A company installed a piece of equipment with a 5-year life and no salvage value. The new equipment costs $500,000 and will generate $150,000 in savings each year. Old equipment with a book value of $50,000 and a remaining life of 2 years was sold for $20,000. No changes in working capital are anticipated. The effective income tax rate is 40%. The total initial investment for the new equipment is a. $450,000. b. $468,000. c. $500,000. d. $550,000.

Money reports that the average annual cost of the first year of owning and caring for a large dog in 2017 is $1,448. The Irish Red and White Setter Association of America has requested a study to estimate the annual first-year cost for owners of this breed. A sample of 50 will be used. Based on past studies, the population standard deviation is assumed known with σ = $260.

1,902 2,042 1,936 1,817 1,504 1,572 1,532 1,907 1,882 2,153 1,945 1,335 2,006 1,516 1,839 1,739 1,456 1,958 1,934 2,094 1,739 1,434 1,667 1,679 1,736 1,670 1,770 2,052 1,379 1,939 1,854 1,913 2,163 1,737 1,888 1,737 2,230 2,131 1,813 2,118 1,978 2,166 1,482 1,700 1,679 2,060 1,683 1,850 2,232 2,294

(a) What is the margin of error for a 95% confidence interval of the mean cost in dollars of the first year of owning and caring for this breed? (Round your answer to nearest cent.) $

(b) The DATAfile Setters contains data collected from fifty owners of Irish Setters on the cost of the first year of owning and caring for their dogs. Use this data set to compute the sample mean. Using this sample, what is the 95% confidence interval for the mean cost in dollars of the first year of owning and caring for an Irish Red and White Setter? (Round your answers to nearest cent.)

In a study of monthly salary distribution of residents in Paris conducted in year 2015, it was found that the salaries had an average of €2200 (EURO) and a standard deviation of €550. Assume that the salaries were normally distributed.

In 2017, a study on the salary distribution of Paris residents was conducted. Assume that the salaries were normally distributed. A random sample of 10 salaries was selected and the data are listed below:

Question 1: Assume that the standard deviation of the salaries was still the same as in 2015. Estimate the average salary (in 2017) with 95% confidence.

Question 2: The assumption made in Question 8 was certainly unrealistic. Estimate the average salary (in 2017) with 95% confidence again assuming that the standard deviation had changed from 2015.

Question 3: Estimate the variance of monthly salaries of Paris residents (in 2017) based on the sample provided above at a 95% confidence level.

A similar study was conducted on salary distribution of Paris residents in 2019. The research team aimed to estimate the average salary. They chose the 98% confidence and assumed that the population standard deviation was the same as in 2015. Assume again that those salaries were normally distributed.

Question 4 :If they would like the (margin of) error to be no more than €60, how large a sample would they need to select? (That is, find the minimum sample size.)

Select one:

A: 322

B: 323

C: 456

D: 457

A company is considering an investment in a new product with a 10-year horizon (product will be sold for 10 years). The upfront investment is $7 million and it is assumed to depreciate on a straight-line basis for 10 years, with no residual value. Fixed costs are assumed to be $500,000 per year. The company estimates variable cost per unit (v) to be $75 and expects to sell each unit for $315. There are no taxes and the required rate of return is 22% per year. Assume that the investment would occur today, and all future cash-flows will occur at the end of each year beginning in one year.

For the following questions, give all answers ROUNDED UP to the next highest WHOLE unit (ie 421.2 would be rounded to 422):

What is the accounting breakeven quantity?   

What is cash break even quantity?  

What is the NPV of this project if the required rate is 7%?

Year       CF
0          -$1312
1           $743
2           $1757
3           $2148

The Bureau of Labor Statistics reported that the average yearly income of dentists in the year 2012 was $110,000.  A sample of 81 dentists, which was taken in 2013, showed an average yearly income of $120,000.  Assume the standard deviation of the population of dentists’ incomes in 2013 is $36,000.

In the year in which it intends to go public, a firm has revenues of $20 million and net income after taxes of $2 million. The firm has no debt, and revenue is expected to grow at 20% annually for the next five years and 5% annually thereafter. Net profit margins are expected remain constant throughout. Capital expenditures are expected to grow in line with depreciation and working capital requirements are minimal. The average beta of a publicly traded company in this industry is 1.50 and the average debt/equity ratio is 20%. The firm is managed very conservatively and does not intend to borrow through the foreseeable future. The Treasury bond rate is 6% and the tax rate is 40%. The normal spread between the return on stocks and the risk free rate of return is believed to be 5.5%. Reflecting the slower growth rate in the sixth year and beyond, the firm’s discount rate is expected to decline to the industry average cost of capital of 10.4%. Estimate the value of the firm’s equity.

As part of a major renovation at the beginning of the year, Atiase Pharmaceuticals, Inc. sold shelving units (recorded as Equipment) that were 10 years old for $920 cash. The shelves originally cost $6,880 and had been depreciated on a straight-line basis over an estimated useful life of 10 years with an estimated residual value of $480.

1. Complete the table below, indicating the account, amount, and direction of the effect on disposal. Assume that depreciation has been recorded to the date of sale. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign. Do not round intermediate calculations.)

2. Prepare the journal entry to record the sale of the shelving units. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)

The net changes in the balance sheet accounts of Eusey, Inc. for the year 2018 are shown below:

Prepare a statement of cash flows (indirect method). Ignore tax effects. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

For a new product, sales volume in the first year is estimated to be 50,000 units and is projected to grow at a rate of 7% per year. The selling price is $100 and will increase by $10 each year. Per-unit variable costs are $22 and annual fixed costs are $1,000,000. Per-unit costs are expected to increase 4% per year. Fixed costs are expected to increase 10% per year.

Develop a spreadsheet model to predict the net present value of profit over a three-year period, assuming a 4% discount rate.

Please include Excel worksheet with all the details.