Question: In a small scale market study investigating brand liking (Y) for product variations with differen...

In a small scale market study investigating brand liking (Y) for product variations with different moisture content (X₁) and sweetness (X₂), the following data were obtained.

Problem: Regress Liking on each of the other two factors independently. Regress Liking on both of the two other factors simultaneously. Discuss results. Based on the multiple regression, what would the expected liking for a product variation that includes 7 moisture content and 5 sweetness? Is this a valid expectation? Why or why not?

Modern Services sells various components to maintain on-shore rigs and derricks. The company has just approached Linden State Bank requesting a $300,000 loan to strengthen the Cash account and to pay certain pressing short-term obligations. The company’s financial statements for the most recent two years follow:
MODERN SERVICES
Comparative Balance Sheet
Assets This Year       Last Year
Current assets:
   Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . .    $ 90,000       $ 200,000
   Marketable Securities . . . . . . . . . . . . . . . . . .     0       50,000
   Accounts Receivable, net . . . . . . . . . . . . . . . .     650,000       400,000
   Inventory . . . . . . . . . . . . . . . . . . . . . . . . . 1,300,000       800,000
   Prepaid Expenses . . . . . . . . . . . . . . . . . . . . 20,000       20,000
Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . 2,060,000       1,470,000
Plant and equipment, net . . . . . . . . . . . . . . . . . . . . 1,940,000       1,830,000
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000       3,300,000

Liabilities and Stockholders’ Equity
Liabilities:
   Current Liabilities . . . . . . . . . . . . . . . . . . . . $ 1,100,000       $ 600,000
   Bonds Payable, 12% . . . . . . . . . . . . . . . . . . 750,000       750,000
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 1,850,000       1,350,000  
Stockholders’ Equity:
   Preferred Stock, $50 par, 8% . . . . . . . . . . . . . 200,000       200,000
   Common Stock, $10 par . . . . . . . . . . . . . . . .    500,000       500,000
   Retained Earnings . . . . . . . . . . . . . . . . . . . 1,450,000       1,250,000
Total Stockholders’ Equity . . . . . . . . . . . . . . . . . . . 2,150,000       1,950,000
Total Liabilities and Stockholders’ Equity . . . . . . . . . . . 4,000,000       3,300,000

MODERN SERVICES
Comparative Income Statement
Assets This Year       Last Year
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,000,000   $ 6,000,000
Less cost of goods sold . . . . . . . . . . . . . . . . . . . . . .   5,400,000       4,800,000
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . .   1,600,000       1,200,000
Less operating expenses . . . . . . . . . . . . . . . . . . . . .     970,000       710,000
Net Operating income . . . . . . . . . . . . . . . . . . . . . .     630,000       490,000
Less interest expense . . . . . . . . . . . . . . . . . . . . . . .     90,000       90,000
Net income before taxes . . . . . . . . . . . . . . . . . . . . .     540,000       400,000
Less income taxes (40%) . . . . . . . . . . . . . . . . . . . . .     216,000       160,000
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . .     324,000       240,000
Dividends paid:
   Preferred dividends . . . . . . . . . . . . . . . . . . .     16,000       16,000
   Common dividends . . . . . . . . . . . . . . . . . . . .   108,000       60,000
Total dividends paid . . . . . . . . . . . . . . . . . . . . . . . .     124,000       76,000
Net income retained . . . . . . . . . . . . . . . . . . . . . . . .     200,000       164,000
Retained earnings, beginning of year . . . . . . . . . . . . . . .   1,250,000       1,086,000
Retained earnings, end of year . . . . . . . . . . . . . . . . . . $ 1,450,000   $ 1,250,000

During the past year, the company has explained the number of lines that is carries in order to stimulate sales and increase profits. It has also moved aggressively to acquire new customers. Sales terms are 2/10, n/30/. All sales are on account.

                Assume that the following ratios are typical of firms in the building supply industry:

                                Current ratio . . . . . . . . . . . . . . . . . . .       2.5 to 1

                                Acid-test ratio . . . . . . . . . . . . . . . . . .      1.2 to 1

                                Average age of receivables . . . . . . . . . . .     18 days

                                Inventory turnover in days . . . . . . . . . . .     50 days

                                Debt-to-equity ratio . . . . . . . . . . . . . . .     0.75 to 1

                                Times interest earned . . . . . . . . . . . . . .    6.0 times

                                Return on total assets . . . . . . . . . . . . . .    10%

                                Price-earnings ratio . . . . . . . . . . . . . . .      9

                                Net income as a percentage of sales . . . . . . 4%

1. Linden State Bank is uncertain whether the loan should be made. To assist it in making a decision, you have been asked to compute the following ratios for both this year and last year:
   1. The amount of working capital
   2. The current ratio
   3. The acid-test ratio
   4. The average age of receivables. (The accounts receivable at the beginning of last year totaled $350,000)
   5. The inventory turnover in days. (The inventory at the beginning of last year totaled $720,000)
   6. The debt-to-equity ratio
   7. The number of times interest was earned
2. For both this year and last year (carry computations to one decimal place)
   1. Present the balance sheet in common-size form              
   2. Present the income statement in common-size form down through net income
3. From your analysis in (1) and (2) above, what problems or strengths do you see existing in Modern Services? Make a recommendation as to whether the loan should be approved.

