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We are examining a new project. We expect to sell 6,000 units per year at $74 net cash flow apiece for the next 10 years. In other words, the annual cash flow is projected to be $74 × 6,000 = $444,000. The relevant discount rate is 18 percent, and the initial investment required is $1,710,000. After the first year, the project can be dismantled and sold for $1,540,000. Suppose you think it is likely that expected sales will be revised upward to 9,000 units if the first year is a success and revised downward to 4,600 units if the first year is not a success. |
| a. |
If success and failure are equally likely, what is the NPV of the project? Consider the possibility of abandonment in answering. (Do not round intermediate calculations and round your answer to 2 decimal places. e.g., 32.16.) |
| b. | What is the value of the option to abandon? (Do not round intermediate calculations and round your answer to 2 decimal places. e.g., 32.16.) |
In: Finance
CASE STUDY: PARKINSON’S DISEASE
Miss Rose is a 74 year old female, who is a retired widow and lives with her son for the past five years. Both enjoy planting seedlings and own a community agriculture store. She does not suffer with hypertension or diabetes and has an active lifestyle. She is also not known to have any psychiatric illnesses. Over the past six months Miss Rose’s son and herself noticed physical changes and decided to visit her General Practitioner. At her visit she mentioned to the doctor that she was having difficulty rising up from a sitting position after grooming her plants or turning from one table to another when she has customers. Documentation on her clinic file noted that she previously complained of difficulty walking and falling when coming out of bed. She was sent for an X-ray but there were no clinical findings. The physician asked her to describe what happened when she fell. Miss Rose verbalized that when she got up from bed and starting walking she started moving forward and backward then stooped forward with small fast steps and then she fell. Her son mentioned to the doctor that he has noticed that when she is pruning her plants she has abnormal rhythmic movement of the upper and lower limbs. She occasionally has a slight limp and her handwriting has become smaller over the past months. This has stopped her from doing her daily yoga exercises and she has been very disturbed about it. Miss Rose then further explained that the movement started on the distal part of both upper limbs at the same time. She also expressed that during rest she noticed the movement in her limbs and as she started her tasks the movements became more aggravated. Urinary incontinence is also a problem for Miss Rose and she is having difficulty in her swift movements to her bathroom. The patient was later diagnosed with Parkinson’s disease.
After the assessment and interview of Miss Rose the Physician documented the following:
Physical Assessment Vital Signs: BP- 130/74 mmHg Temperature - 36.7 C, Pulse- 78 bpm regular and bounding Respiration- 20 bpm Height- 5ft 7 in Weight- 70 kg Facial expression- Masklike Gait- Shuffling gait with tendency to fall forward and backward CNS Examination Alert and oriented to time, person and place Level of consciousness GCS- 15/15 Sleeping patterns- normal Swallowing gag reflex- normal Cogwheel rigidity present Tremor present Bradykinesia present Dysphonia present Instructions:
a) Briefly discuss the Anatomy and Physiology of this disease.
b) Briefly discuss the pathophysiology of the disease process. .
c) Discuss what home care activities can be implemented to ensure the patient’s health and safety.
d) State the medications used to treat this disease and its therapeutic effects it has on the patient.
In: Nursing
Williams & Sons last year reported sales of $74 million, cost of goods sold (COGS) of $60 and an inventory turnover ratio of 5. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 6 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Round your answer to the nearest dollar.
In: Finance
You are valuing Soda City Inc. It has $139 million of debt, $74 million of cash, and 189 million shares outstanding. You estimate its cost of capital is 9.1%. You forecast that it will generate revenues of $731 million and $769 million over the next two years. Projected operating profit margin is 36%, tax rate is 22%, reinvestment rate is 51%, and terminal exit value multiple at the end of year 2 is 10. What is your estimate of its share price? Round to one decimal place. [Hint: Compute projected FCFF for years 1 and 2 based on info provided, compute terminal value using the exit multiple method, discount it all to find EV, walk the bridge to Equity, divide by number of shares outstanding.]
In: Finance
| 4 | We draw a random sample of size 40 from a population with standard deviation 2.5. |
Show work in excel with formulas |
||||||||||
| a | If the sample mean is 27, what is a 95% confidence interval for the population mean? | |||||||||||
| b | If the sample mean is 27, what is a 99% confidence interval for the population mean? | |||||||||||
| c | If the sample mean is 27, what is a 90% confidence interval for the population mean? | |||||||||||
| d | If the sample mean is 27 and the sample size is 87, what is a 95% confidence interval for the population mean? | |||||||||||
In: Statistics and Probability
You are evaluating the capability of a process. Standard deviation (s) is 5. Customers have said that they will accept units ranging between 35 and 60. The location of the mean is unknown, but your boss wants to know if the process is capable of performing to customer specifications if the mean of the data was centered between specification limits. What would you say?
