Emerald City Wear, Inc. (ECW, Inc.)^¨

Two alums of the UW Foster School of Business founded Emerald City Wear (ECW), a clothing manufacturer located in Seattle. Their strategy is to produce lightweight, warm, water-resistant garments suited to the Pacific Northwest’s mild and damp climate.

One of their garments is a reversible zip-front vest. While ECW can make up to 10,000 of these in a month with its current facilities, its normal production and sales activity level has regularly been 8,000 vests a month. Last November, the alums received an inquiry from the UW Bothell for 1,000 vests of various sizes with the UW Bothell School logo (shown above) embroidered on the front, to be distributed to faculty and donors. This was expected to be a one-time order and ECW would need to manufacture the vests in December to be ready by December 18 for distribution at the School’s holiday event.

According to ECW’s accounting system, the cost of producing and selling a single regular vest (without the special logo) at current activity level was as follows:

* determined at normal capacity and allocated according to direct labor hours

** allocated based on ‘ability to bear’.

The normal selling price for a regular vest is $30.

ECW does not have the necessary equipment to do the embroidering of the UW Bothell School logo, so that would need to be outsourced to another company for a flat fee of $1,000.

The owners of ECW are conscious of the fact that the UW Bothell has had other bids, and because they are loyal alums, they would like to keep their bid to $18 per vest. This order is not expected to affect ECW’s regular sales.

Questions: (treat each question below independently)

1.   If the order is accepted at a bid price of $18 per vest, by how much will ECW’s December profits change? That is, will profits go up or down as a result of the order, and by how much?

2. Now assume that ECW already has orders from regular customers for 10,000 vests for December. If it supplies the vests to UW Bothell at $18 per vest, what will be the effect on its December profits?

3. All the data for regular vests remains unchanged. Assume that the company now has 500 of them left over from last year. However, they are chartreuse (a bright yellow-green) and have not sold at regular prices. If these vests must be sold through regular channels but at reduced prices, what cost is relevant for establishing the minimum selling price for these vests? Why?

A random sample of

862862

births included

426426

boys. Use a

0.010.01

significance level to test the claim that

50.850.8​%

of newborn babies are boys. Do the results support the belief that

50.850.8​%

of newborn babies are​ boys?

Identify the null and alternative hypotheses for this test. Choose the correct answer below.

A.

Upper H 0H0​:

pequals=0.5080.508

Upper H 1H1​:

pless than<0.5080.508

B.

Upper H 0H0​:

pequals=0.5080.508

Upper H 1H1​:

pgreater than>0.5080.508

C.

Upper H 0H0​:

pequals=0.5080.508

Upper H 1H1​:

pnot equals≠0.5080.508

D.

Upper H 0H0​:

pnot equals≠0.5080.508

Upper H 1H1​:

pequals=0.5080.508

Identify the test statistic for this hypothesis test.

The test statistic for this hypothesis test is

nothing.

​(Round to two decimal places as​ needed.)

Identify the​ P-value for this hypothesis test.

The​ P-value for this hypothesis test is

nothing.

​(Round to three decimal places as​ needed.)

Identify the conclusion for this hypothesis test.

A.

Fail to rejectFail to reject

Upper H 0H0.

There

isis

sufficient evidence to warrant rejection of the claim that

50.850.8​%

of newborn babies are boys.

B.

Fail to rejectFail to reject

Upper H 0H0.

There

is notis not

sufficient evidence to warrant rejection of the claim that

50.850.8​%

of newborn babies are boys.

C.

RejectReject

Upper H 0H0.

There

is notis not

sufficient evidence to warrant rejection of the claim that

50.850.8​%

of newborn babies are boys.

D.

RejectReject

Upper H 0H0.

There

isis

sufficient evidence to warrant rejection of the claim that

50.850.8​%

of newborn babies are boys.

Do the results support the belief that

50.850.8​%

of newborn babies are​ boys?

A.The results do not support the belief that

50.850.8​%

of newborn babies are boys because there was sufficient evidence to show that the belief is untrue.

B.The results support the belief that

50.850.8​%

of newborn babies are boys because there was sufficient evidence to show that the belief is true.

C.The results do not support the belief that

50.850.8​%

of newborn babies are​ boys; the results merely show that there is not strong evidence against the rate of

50.850.8​%.

