Skate and Cycle Co. had the following transactions for April. They charge 5% GST and 8% PST on all sales.

Prepare journal entries to record each of the preceding transactions. Assume a perpetual inventory system. Use appropriate account names from the available chart of accounts & omit explanations.

We wish to predict the salary for baseball players (yy) using the variables RBI (x1x1) and HR (x2x2), then we use a regression equation of the form ˆy=b0+b1x1+b2x2y^=b0+b1x1+b2x2.

• HR - Home runs - hits on which the batter successfully touched all four bases, without the contribution of a fielding error.
• RBI - Run batted in - number of runners who scored due to a batters's action, except when batter grounded into double play or reached on an error
• Salary is in millions of dollars.

The following is a chart of baseball players' salaries and statistics from 2016.

a) Use software to find the multiple linear regression equation. Enter the coefficients rounded to 4 decimal places.
ˆy=y^=  +  x1x1 +  x2x2  

b) Use the multiple linear regression equation to predict the salary for a baseball player with an RBI of 49 and HR of 22. Round your answer to 1 decimal place, do not convert numbers to dollars.
millions of dollars

c) Holding all other variables constant, what is the correct interpretation of the coefficient b1=0.111b1=0.111 in the multiple linear regression equation?

• For each RBI, a baseball player's predicted sallary increases by 0.111 million dollars.
• If the baseball player's salary increases by 0.111 million dollars, then the predicted RBI will increase by one.
• If the baseball player's salary increases by 0.111 million dollars, then the predicted RBI will increase by 0.0371.
• For each HR, a baseball player's predicted sallary increases by 0.111 million dollars.

d) Holding all other variables constant, what is the correct interpretation of the coefficient b2=0.0371b2=0.0371 in the multiple linear regression equation?

• If the baseball player's salary increases by 0.0371 million dollars, then the predicted HR will increase by one.
• For each RBI, a baseball player's predicted sallary increases by 0.0371 million dollars.
• If the baseball player's salary increases by 0.0371 million dollars, then the predicted HR will increase by 0.111.
• For each HR, a baseball player's predicted sallary increases by 0.0371 million dollars.

Calculate the NPV for the following projects. Round PVF values in intermediate calculation to four decimal places. Round answers to two decimal places. Use a minus sign to indicate a negative NPV.

1. An outflow of $7,000 followed by inflows of $3,000, $2,500, and $3,500 at one-year intervals at a cost of capital of 7%.
   $
   
2. An initial outlay of $35,400 followed by inflows of $6,500 for three years and then a single inflow in the fourth year of $18,000 at a cost of capital of 13%. (Recognize the first three inflows as an annuity in your calculations.)
   $
   
3. An initial outlay of $27,500 followed by an inflow of $3,000 followed by five years of inflows of $5,500 at a cost of capital of 9%. [Recognize the last five inflows as an annuity, but notice that it requires a treatment different from the annuity in part (b).]
   $

Suppose that the term structure of interest rates is flat in England and Germany. The GBP interest rate is 4% per annum and the EUR rate is 3% per annum. In a swap agreement, a financial institution pays 9% per annum in GBP and receives 7% per annum in EUR. The exchange rate between the two currencies has changed from 1.1 EUR per GBP to 1.15 EUR per GBP since the swap’s initiation. The principal in British pounds is 20 million GBP. Payments are exchanged every year, with one exchange having just taken place. The swap will last three more years. What is the value of the swap to the financial institution in terms of euros? Assume all interest rates are continuously compounded.

Suppose that the term structure of interest rates is flat in England and Germany. The GBP interest rate is 4% per annum and the EUR rate is 3% per annum. In a swap agreement, a financial institution pays 9% per annum in GBP and receives 7% per annum in EUR. The exchange rate between the two currencies has changed from 1.1 EUR per GBP to 1.15 EUR per GBP since the swap’s initiation. The principal in British pounds is 20 million GBP. Payments are exchanged every year, with one exchange having just taken place. The swap will last three more years. What is the value of the swap to the financial institution in terms of euros? Assume all interest rates are continuously compounded.

3. An experiment was conducted to evaluate the effectiveness of a treatment for tapeworm in the stomachs of sheep. A random sample of 24 worm-infected lambs of approximately the same age and health was randomly divided into two groups. Twelve of the lambs were injected with the drug and the remaining twelve were left untreated. After 6 months, the lambs were slaughtered and the following worm counts were recorded. Assume the counts are approximately normally distributed.