A: The process isn't capable no matter how you try to center it
B: The process is capable, but not acceptable
C: The process is capable and acceptable
D: I need to know more information before I can give you an answer
In: Math
Scores in the first and fourth (final) rounds for a sample of 20 golfers who competed in golf tournaments are shown in the following table.
| Player | First Round |
Final Round |
|---|---|---|
| Golfer 1 | 70 | 72 |
| Golfer 2 | 71 | 72 |
| Golfer 3 | 70 | 74 |
| Golfer 4 | 72 | 71 |
| Golfer 5 | 70 | 69 |
| Golfer 6 | 67 | 67 |
| Golfer 7 | 71 | 67 |
| Golfer 8 | 68 | 75 |
| Golfer 9 | 67 | 72 |
| Golfer 10 | 70 | 69 |
| Player | First Round |
Final Round |
|---|---|---|
| Golfer 11 | 72 | 72 |
| Golfer 12 | 72 | 70 |
| Golfer 13 | 70 | 73 |
| Golfer 14 | 70 | 76 |
| Golfer 15 | 68 | 70 |
| Golfer 16 | 68 | 66 |
| Golfer 17 | 71 | 70 |
| Golfer 18 | 70 | 68 |
| Golfer 19 | 69 | 68 |
| Golfer 20 | 67 | 71 |
Suppose you would like to determine if the mean score for the first round of a golf tournament event is significantly different than the mean score for the fourth and final round. Does the pressure of playing in the final round cause scores to go up? Or does the increased player concentration cause scores to come down?
a) Calculate the value of the test statistic. (Round your answer to
three decimal places.)
Calculate the p-value. (Round your answer to four decimal places.)
b) What is the point estimate of the difference between the two population means? (Use mean score first round − mean score fourth round.)
In: Statistics and Probability
| Aron | |||||
| 1 | 2 | 3 | 4 | Average | |
|
8/6/2017 |
90 | 138 | 118 | 105 | 112.8 |
| 8/19/2017 | 162 | 101 | 120 | 145 | 132 |
| 9/16/2017 | 101 | 129 | 132 | 111 | 118.3 |
| Average | 117.7 | 122.7 | 123.3 | 120.3 | 121 |
| Mjorgan | |||||
| 1 | 2 | 3 | 4 | Average | |
| 8/6/2017 | 115 | 88 | 94 | 102 | 99.8 |
| 8/19/2017 | 89 | 75 | 77 | 90 | 82.8 |
| 9/16/2017 | 74 | 110 | 117 | 90 | 97.8 |
| Average | 92.7 | 91 | 96 | 94 | 93.4 |
Mjorgan drinks a simple Egils beer while bowling. But Aron drinks the traditional Viking beverage Brennivín ("Black death") which has a particularly high alcohol content. As of his first game, he has not had any Brennivín, but after that he drinks about one per game bowled. Is there a correlation between his score and the number of Brennivín he has drank each night? (You might want to carefully construct a data table showing how many he has had at each point on each night, and his score. Note that three nights are presented here.) How would we interpret this correlation?
4. Could we write an equation to estimate Aron’s bowling score based on his Brennivín consumption? Run the statistical test to create this equation, diagnose it, and then interpret its findings and its accuracy. Is this a particularly good model?
In: Statistics and Probability
Scores in the first and fourth (final) rounds for a sample of 20 golfers who competed in golf tournaments are shown in the following table.
| Player | First Round |
Final Round |
|---|---|---|
| Golfer 1 | 70 | 72 |
| Golfer 2 | 71 | 72 |
| Golfer 3 | 70 | 74 |
| Golfer 4 | 72 | 71 |
| Golfer 5 | 70 | 69 |
| Golfer 6 | 67 | 67 |
| Golfer 7 | 71 | 67 |
| Golfer 8 | 68 | 72 |
| Golfer 9 | 67 | 71 |
| Golfer 10 | 70 | 69 |
| Player | First Round |
Final Round |
|---|---|---|
| Golfer 11 | 72 | 72 |
| Golfer 12 | 72 | 70 |
| Golfer 13 | 70 | 73 |
| Golfer 14 | 70 | 75 |
| Golfer 15 | 68 | 70 |
| Golfer 16 | 68 | 65 |
| Golfer 17 | 71 | 70 |
| Golfer 18 | 70 | 68 |
| Golfer 19 | 69 | 68 |
| Golfer 20 | 67 | 71 |
Suppose you would like to determine if the mean score for the first round of a golf tournament event is significantly different than the mean score for the fourth and final round. Does the pressure of playing in the final round cause scores to go up? Or does the increased player concentration cause scores to come down?
Calculate the value of the test statistic. (Round your answer to three decimal places.)
Calculate the p-value. (Round your answer to four decimal places.)
What is the point estimate of the difference between the two population means? (Use mean score first round − mean score fourth round.)
In: Statistics and Probability
8) A psychological experiment finds that all paranoid schitzophrenics have eye contact
times in the bottom 10 percent. Find the cutoff score for them if the average eye
contact time is 200 seconds and the standard deviation is 35 seconds.
a) 20 b) 39 c) 69.8 d) 155 e) 200
9) If the chance of getting a broken cookie is .05, what is the probability of getting two
or more broken cookies in a bag of 40 cookies? Use correction for continuity.
a) .74 b) .358 c) .64 d) .09 e) .19
10) The mean blood glucose level in adults is 85 with a standard deviation of 25. What is
the probability of finding a three reading average greater than 100?
a) .1493 b) .274 c) .0228 d) .04 e) .360
11) The National Center for Educational Statistics surveyed 5400 college graduates about
the lengths of time required to earn their bachelors degrees. The mean is 5.4 years and
the standard deviation is 1.9 years. Based on this sample, construct a 90% confidence
interval for the mean time required by all college graduates
a) 4.09-4.22 b) 5.36 - 5.44 c) 5.74-5.96 d) 4.37-6.06
12) Given that the average shower time at a hotel is 11.4 minutes with a standard deviation
of 7 minutes, what is the probability that a group of 20 guests will shower on average
between 11.5 and 11.6 minutes?
a) .10 b) .42 c) .1253 d) .20 e) .0253
In: Statistics and Probability