MBA 5009 Managerial Environment Business Organization Question What is the advantages and disadvantages of the following 1. Sole propretorship? 2. General partnerships? 3. Corporations (C, non-profits and S)? and Franchies? If you had to pick one for your business which one would most pick? why?

A prospective MBA student earns $50,000 per year in her current job and expects that amount to increase by 12% per year. She is considering leaving her job to attend business school for two years at a cost of $45,000 per year. She has been told that her starting salary after business school is likely to be $85,000 and that amount will increase by 15% per year. Consider a time horizon of 10 years, use a discount rate of 11%, and ignore all considerations not explicitly mentioned here. Assume all cash flows occur at the start of each year (i.e., immediate, one year from now, two years from now,..., nine years from now). Also assume that the choice can be implemented immediately so that for the MBA alternative the current year is the first year of business school. What is the net present value of the more attractive choice?

1. X-bar is an unbiased estimator of µ because

a. standard error of X-bar equals sigma/ square root of n

b. expected value of X-bar equals µ

c. shape of distribution of X-bar is normal.

d. Expected value of X-bar is greater than 1.

2. Suppose professor finds that for 16 randomly selected students the time needed to complete an assignment had a sample mean of 65 minutes and a sample standard deviation of 40 minutes. The 98% confidence interval estimate for the population mean is:

3. The starting salaries of individuals with an MBA degree are normally distributed with a mean of $90,000 and a standard deviation of $20,000. Suppose we randomly select 16 of these individuals with an MBA degree. What is the probability that the average starting salary for these individuals is at least $85,800? 0.7995 0.9131 0.2005 -0.2611

4. The probability P(0 <= Z <= 1.63) is:

a. 0.4265

b. 0.9484

c. 0.5071

d. 0.4484

1) A prospective MBA student earns $50,000 per year in her current job and expects that amount to increase by 9% per year. She is considering leaving her job to attend business school for two years at a cost of $50,000 per year. She has been told that her starting salary after business school is likely to be $105,000 and that amount will increase by 10% per year. Consider a time horizon of 10 years, use a discount rate of 10%, and ignore all considerations not explicitly mentioned here. Assume all cash flows occur at the start of each year (i.e., immediate, one year from now, two years from now,..., nine years from now). Also assume that the choice can be implemented immediately so that for the MBA alternative the current year is the first year of business school. What is the net present value of the more attractive choice?

1a.An eight-year corporate bond with a face value of $1000 has a 7 percent coupon rate. What should be the bond's price if the required return is 5 percent and the bond pays interest semiannually?

A. $1,062.81 B. $1,062.10 C. $1,053.45 D. $1,052.99 E. $1,130.55

1b. Upon graduating from college this year, you expect to earn $50,000 per year. If you get your MBA, in one year you can expect to start at $70,000 per year. Over the year, inflation is expected to be 5 percent. In today's dollars, how much additional (less) money will you make from getting your MBA (to the nearest dollar) in your first year?

A. -$2,462 B. $8,333 C. $8,750. D. $16,667 E. $20,000

1c. The duration of a 270-day T-Bill is (in years)

A. 0.493.

B. 0.246.

C. 1.

D. 0.7397

E. indeterminate.

Anna has just completed her undergraduate degree and is already planning to enter an MBA program one year from today. The MBA tuition will be $7,000 per year for 2 years, paid at the beginning of each year. In addition, Anna would like to retire 20 years from today and spend $50,000 every year for 10 years (years 20-29, withdrawn at the beginning of each year). To fund her expenditures, Anna will save money at the end of year 0 and at the end of years 3-19. At the end of year 29, she wants to have nothing in her bank account. Do not enter a comma or dollar sign.

Assuming that the interest rate is 5%, calculate the constant annual dollar amount that she must save at the end of each of these years to cover all of her expenditures (tuition and retirement).

If the retirement spending increases to $60,000, what is the constant annual dollar amount that she must save?

A prospective MBA student earns $60,000 per year in her current job and expects that amount to increase by 11% per year. She is considering leaving her job to attend business school for two years at a cost of $45,000 per year. She has been told that her starting salary after business school is likely to be $75,000 and that amount will increase by 18% per year. Consider a time horizon of 10 years, use a discount rate of 12%, and ignore all considerations not explicitly mentioned here. Assume all cash flows occur at the start of each year (i.e., immediate, one year from now, two years from now,..., nine years from now). Also assume that the choice can be implemented immediately so that for the MBA alternative the current year is the first year of business school. What is the net present value of the more attractive choice?

John starts his career at 21 years old and expects to retire 44 years later at the age of 65. His first annual salary is $72,000 that will increase at 1.5% per year until he finishes his part-time MBA at 28 years old. With his MBA, John expects salary to increase at 3% per year until retirement. At the end of each year, he deposits 10% of his annual salary into a retirement saving plan that pays 6% interest per year compounded monthly. On the first day of his retirement, John converts his whole retirement saving plan into a registered retirement income fund (RRIF) that earns 8% interest per year compounded quarterly. The RRIF will pay John $Y per quarter, the first payment being paid on the day he buys the RRIF, for 25 years. Find Y.  (Show your work without using MS Excel)

John starts his career at 21 years old and expects to retire 44 years later at the age of 65. His first annual salary is $72,000 that will increase at 1.5% per year until he finishes his part-time MBA at 28 years old. With his MBA, John expects salary to increase at 3% per year until retirement. At the end of each year, he deposits 10% of his annual salary into a retirement saving plan that pays 6% interest per year compounded monthly. On the first day of his retirement, John converts his whole retirement saving plan into a registered retirement income fund (RRIF) that earns 8% interest per year compounded quarterly. The RRIF will pay John $Y per quarter, the first payment being paid on the day he buys the RRIF, for 25 years. Find Y. (Show your work without using MS Excel)

Star & Anderson SAOG. acquired all of the common stock of Wilkinson SAOG. on January 1, 2018.  As of that date, Wilkinson had the following trial balance:

During 2018, Wilkinson SAOG reported net income of OMR 48,000 while paying dividends of OMR 6,000.   

During 2019, Wilkinson SAOG reported net income of OMR 66,000 while paying dividends of OMR 18,000.
Assume that Star & Anderson SAOG.  acquired the common stock of Wilkinson SAOG. for OMR 294,000 in cash. As of January 1, 2018, Wilkinson SAOG land had a fair value of OMR 51,000, its buildings were valued at OMR 94,000, and its equipment was appraised at OMR 108,000. Any excess of consideration transferred over fair value of assets and liabilities acquired is due to an unamortized patent to be amortized over 5 years.

Star & Anderson SAOG decided to use the equity methodfor this investment.

Required:   Prepare consolidation worksheet entriesfor December 31, 2018.