 of these, no shares were allocated to you. With five of the 12 offerings that were purchased, fewer than the requested number of shares were allocated.

The year 2010 was very good for oil- and gas-exploration companies. For the 22 IPOs the shares were selling on average for 80 percent above the offering price within a month. Yet, you looked at your performance record and found the $8,400 invested in 12 companies had grown to only $10,100, a return of only about 20 percent. (Commissions were negligible). Did you have bad luck or should you have expected to do worse than the average IPO investor? Explain.

Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box).

Balance Sheet December 31, 2010 Cash and marketable securities $102,000 Accounts payable $287,000 Accounts receivable $299,000 Notes payable $61,200 Inventories $628,000 Accrued expenses $51,900 Prepaid expenses $10,300 Total current liabilities $400,100 Total current assets $1,039,300 Long-term debt $415,000 Gross fixed assets $1,502,000 Par value and paid-in-capital $376,000 Less: accumulated depreciation $312,000 Retained Earnings $1,038,200 Net fixed assets $1,190,000 Common Equity 1,414,200 Total assets $2,229,300 Total liabilities and owner’s equity $2,229,300 Income statement, Year of 2010 Net sales (all credit) $6,387,700.00 Less: Cost of goods sold $4,726,898.00 Selling and administrative expenses $345,000.00 Depreciation expense $148,000.00 EBIT $1,167,802.00 Interest expense $50,600.00 Earnings before taxes $1,117,202.00 Income taxes $446,880.80 Net income $670,321.20

Question #1

A) The government of Canada has collected data on the prevalence of 5 chronic diseases over time. The data of the 5 diseases was collected in percent prevalence of Canadians over age 20, over the years 2008, 2010, 2012, 2014. A psychologist is interested in knowing if prevalence rates of the diseases change over time. To examine this, they use a one-way repeated measures ANOVA. Sphericity is assumed.

N=5, K=4

B) Calculate eta squared (effect size) for the result in part A. (Act like f is significant even if it’s not)

C) Whether your omnibus test is significant or not significant, perform 2 different appropriate pos-hoc tests. (Act like f is significant even if it’s not)

Given below is the history of a sale on credit by SpongeBob Co. to Star Inc.

(Note: SpongeBob Co. uses the perpetual inventory system and the gross method to account for merchandise sales.)

i. June 25, 2005: SpongeBob Co. sold merchandise to Star Inc. for $9,000, terms 2/10, n/30. The inventory cost SpongeBob Co. $8000.

ii. December 31, 2007: After numerous attempts to collect, SpongeBob Co. wrote off Star Inc.'s account off as uncollectible. SpongeBob Co. uses an allowance account.

iii. June 30, 2010: Star Inc. contacted SpongeBob Co. with the intention to pay the outstanding amount, so SpongeBob Co. added Star Inc.'s account back into the system.

iv. July 5, 2010: Star Inc. paid the debt in full, plus $1,800 in interest.

Instructions: Record the 4 journal entries for SpongeBob Co at the time that they happen. Please also add the dates to the entries.

1. There is a golf tournament in the US that started in 1895. That first year the winner received $150. In 2010, the winner received $1,350,000.
   1. What was the percentage increase per year, from 1895 to 2010, over that period of 115 years?

2. If the winner’s prize continues to increase at the same rate, what will it be in the year 2040, or 30 years from now?

2. First Simple Bank pays 6% simple interest on its account balances. Second Compound Bank pays 6% interest compounded annually. If you made a $57,000 deposit in each bank, how much more money would you earn from your Second Compound Bank account at the end of 10 years?

3. You want to buy a Ferrari that only costs $195,000. You’ve already saved $45,000 and plan to invest it today, in an account that pays 5.3% annual interest. If you don’t touch this money, nor add any additional funds into the account, how long will it be before you can buy your Ferrari?

The table below shows the life expectancy for an individual born in the United States in certain years.

1. Find the estimated life expectancy for an individual born in 1973

2. Use the two points in part (e) to plot the least squares line on your graph from part (b).

3. Are there any outliers in the data?Yes, 1930 and 2010 are outliers.Yes, 1930 and 1950 are outliers.     Yes, 1950 is an outlier.No, there are no outliers

4. Using the least squares line, find the estimated life expectancy for an individual born in 1870. (Round your answer to one decimal place.)
Does the least squares line give an accurate estimate for that year? Explain why or why not. Yes, because the estimate is over 50 years.No, because 1870 is outside the domain of the least squares line.    

Berkshire Hathaway's 13-F filing for the third quarter of 2010 reported that Warren Buffett had reduced his stake in Nike, Inc. by $224 million, bringing his holding to 7.62 percent of the 480 million outstanding shares. Nike reported a core return on net operating assets (core RNOA) of 32.7 percent in its annual report for the year ended May, 2010. A summary of it balance sheet at fiscal year end follows:

Net operating assets $5,318 million

Net financial assets 4,436

Common equity $9,754 million

In mid-July, at the time that the annual report was published, Nike's shares traded at $68 each. By the end of September, the price had risen to $81.

Calculate the expected return form buying at the market price in mid-July with a forecast that Nike can grow residual operating income at 4 % per year. Now make the same calculation for the Setember price. Do you see why Buffett may have sold?

Please paraphrase or rewrite me this text.
please do not use paraphrasing or rewriting tool

The effect of internal curing in the compressive strength depends on the specific
mixture proportions, curing conditions and testing age. (Bentz et al., 2011 pp. 31)

Use of the LWA will decrease the compressive strength of the concrete in the beginning
of its age. That is expected because the specific gravity of the LWA is lower, therefore
leading to lower strength compared to concrete with normal weight aggregate. Previous
studies have shown though, that the long-term compressive strength will increase when
internal curing is used, so it is likely that concrete with LWA has a higher long-term
compressive strength than concrete with normal weight aggregate. (Kerby, 2010 pp. 10)

Although the internal curing might improve the strength of the paste by providing
additional water to the hydration process, the weakening effect by the weaker and softer
aggregate can affect more to the overall behaviour, reducing the strength. (Schlitter et
al., 2010 pp. 139)