D.The results support the belief that

50.850.8​%

of newborn babies are boys because there was no evidence to show that the belief is untrue

The mayor of a town has proposed a plan for the construction of a new community. A political study took a sample of 900 voters in the town and found that 75% of the residents favored construction. Using the data, a political strategist wants to test the claim that the percentage of residents who favor construction is more than 72%. Testing at the 0.05 level, is there enough evidence to support the strategist's claim?

Answer the following questions regarding the effects of indirect intervention.
Suppose that the government of Chile reduces one if its key interest rates. The values of several other Latin American currencies are expected to change substantially against the Chilean peso in response to the news.
a. Why could other Latin American currencies be affected by a cut in Chile's interest rates? (10 points)
b. How would the central banks of other Latin American countries likely adjust their interest rates? How would the currencies of these countries respond to the central bank intervention?

ABC Corporation is considering an acquisition of XYZ. XYZ has a capital structure of 40% debt and 60% equity, with a current book value of $20 million in assets. XYZ’s pre-merger beta is 1.46 and is not likely to be altered as a result of the proposed merger. ABC’s pre-merger beta is 1.12, and both it and XYZ face a 35% tax rate. ABC’s capital structure is 50% debt and 50% equity, and it has $24 million in total assets. The net cash flows from XYZ available to ABC’s stockholders are estimated at $5.0 million for each of the next four years and a terminal value of $19.0 million in Year 4.

Additionally, new debt issued by the combined firm would yield 10% after-tax, and the cost of equity is estimated at 14.59%. Currently, the risk-free rate is 5.0% and the expected market risk return is 15.50%.

1. What is the merged firm’s WACC?

2. What is the merged firm’s new beta?

3. What is the appropriate discount rate ABC should use to discount the equity cash flows from XYZ?
4. What is the present value (to the nearest thousand) of the XYZ cash inflows to ABC?
5. If the acquisition price of XYZ is 145% of XYZ’s current book value of assets, should ABC proceed with the acquisition?

Question 1:

Part a) A game consists of drawing 1 card from a standard deck of 52 cards. If you draw an Ace you win $50. If you draw a Jack, Queen, or King you win $20. If you draw a 10, 9 or 8 you win $15. If you draw anything lower than an 8, you don’t win anything. If it costs $10 to play, what is your expected value?

Part b) It costs $180/yr to buy insurance for your bike. The probability that your bike will be stolen in your neighborhood 13% each year. If your bike is stolen, your insurance company will pay $1,000 to replace your bike. Based on expected value, should you buy insurance? Show work and support your answer.

Part c) You are a school nurse and you order band-aides from a local company. The band-aides are packaged in boxes of 50. Quality control studies have shown that 3% of the band-aides are defective. As a nurse, what is the maximum number of band-aides you should plan on throwing out of each box? Round your answer to 2 decimal places.

Part d) A recent study found that 76% of public school teachers are female. Eight teachers are randomly selected. Find the probability that at least 7 of them are women. Round your answer to 4 decimal places.

Question

Part a) A recent survey found that 55% of young adults claim it’s easy to text while driving. You take a random sample of 5 young adults and ask if they feel it is easy to text and drive. Set up the table for the binomial distribution. Round your answers to 4 decimal places.

Part b) A family is planning on having 5 children. A baby food company told the family that they would award them $10,000 if they have exactly 1 boy, exactly 1 girl, all boys or all girls. In all other cases the baby food company would award them $2,000. What is the expected value for the family?

Please answer all parts to the question, I will give thumbs up to anyone who answers them right away.

Please write here, not on the paper, Thank you!

Your company is considering opening a new factory in Latin America. As such the strategic management division is in the process of evaluating the specific locations for such an operation.

The pool of candidate countries has been narrowed to (1) Columbia (2) Panama and (3) Paraguay.

By using Country Insights, a resource provided by globalEdge, prepare a short report comparing the risks of conducting business in these countries. Based on this information, in which country would you open the new factory?

2 girls have 25 outfits each. Each girl has one and only one outfit that matches the other girls. What is the probability that the girls wear matching outfits twice in 21 days?

In Country​ A, the population mean height for​ 3-year-old boys is 37 inches. Suppose a random sample of 15​ 3-year-old boys from Country B showed a sample mean of 36.5 inches with a standard deviation of 4 inches. The boys were independently sampled. Assume that heights are Normally distributed in the population. Complete parts a through c below. a. Determine whether the population mean for Country B boys is significantly different from the Country A mean. Use a significance level of 0.05. Find test statistic and p-value b. Now suppose the sample consists of 30 boys instead of 15 and repeat the test. Find the test statistic and p- value