Question 36

In a corporate structure with shareholders, managers, and a board of directors:

Select one:

a. shareholders are agents

b. directors are agents

c. in principle, the board of directors works on behalf of the shareholders

d. managers are principals

e. shareholders are generally both principals and agents

Question 37

A project costs $525 and has cash flows of $110 for the first three years and $75 in each of the project's last five years. What is the payback period of the project?

Select one:

a. The project never pays back

b. 5.00 years

c. 5.60 years

d. 5.33 years

e. 5.67 years

Question 38

Suppose a project costs $440 and produces cash flows of $100 over each of the following seven years. What is the IRR of the project?

Select one or more:

a. There is not enough information; a discount rate is required

b. 18.6%

c. 13.2%

d. 24.3%

e. 10.0%

Question 39

Your company purchased a piece of land five years ago for $150,000 and subsequently added $175,000 in improvements. The current book value of the property is $225,000. There are two options for future use of the land: 1) the land can be sold today for $375,000 on a net after-tax basis; 2) your company can destroy the past improvements and build a factory on the land. In consideration of the factory project, what amount (if any) should the land be valued at?

Select one:

a. The present book value of $225,000.

b. The property should be valued at zero since it is a sunk cost.

c. The sales price of $375,000 less the book value of the improvements.

d. The original $150,000 purchase price of the land itself.

e. The after-tax sales value of $375,000.

Question 40

A new project will cause accounts payable to increase by $70,000, accounts receivable to increase by $70,000 and inventory to increase by $10,000. Which one of the following statements is true?

Select one:

a. Net working capital will decrease.

b. Net working capital will increase.

c. The project will not affect net working capital.

d. The change in accounts payable is a use of cash.

e. The change in inventory is a use of cash.

Haply Inc. contracts with Barksdale LLC to have an engine repaired. After much negotiation, the parties agree that the engine will be repaired and reinstalled at Haply’s facilities in 5 days. Haply plans on losing $40,000 a day for each day the engine is not delivered after the five-day window (this is the cost for a replacement engine).

Haply tells Barksdale’s representatives that if the engine is not repaired on time that bad press will cause Haply to lose a client’s business totaling $3,000,000. Barksdale does not complete the contract until day 7.

It cost Haply $500 to secure the delivery of a replacement engine. The actual rental of the replacement engine cost $40,000 a day. And Haply lost the business of a client totaling $3,000,000. Haply sues Barksdale for incidental, consequential and compensatory damages. The court finds that there is a breach of contract. What are the consequential, incidental, and compensatory damages that Barksdale is liable for in this case? Be sure to define each of those terms.

The requirements below must be met for your paper to be accepted and graded:

Write between 500 – 750 words (approximately 2 – 3 pages) using Microsoft Word.

Attempt APA style, see example below.

Use font size 12 and 1” margins.

Include cover page and reference page.

At least 60% of your paper must be original content/writing.

No more than 40% of your content/information may come from references.

Use at least two references from outside the course material, preferably from EBSCOhost. Text book, lectures, and other materials in the course may be used, but are not counted toward the two reference requirement.

A new refrigerator is being designed. Magnets will be used to hold the door closed, and the rubber seal thickness can be selected to adjust the separation between the magnets (and therefore the force). The total length of rubber seal required to go around the door is 6m, and the cost of rubber seal is given equation 2. The pull force when opening the door should be 12N. Determine which of the magnet combinations should be used, and the combined cost of the magnets and seals per refrigerator.

Table 2. Material costs of neodymium magnets

$Cost/m of rubber seal = 30 T^-0.7                    Equation 2

where T = thickness of each seal in mm (half the separation between the magnets)

6) The table below represents data on a variable of interest collected from a single sample measured at two different points in time. A researcher is interested in testing whether scores are higher at the second measurements.
Time 1 8 6 7 5 2 8 9 3 4 7

Time 2 7 9 11  6 4 5 8 7 4 5

a) What are the appropriate hypotheses for this analysis? b) What is/are the critical value(s) for this test at a 0.05 alpha level? c) What is the estimated standard error for this test? d) What is the observed value of the appropriate test statistic? e) What is your decision regarding the stated hypotheses?

