If a cost is a common cost of the segments on a segmented income statement, the cost should:

.

Anderson Corporation has two major business segments-North and South. In July, the North business segment had sales revenues of $220,000, variable expenses of $125,000, and traceable fixed expenses of $29,000. During the same month, the South business segment had sales revenues of $890,000, variable expenses of $472,000, and traceable fixed expenses of $169,000. The common fixed expenses totaled $246,000 and were allocated as follows: $123,000 to the North business segment and $123,000 to the South business segment.

The contribution margin of the South business segment is:

a. The initial cost of the extraction equipment is $2,500,000. In addition to this cost, the equipment will require a large concrete foundation at a cost of $300,000. The vendor has quoted an additional cost of $200,000 to install and test the equipment. These costs are all considered part of the cost of acquiring the equipment.

b.The useful life of the equipment is 10 years with no salvage value at the end of this period. However, for tax purposes, the equipment will be classified as 7year property and use the following MACRS depreciation allowances (half year convention) for computing tax depreciation deductions:

Percentage Of Original Year Cost

1 . . . . . . . . . . 14.3%

2 . . . . . 24.5

3 . . . . . . . . . . 17.5

4 . . . . . . . . . . 12.5

5 . . . . . . . . . . 8.9

6 . . . . . . . . . .8.9

7 . . . . . . . . . . 8.9

8 . . . . . . . . . .4.5

100.0%

c. Using the new equipment, 250 pounds of platinum can be extracted annually for the next 10 years from the previously inaccessible area of the mine.

d.The cost to extract and separate platinum from the ore is $4,000 per pound of platinum. After separation, the platinum must undergo further processing and testing that costs $1900 per pound of platinum. These are all out of pocket, variable costs.

e.Two skilled technicians will be hired to operate the new equipment. The total salary and fringe benefit expense for these two employees will be $200,000 annually over the 10 years.

f.Periodic maintenance on the equipment is expected to cost $175,000 per year.

g.The project requires an investment in additional working capital of $300,000. This working capital would be released for use elsewhere at the conclusion of the project in 10 years.

h.Environmental and safety regulations require that the mine be extensively restored and toxic substances be safely disposed at the conclusion of the project. The cost of environmental remediation work is expected to be $4,500,000

i.The current market price of platinum is 12,800 per pound

j.The tax rate is 21% and it uses an 18% after tax discount rate (minimum required rate of return)

Question:

2.

A couple was at a ski lodge and went to happy hour from 5pm to 9pm. The bar stops serving at 10pm. They leave the ski resort on a snowy night and are driving back to the hotel which is about an hour’s drive from the resort. At 12 am a passerby sees a car off the road in the trees. He finds the male unconscious and injured behind the wheel. The female is deceased. The passerby calls 911 and it takes an hour for them to come. The male arrives at the hospital at 2 am and his blood is drawn at 2:30 am. The male is found to have a BAC of 100mg/dl in plasma.

Male weighs 70 kg

Calculate if he is going to jail or not and why?

How many drinks did he consume?

Minimum # of drinks to achieve BAC?

Clue: the key thing to realize is the happy hour ended at 9 pm and the bar closed at 10 pm. therefore, what assumptions can be made about whether he was absorptive or post-absorptive?

1) A 7% Commonwealth government bond has three years to maturity. Given that the bond pays coupons semi-annually (i.e. twice a year) and a coupon payment has just been made, what is the present value (price) of the bond if the market interest rate is 9% and the face value of the bond is $100,000?

2) You have observed the returns for an investment in Telstra shares for the last five years. This shows returns of 23%, -17%, 8%, 22% and 3%. Calculate the average return, variance, and standard deviation of these shares.

3) You own a portfolio that is invested as follows: $11,600 in shares of Rendezvous hotel, $7,800 in shares of Crown Plaza, $14,900 in shares of Carlton & United Breweries, and $3,200 in shares of Domino’s Pizza . What is the portfolio weight of shares of Carlton & United Breweries?

4) One year ago, you bought a share for $36.48. You received a dividend of $1.62 per share last month and sold the share today for $40.18. What is the capital gains yield on this investment?

Each statement describes one of the major market models or industry structures (pure competition, pure monopoly, oligopoly, or monopolistic competition) . Provide the market model or industry structure each description best fits

1. Individual firm in this market model faces a perfectly elastic demand curve.

2. Industry model where excess capacity is most likely to be found.

3. Industry structure in which one firm produces a product for which there are no good substitutes.

4. The Vegas hotel casino industry would be found in the industry or market model.

5. A pharmaceutical company would be classified in this group:

6. Market structure in which a local pizza or sandwich shop would be classified.

7. The beer industry would be classified in this industry structure.

8. The airline industry is found in this industry or market structure.

9. Industry structure in which both productive and allocative efficiency is attained in the the long run.

10.  Market structure marked by mutual interdependence among firms.

1.Jared and Laura have renter’s insurance with a $500 deductible and a $20,000 coverage limit. Unfortunately, a fire destroys their apartment, requiring them to stay in a hotel for $100 a night for 10 nights. In addition, they lost $7,000 worth of property. How much will their renter’s insurance pay?

A.$7,500.

B.$7,000.

C.$6,500.

D.$8,000.

2. Jason, age 49, recently used $10,000 from his IRA to purchase his first home. Which of the following applies?

A.Jason will have to pay taxes and a penalty for taking a distribution from his account before age 59½.

B.Jason will not have to pay taxes nor a penalty since he is withdrawing money from his own IRA.

C.Jason will incur a 10% penalty for taking a distribution before age 50½, but he will not have to pay income taxes since he is a first-time homebuyer.

D.Jason will have to pay taxes on his distribution, but he will not incur an additional 10% penalty since he is a first-time homebuyer.

1. Discuss the importance of marketing activities for each of the segments listed in the previous question.
   1. Discuss and explain how important you think advertising is for each of the market segments. Provide specific examples.
   2. Discuss and explain how important you think personal sales is for each of the market segments. Provide specific examples.
   3. Discuss and explain how important you think sales promotions are for each of the market segments. Provide specific examples.
   4. Discuss and explain how important you think public relations are for each of the market segments. Provide specific examples.
2. What is the difference between Capital and Operating Budget?
3. According to the simulation manual, how can you increase the quality rating for your hotel in the simulation?
4. Explain what diminishing marginal return is. Discuss if you can use the diminishing marginal return concept when you make your expenditure decisions. Give a specific example.
5. What is a positioning map? Explain and discuss how you can use positioning maps to make better managerial decisions.

Provide an evaluation of two proposed projects, both with 5-year expected lives and identical initial outlays of $110,000. Both of thj4ese projects involve additions to Liburdi’s high highly successful hotel product line, and as a result, the required rate of return on both projects has been established at 12 percent. The expected free cash flows from each project are as follows:

In evaluating these projects, please respond to the following questions:

1. Why is capital-budgeting process so important?
2. Why is it difficult to find exceptionally profitable projects?
3. What is the payback period on each project? If Liburdi imposes a 3-year maximum acceptable payback period, which of these projects should be accepted?

Using Excel

Data in Travel file shows the average number of rooms in a variety of U.S cities and the average room rate and the average amount spent on entertainment. A company that run events for hotel residents wants to predict the amount spent on entertainment based on room rate and number of rooms.

Run the regression analysis. Are the coefficients statistically significant? Do we need to drop one of these variable? Which variable? Interpret the slope of the estimated regression equation?

Develop the least squares estimated regression equation. The average room rate in Chicago is $128, predict the entertainment expense per day for Chicago.