Drug-treatedsheep 18, 43, 28, 50, 16, 32, 13, 35, 38, 33, 6, 7

Untreatedsheep 40, 54, 26, 63, 21, 37, 39, 23, 48, 58, 23, 39

1. Construct a 98% confidence interval for the difference of the worm count in a lamb.
2. Please perform a statistical test and see if the drug treatment reduced the mean worm count in a lamb. Use the significance level 0.05.
3. What are your assumptions that you assumed in part (b)?

An experiment was conducted to evaluate the effectiveness of a treatment for tapeworm in the stomachs of sheep. A random sample of 24 worm-infected lambs of approximately the same age and health was randomly divided into two groups. Twelve of the lambs were injected with the drug and the remaining twelve were left untreated. After 6 months, the lambs were slaughtered and the following worm counts were recorded. Assume the counts are approximately normally distributed.

Drug-treatedsheep 18 43 28 50 16 32 13 35 38 33 6 7

Untreatedsheep   40 54 26 63 21 37 39 23 48 58 23 39

(a) Construct a 98% confidence interval for the difference of the worm count in a lamb.

(b) Please perform a statistical test and see if the drug treatment reduced the mean worm count in a lamb. Use the significance level 0.05.

(c) What are your assumptions that you assumed in part (b)?

An experiment was conducted to evaluate the effectiveness of a treatment for tapeworm in the stomachs of sheep. A random sample of 24 worm-infected lambs of approximately the same age and health was randomly divided into two groups. Twelve of the lambs were injected with the drug and the remaining twelve were left untreated. After 6 months, the lambs were slaughtered and the following worm counts were recorded. Assume the counts are approximately normally distributed.

Drug-treated sheep 18, 43, 28, 50, 16, 32, 13, 35, 38, 33, 6, 7

untreated sheep 40, 54, 26, 63, 21, 37, 39, 23, 48, 58, 23, 39

(a) Construct a 98% confidence interval for the difference of the worm count in a lamb.

(b) Please perform a statistical test and see if the drug treatment reduced the mean worm count in a lamb. Use the significance level 0.05.

(c) What are your assumptions that you assumed in part (b)

1. Use the XLMiner Analysis ToolPak to find descriptive statistics for Sample 1 and Sample 2. Select "Descriptive Statistics" in the ToolPak, place your cursor in the "Input Range" box, and then select the cell range A1 to B16 in the sheet. Next, place your cursor in the Output Range box and then click cell D1 (or just type D1). Finally make sure "Grouped By Columns" is selected and all other check-boxes are selected. Click OK. Your descriptive statistics should now fill the shaded region of D1:G18. Use your output to fill in the blanks below.

   Sample 1 Mean:  (2 decimals)

   Sample 1 Standard Deviation:  (2 decimals)

   Sample 2 Mean:  (2 decimals)

   Sample 2 Standard Deviation:  (2 decimals)

2. Use a combination of native Excel functions, constructed formulas, and the XLMiner ToolPak to find covariance and correlation.

   In cell J3, find the covariance between Sample 1 and Sample 2 using the COVARIANCE.S function.

   (2 decimals)

   In cell J5, find the correlation between Sample 1 and Sample 2 using the CORREL function.
   (2 decimals)

   In cell J7, find the correlation between Sample 1 and Sample 2 algebraically, cov/(sx*sy), by constructing a formula using other cells that are necessary for the calculation.

   (2 decimals)

   Use the XLMiner Analysis ToolPak to find the correlation between Sample 1 and Sample 2. Place your output in cell I10.

   (2 decimals)

3. Calculate z-scores using a mix of relative and absolute cell references. In cell A22, insert the formula =ROUND((A2-$E$3)/$E$7,2). Next grab the lower-right corner of A22 and drag down to fill in the remaining green cells of A23 to A36. Note how the formula changes by looking in Column D. Changing a cell from a relative reference such as E3 to an absolute reference such as $E$3 means that cell remains "fixed" as you drag. Therefore the formula you entered into A22 takes each data observation such as A2, A3, A4..., subtracts $E$3 and then divides by $E$7. Since the last two cells have absolute references they will not change as you drag. The ROUND function simply rounds the z-score to two digits.

   Now find the z-scores for Sample 2 using the same method you learned above by editing the formula to refer to the correct cells for Sample 2. Make sure each z-score is rounded to 2 places.

   Sample 2 z-scores