You deposit $5,000 into an account at the end of year 0. You deposit $5,000 every three
(3) months beginning at the end of year 1 and continuing through the end of year 3.
You also deposit into the account an amount X starting at the end of year 6 and repeat it
every three (3) months for a total of four (4) deposits. You withdraw $112,160 at the
end of year 7. After the withdrawal at the end of year 7, there is no more money in the
account. The account pays 4% compounded quarterly. What is the amount you must
every three (3) months deposit starting at the end of year 6 (value of X)?

A person deposits​ $1,000 in an account every year for four years​ (Years 1 through​ 4), and withdraws half of the balance of the account at the end of Year 4. They put nothing in the account for two years​ (Years 5 and​ 6), then deposit​ $1,500 in the account every year for four more years​ (Years 7 through​ 10). They withdraw the entire balance of the account at the end of Year 10. The account earns​ 6% interest per year for the entire 10 years.

a. Choose the correct cash flow diagram from the​ person's point of view.

b. How much is withdrawn at the end of Year​ 4?

c. How much is withdrawn at the end of Year​ 10?

a. Assuming that the expectations hypothesis is valid, compute the price of the four-year bond shown below at the end of (i) the first year; (ii) the second year; (iii) the third year; (iv) the fourth year. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Beginning of Year Price of Bond Expected Price

1 $973.40

2 $913.47

3 $862.62

4 $778.66

b. What is the rate of return of the bond in years 1, 2, 3, and 4? Conclude that the expected return equals the forward rate for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

A machine costing $209,000 with a four-year life and an estimated $17,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 480,000 units of product during its life. It actually produces the following units: 122,500 in Year 1, 124,300 in Year 2, 121,600 in Year 3, 121,600 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate—this difference was not predicted. (The machine cannot be depreciated below its estimated salvage value.)

Required:

Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method.

Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Straight-line depreciation.

Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Straight-line depreciation.

b/

Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of production.

Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Double-declining-balance.

. In the past year, a total of 300 deaths due to pregnancy conditions were reported as well as 3,500,000 live births. Calculate the maternal mortality rate for the year.

2. The state population in the past year was 20 million. Live births in the same year totaled 400,000. Infant deaths in that year were 5,000. Calculate the infant mortality rate for the year.

3. The state population for the year was 20 million. Live births in the same year totaled 324,600. Deaths were as follows: fetal deaths (3,244); neonatal deaths (2,200); postneonatal deaths (2,700); and infant deaths (4,900). Calculate the postneonatal mortality rate for the year.

4. The state population for the year was 20 million. Live births in the same year totaled 350,000. Deaths were as follows: fetal deaths (3,000); neonatal deaths (2,500); postneonatal deaths (2,500); and infant deaths (5,000). Calculate the perinatal mortality rate for the year.

5. In a given setting, live births totaled 350,000. Deaths were as follows: fetal (intermediate and late were 3,000); neonatal deaths (1,800); postneonatal deaths (1,600); and infant deaths (3,400). Calculate the fetal death rate.

6. A state has a midyear population of 25 million. A total of 135,000 new cases of gonorrhea were reported during that year. Calculate the incidence of gonorrhea in the state that year.

7. Read chapter 12 and define the following terms:

Distinguish clearly between:

• Ungrouped vs. grouped distribution

• Frequency vs. cumulative frequency

• Percentile rank vs. percentile score

8. Complete the following problems and show your calculation work:

• Self-Test 11-1 (p.223) - 11-10 (p.213)

HuaWei Ltd manufactures a variety of electrical equipment. Project P30 is a new product that HuaWei is considering introducing to the market. The company’s finance team has collected a lot of information about the project below: (Note: You may or may not need to use all this informati • The company paid a consulting firm $600,000 last year for a test marketing analysis, as part of the evaluation. • The HuaWei will have to purchase a new machine to produce the electrical products. The machine has an upfront cost of $5,000,000 at Year 0. • The machine will be depreciated on a straight-line basis over 4 years to a zero balance. The company expects that the machine will be sold for $60,000 when the project is completed at Year 4. • At Year 0, the net working capital will increase by $150,000. In the final year of the project (Year 4), net working capital will be fully recovered. • Forecasted sales quantity, selling price and production costs of Project ABC are presented below. Year 1 Year 2 Year 3 Year 4 Sales quantity 3,000,000 units 3,000,000 units 3,000,000 units 3,000,000 units Selling price $3 per unit $3 per unit $3 per unit $3 per unit Fixed cost of production $2,000,000 per year $2,000,000 per year $2,000,000 per year $2,000,000 per year Variable cost of production $2 per unit $2 per unit $2 per unit $2 per unit • The company’s tax rate is 35 percent. • The project’s cost of capital is estimated to be 25 percent per annum. a. Calculate the net present value of the proposed project (see overpage for a template) b. Should the project be accepted or rejected?