The table below represents data on a variable of interest collected from a single sample measured at two different points in time. A researcher is interested in testing whether scores are higher at the second measurements.

Time 1: 8 6 7 5 2 8 9 3 4 7

Time 2: 7 9 11 6 4 5 8 7 4 5

a) What are the appropriate hypotheses for this analysis?

b) What is/are the critical value(s) for this test at a 0.05 alpha level?

c) What is the estimated standard error for this test?

d) What is the observed value of the appropriate test statistic?

e) What is your decision regarding the stated hypotheses?

A) A person can take either of two routes to work, through Matteson or Richton Park. Both take on average 35 minutes, and travel times are Normally distributed. But are the variances of the travel times different? A random sample with n = 6 using the Matteson route, and another random sample with n = 7 using the Richton Park route, showed a variance of 40 (units: square minutes) and 30 respectively. To test whether the variances are different, the following test of hypothesis is to be carried out: H0: sigma subscript 1 superscript 2 space equals space sigma subscript 2 superscript 2 H1: sigma subscript 1 superscript 2 space not equal to space sigma subscript 2 superscript 2 To test this at 10% level of significance, what is the critical value for the test statistic? (Give two decimal places)

B) A supermarket claims that the average wait time at the checkout counter is less than 9 minutes. We can assume that the population is Normally distributed.

Consider

H0: mu >= 9

H1: mu < 9

A random sample of 50 customers yielded an average wait time of 8.5 minutes and a standard deviation of 2.5 minutes.

What is the value of the test statistic (tstat or t-sub-xbar)?

(Provide two decimal places)

Access the hourly wage data on the below Excel Data File (Hourly Wage). An economist wants to test if the average hourly wage is less than $28. Assume that the population standard deviation is $8.

b-1. Find the value of the test statistic. (Negative value should be indicated by a minus sign. Round intermediate calculations to at least 4 decimal places and final answer to 2 decimal places.)

Bay Inc. purchased some new equipment on January 1, 2019, with a list price of $50,000. The supplier agreed to accept a deposit of $20,000 on the date of purchase and a promissory note requiring payment of $10,000 on each December 31 for the next three years (December 31, 2019, to December 31, 2021). Bay is pleased that no interest is charged on the note since its bank would have charged 7% interest.

The equipment arrived on January 5, 2019, with a separate invoice of $2,000 for freight and transporting the equipment. The machine had several test runs in March and April 2019 at a total cost of $4,000, and it became operational on May 1, 2019. It is expected to last eight years from the date depreciation starts, and it has a residual value of $6,000.

Required

a. Prepare all journal entries that Bay should record relating to the items described above for the year ended December 31, 2019. Wayfair uses the double-declining-balance method of depreciation for all of its property, plant and equipment. Show your calculations.

b. Wayfair also has a separate division that specializes in the sale of small appliances. At the 2019 fiscal year end, Wayfair had three key inventory items which may require a writedown. The cost and estimated net realizable values (NRVs) of the items are as follows:

Per Unit

  Quantity Cost NRV

Juicer.       3,000   $25 $30

Bread Toaster 3,500 $30 $28

Oven 1,900 $24 $20

Calculate the amount (if any) that inventory should be written down by if the lower of cost and NRV is applied on an item-by-item basis. Provide the journal entry (if any) to record the writedown on inventory. Bay uses the inventory allowance method.

8. Explain the liability of bailees for lost damaged, or destroyed goods?

Business Law questions

A company has two projects to choose from, either option will be repeated when its lifetime is over (i.e., once you choose one, you will use that option forever).

Option A costs $10K and lasts 3 years and option B costs $18K and lasts 6 years. Prices are going up by 2% per year (that is, initial costs go up at the inflation rate). A company funds itself with half debt and half equity where debt costs 5% and equity costs twice as much (ignore taxes).

Company’s last rejected project had an IRR of 7%. Which option should this company pick?