Cotopaxi makes backpacks. Traditionally, they bought fabric in quantity, and cut out the forms for their backpacks from large pieces, discarding the interstitial material as scrap. Due to the integrated nature of the production facility, the cost of all this fabric was considered a joint cost, allocated by the approximate relative sales value method, and the scraps were considered a waste by-product. Recently however, an enterprising employee had the great idea to use these scraps and make small, unique bags from the heretofore-discarded pieces of fabric. The company agreed to implement this idea on a trial basis, and the accounting department decided to consider these bags a by-product using the net realizable value method. The marketing department set the price for the by-product bags at $50, and in the first year of production, 10,000 of these scrap bags were sold. At the end of the first year, the accounting department determined that each bag incurred an additional processing cost of $40 on average in additional materials (straps, buckles, thread, etc.), labor, and variable overhead (not including the cost of the scrap fabric from whence they came).   

How much additional income does selling the by-product bags earn Cotopaxi (per bag)?

-$40 per bag (loss)

$0 per bag

$10 per bag

$40 per bag

$50 per bag

What is the amount of Joint Cost, under the Net Realizable Value method, that will be allocated to each by-product bag?

-$40 of Joint Cost per bag

$0 of Joint Cost per bag

$10 of Joint Cost per bag

$40 of Joint Cost per bag

$50 of Joint Cost per bag

Given your answers to the two previous questions, and recalling that Cotopaxi uses the net realizable value method to account for the by-product bags, how much profit per bag will be recognized by the by-product bag division?

-$40 per bag (loss)

$0 per bag

$10 per bag

$40 per bag

$50 per bag

The Glades Company is a small manufacturer. It has produced and marketed a number of different toys and appliances that have done very well in the marketplace. Late last year, the product designer at the company, Tom Berringer, told the president, Paula Glades, that he had invented a small, cuddly, talking bear that might have a great deal of appeal. The bear is made of fluffy brown material that simulates fur, and it has a tape inside that contains 50 messages.

The Glades Company decided to find out exactly how much market appeal the bear would have. Fifty of the bears were produced and placed in kindergartens and nurseries around town. The results were better than the firm had hoped. One of the nurseries reported: “The bear was so popular that most of the children wanted to take it home for an evening.” Another said the bear was the most popular toy in the school.

Based on these data, the company decided to manufacture and market 1,000 of the bears. At the same time, a catchy marketing slogan was formulated: “A Friend for Life.” The bear was marketed as a product a child could play with for years and years. The first batch of 1,000 bears sold out within a week. The company then scheduled another production run, this time for 25,000 bears. Last week, in the middle of the production run, a problem was uncovered. The process of making the bear fur was much more expensive than anticipated. The company is now faced with two options: It can absorb the extra cost and have the simulated fur produced, or it can use a substitute fur that will not last as long. Specifically, the original simulated fur will last for up to seven years of normal use; the less-expensive simulated fur will last for only eight months.

Some of the managers at Glades believe that most children are not interested in playing with the same toy for more than eight months; therefore, substituting the less-expensive simulated fur for the more-expensive fur should be no problem. Others believe that the company will damage its reputation if it opts for the substitute fur. “We are going to have complaints within eight months, and we are going to rue the day we agreed to a cheaper substitute,” the production manager argues. The sales manager disagrees, contending that “the market is ready for this product, and we ought to provide it.” In the middle of this crisis, the accounting department issued its cost analysis of the venture. If the company goes with the more-expensive simulated fur, it will lose $5.75 per bear. If it chooses the less-expensive simulated fur, it will make a profit of $14.98 per bear.

The final decision on the matter rests with Paula Glades. People on both sides of the issue have given her their opinion. One of the last to speak was the vice president of manufacturing, who said, “If you opt for the less-expensive fur, think of what this is going to do to your marketing campaign of ‘A Friend for Life.’ Are you going to change this slogan to ‘A Friend for Eight Months’?” But the marketing vice president urged a different course of action: “We have a fortune tied up in this bear. If you stop production now or go to the more-expensive substitute, we’ll lose our shirts. We aren’t doing anything illegal by substituting the fur. The bear looks the same. Who’s to know?”

QUESTIONS

1. If you were advising Paula, what would you recommend?

1- A carpenter purchased 50 ft of redwood and 70 ft of pine for a total cost of $259. A second purchase, at the same prices, included 80 ft of redwood and 50 ft of pine for a total cost of $340. Find the cost per foot of redwood and of pine.

2- An investment club placed $27,000 into two simple interest accounts. On one account, the annual simple interest rate is 6.5%. On the other, the annual simple interest rate is 2.5%. How much should be invested in each account so that both accounts earn the same annual interest?