Your company has two alternatives to consider for purchasing new heat treating ovens for hardening and annealing production metal assemblies. Details of each alternative are given below. Draw the cash flow diagram for each and assume your company’s MARR is 8%. Using a present value comparison which alternative do you recommend?

Alternative A: The TomKin Oven Company will sell your company 5 heat treating ovens with manual feeds and extraction mechanisms. The ovens will initially cost $18,000 each and have an estimated life of 7 years. They will all require insulation overhauls in year 4 costing $2,500 each. At the end of their life each oven is estimated to be worth $2,000. The ovens will result in tougher metal assemblies which is estimated to save the company $57,000 per year total in year 1 increasing by $3,500 per year total every year after year 1.

Alternative B: The Quickspeed Heat Treat Equipment Company will also sell your company 5 heat treating ovens but with automatic feeds and extraction mechanisms. The ovens will initially cost $25,000 each and have an estimated life of 7 years. They will not require any insulation overhauls but are each expected to have maintenance issues costing $700 each in year 1 and then increasing by $400 each for every year after year 1. At the end of their life, each oven is estimated to be worth $3,000. The ovens will result in tougher metal assemblies which is estimated to save the company $70,000 per year total in year 1 increasing by $4,100 per year total every year after year 1.

During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows:

* $3 per unit variable; $253,000 fixed each year.

The company’s $39 unit product cost is computed as follows:

Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings.

Production and cost data for the first two years of operatons are:

Required:

2. What is the variable costing net operating income in Year 1 and in Year 2?

3. Reconcile the absorption costing and the variable costing net operating income figures for each year.

2)

What is the variable costing net operating income in Year 1 and in Year 2?

3)

Reconcile the absorption costing and the variable costing net operating income figures for each year. (Enter any losses or deductions as a negative value.)

1. This exercise is based on one in Hartman (2007). A pharmaceutical company needs to use a supercomputer to run simulation models as part of its research on cures for AIDS, cancer, and other diseases. The firm expects to perform thousands of simulation runs per year for the next 3 years. The firm can purchase a supercomputer for $2.5 million; the annual operating and maintenance costs are $200,000 per year, and the supercomputer can perform 15,000 runs per year. For every simulation run above 15,000 in a year, the operating costs rise $1,000 per year to cover the needed overtime. A second alternative is to outsource the simulation runs to an IT firm that offers supercomputing services on demand. They will charge the pharmaceutical company $400 per simulation run. Consider a 3-year time horizon, and assume that the number of runs per year is the same every year. The firm is not sure how many simulation runs they will need to perform each year. What is the range of total cost if the number of simulation runs varies from 10,000 to 20,000 runs per year? For what range of activity (number of simulation runs per year) is purchasing a supercomputer the lowest cost alternative?

2. Consider the supercomputer example from Exercise 1 above. The firm is not sure about some of the relevant costs. The following probability distributions reflect their beliefs about the uncertain costs: the annual operating and maintenance costs are uniformly distributed on the range [$150,000, $250,000]; the additional operating costs for simulation runs above 15,000 per year are uniformly distributed on the range [$500, $1500] (per run per year). Use the method of moments to estimate the mean and variance of the costs if the firm purchases the supercomputer and they perform 20,000 runs per year. Use Monte Carlo sampling to estimate the distribution of costs if the firm purchases the supercomputer and they perform 20,000 runs per year.

Prepare the cash flow statement (according to IFRS standards) for Stonechat plc for the year ended 31December Year 7. Stonechat plc’s income statement for the year ended 31 December Year 7 and thebalance sheet as at 31 December Year 6 and Year 7 are as follows. (12 points)

Income statement for the year ended 31 December Year 7

Balance sheets as at 31 December Year 6 and Year 7

• During Year 7, the business spent €67 million on additional plant and machinery.
• There were no other non-current asset acquisitions or disposals.
• There was no share issue for cash during the year. (There was a bonus issue of ordinary shares during theyear, but a bonus issue of ordinary shares has no cash flow effect.)
• A dividend of €60 million was paid.