3-Two investments earn an annual income of $422. One investment earns an annual simple interest rate of 8.9%, and the other investment earns an annual simple interest rate of 6.1%. The total amount invested is $6000. How much is invested in each account?

6. Your statistics professor is involved in another educational outreach program designed to decrease participants’ levels of stress. She designed a study in which participants were randomly assigned to two groups. One group completed a 30-minute meditation. A second, control group watched television for 30-minutes. After 30 minutes, participants reported their level of stress.

Your professor, again, asks for your assistance. She predicts that the average level of stress will differ significantly between the meditation and control groups. She wants to use an alpha level of 0.05. (50 Points)

a. Are you running a one-tailed or two-tailed test?

b. Write your alternative and null hypotheses.

c. Which statistical analysis will you use to run your test (e.g. one-sampled t-test, an independent-samples t-test, a paired t-test, or chi-square test)?

d. Run your statistical analysis using SPSS.

(Remember, if you are running a one-tailed test, your alpha value is located in one-tail, meaning your p-value needs to be less than 0.05 to reject the null hypothesis.

If you are running a two-tailed test, your alpha value is divided in half, meaning your p-value needs to be less than 0.025 to reject the null hypothesis)

Can you give me each step of this problem?

A researcher would like to evaluate the effectiveness of a pain-relief patch designed for lower back pain. Prior to testing the patch, each of n = 8 patients rates the current level of back pain on a scale from 1 to 10. After wearing the patch for 90 minutes, a second pain rating is recorded. The data are as follows:

                  Before      After

                        6            2

                        8            3

                        9            4

                        8            1

                      10           2

                        5            3

                        9            8

                        7            7

• Compute the mean and variance for the sample of difference scores.
• Do the results indicate a significant difference?
• Use a two-tailed test with α = .05
• Compute Cohen’s d to measure the size of the effect.

Companies U and L are identical in every respect except that U is unlevered while L has $12 million of 8% bonds outstanding. Assume that: (1) All of the MM assumptions are met. (2) Both firms are subject to a 40% federal-plus-state corporate tax rate. (3) EBIT is $3 million. (4) The unlevered cost of equity is 10%.

1. What value would MM now estimate for each firm? (Hint: Use Proposition I.) Enter your answers in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answers to two decimal places.
   Company U   $  million
   Company L    $  million
   
   
2. What is r_s for Firm U? Round your answer to one decimal place.
   %
   
   What is r_s for Firm L? Do not round intermediate calculations. Round your answer to one decimal place.
   %
   
3. Find S_L, and then show that S_L + D = V_L results in the same value as obtained in Part a. Enter your answers in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answers to two decimal places.
   S_L = $  million
   S_L + D = $  million
   
4. What is the WACC for Firm U? Do not round intermediate calculations. Round your answer to two decimal places.
   %
   What is the WACC for Firm L? Do not round intermediate calculations. Round your answer to two decimal places.
   %

MM with Corporate Taxes Companies U and L are identical in every respect except that U is unlevered while L has $14 million of 8% bonds outstanding. Assume that: (1) All of the MM assumptions are met. (2) Both firms are subject to a 40% federal-plus-state corporate tax rate. (3) EBIT is $4 million. (4) The unlevered cost of equity is 12%. What value would MM now estimate for each firm? (Hint: Use Proposition I.) Enter your answers in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answers to two decimal places. Company U $ 20 million Company L $ 25.6 million What is rs for Firm U? Round your answer to one decimal place. 12 % What is rs for Firm L? Do not round intermediate calculations. Round your answer to one decimal place. % Find SL, and then show that SL + D = VL results in the same value as obtained in Part a. Enter your answers in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answers to two decimal places. SL = $ million SL + D = $ million What is the WACC for Firm U? Do not round intermediate calculations. Round your answer to two decimal places. % What is the WACC for Firm L? Do not round intermediate calculations. Round your answer to two decimal places. %

In humans, the allele for brown eyes (B) is dominant. The allele for blue eyes (b) is
recessive. If a woman with genotype Bb and a man with genotype Bb have a child,
what will be the likelihood of the child having blue eyes?
a 0%
b 75%
c 50%
d 25%
e 100%
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What would be the result of a cell that underwent mitosis but not cytokinesis?
a Two daughter cells with no nucleus
b One daughter cell with two nuclei, each containing a normal number of
chromosomes
c Two daughter cells that are unusually small
d Two daughter cells with twice the number of chromosomes
e One daughter cell with one nucleus containing twice the normal number of
chromosomes
---------------------------
What two processes are responsible for the transfer of information from genes to
proteins?
a respiration and translation
b translation and protein synthesis
c respiration and protein synthesis
d translation and mutation
e transcription and translation
--------------------
What is the function of the lysosomes?
a Packaging of proteins
b Digestion and waste removal
c Maintaining cell structure
d Production of energy
e Storage