Both Company A and Company B have 9 percent coupons, make semiannual payments, and are priced at par value. Company A has 3 years to maturity, whereas Company B has 17 years to maturity.

According to my records, the population of all past PSY 240 final percentage scores has a mean (μ) of 85 and standard deviation (σ) of 7 points. The new class of 36 students had a mean (M) final percentage score of 87 points. I conducted a hypothesis test to see if the new class would have significantly differently final percentage scores from the population of past students. I was interested in any type of “difference,” whether it’s an increase or a decrease in final percentage score. The significance level for my Z test was set at α= .05.

f. Determine the critical value for Z

7. Compare the obtained Z and critical Z and then make a decision about the result of the hypothesis test: Explicitly states “reject” or “fail to reject” the null hypothesis

8. Write 1-2 sentences to conclude the results (you can simply restate the accepted hypothesis or explain it in another way)

1. Calculate the raw effect size and the standardized effect size for this test.

10. Since the average final percentage score for the new section is numerically higher than the average final percentage score from the existing pool of past students, I could also set up a directional research hypothesis. What would the written hypotheses and the notations be?

11. Using the alpha level of α= .05, determine the critical Z value for the directionalhypothesis.

l. In this statistical test, how high does the mean final percentage score from the new class have to be, at least, to be considered “significantly” higher than the pool of past final percentage scores?

Hint: In other words, when does the calculated Z equal the critical Z? What needs to be the sample mean for that to happen?

Mismatch of Demand and Supply in UAE Property Market and the introduction of VAT

Chances of a major drop in Dubai’s home rentals are receding by the quarter — much of the new stock coming through is catering to the premium end of the rental market. And even if there is some softening in their asking rates, these properties are still way out of reach for budget-conscious tenants.

Phidar Advisory in its latest update on Dubai property trends offers numbers that show why. Two-thirds of the 6,000 apartments and 1,500 town houses and villas scheduled for completion during the second-half of this year are already available for leasing. Of this, villas and town houses make up a fifth, and carry rents of a minimum of Dh120,000 a year. These are generally affordable for households earning at least Dh360,000 per year, according to the consultancy.

But a sizeable number command Dh200,000 and over, and only accessible for those earning at least Dh500,000 a year and much more. “Thus, the new supply delivered is not the supply that is needed,” states the report.

Weak demand combined with moderate supply growth will lead to further rent and price atrophy, likely into and possibly through 2018,” said Downs

How VAT has affected Dubai real estate businesses, so far

It has been nearly two months since value-added tax (VAT) was introduced in the UAE and various industries are feeling its effects in different ways and varied intensity. While residential property is generally free from VAT, some Dubai real estate developers and brokers are feeling the pressure because other business expenses often incur VAT. To get a better view of the impact on real estate-related businesses in the early days of VAT, we talked to executives in the industry on the following two factors about their insights and how they are coping with the new tax regime. Their responses are noted below.

Cost-conscious developments

VAT is making the construction and real estate community more cost-conscious. As a developer, we do not charge the 5 per cent VAT to our customers. However, there is VAT impact on all the outgoings like contractors, sub-contractors, consultant, and broker commission and supplier payments. For example, on a Dh100-million construction, we would be paying Dh5 million VAT on contractor bills from January 1. The additional cost makes everyone cost-conscious and going forward I assume the contractors will try to carry out the same volume of work at lower cost by being more efficient. In a way, VAT will make every business more careful and responsible about their expenses.

Competitive pricing

If a contractor passes on VAT-related costs to the developer, it is likely to have an impact on a developer’s selling price. However, with consumers becoming more price sensitive, keeping prices competitive is critical for developers. Hence, a sudden spike in launch prices, however small, could affect demand. As such, residential off-plan sales have been exempted from any VAT, but any future inflation in construction costs could impact sales prices. The first supply of residential property is zero-rated within three years of completion, which allows developers to recover VAT on the construction of residential properties, including elements on architectural design, consulting, contracting and materials used. However, real estate developers should consider the complexities arising from mixed developments involving commercial and residential leasing and the need to assign VAT recovery.

No burden on buyers

VAT has an impact on the developer, as it cannot pass on [the tax burden] to the buyer of residential property. Building material suppliers of our residential projects send us invoices with VAT, which we the developer absorb without burdening the buyers. Therefore, the burden stops at the developer level. This will have an impact on profits of the developer. In commercial properties, the developer can pass on VAT to the buyer, but the market is not conducive to increase prices.

Minimal effect on cost

Residential property is free of VAT, so neither the developer nor the buyer is affected by its implementation as developers can be reimbursed for VAT when the first supply is in the market. Therefore, the VAT expense effect comes down to be minimal, which should not bring any difference to the prices. Practically, the implementation of VAT will increase by 1.5-2.5 per cent the general expenses of any business in the UAE, since the companies are not paying VAT on all of its transactions.

Buyers defer purchase

It is probably too early to say with any degree of accuracy exactly how VAT has affected the cost of selling within the secondary market. I did, however, state last year that the sentiment would be affected by the introduction of this tax. Some buyers will defer the purchase of property, preferring to take a wait-and-see approach before taking the plunge. This potentially has already happened, as sales of off-plan units did slowdown in January. If buyers are cautious, fewer sales will take place, putting pressure on an already challenging market. This, in turn, could lead to more softening of prices.

Questions for Discussion : : Please Do not copy and Paste and answer in Details

1-   Model the situation mentioned in the above scenario in the context of market equilibrium of Commercial property market given the introduction of VAT by the UAE government?  

2-   What impact do you anticipate on the demand of/supply for residential apartments from developer, seller and buyer point of view? Will there be excess demand/ excess supply eventually? Graphical illustration is required  

3- How the listed factors can influence (If any) the demand, supply and pricing of UAE commercial and residential property. Show your work through graphical illustrations  

National Corporation needs to set a target price for its newly designed product M14–M16. The following data relate to this new product.

These costs are based on a budgeted volume of 79,000 units produced and sold each year. National uses cost-plus pricing methods to set its target selling price. The markup percentage on total unit cost is 40%.

Compute the total variable cost per unit, total fixed cost per unit, and total cost per unit for M14–M16.

Compute the desired ROI per unit for M14–M16.

Compute the target selling price for M14–M16.

Compute variable cost per unit, fixed cost per unit, and total cost per unit assuming that 59,250 M14–M16s are produced and sold during the year.

Problem 9-4
Comparison of Depreciation Methods

Italian Construction Company purchased a new crane for $360,500 at the beginning of year 1. The crane has an estimated residual value of $35,000 and an estimated useful life of six years. The crane is expected to last 10,000 hours. It was used 1,800 hours in year 1; 2,000 hours in year 2; 2,500 hours in year 3; 1,500 hours in year 4; 1,200 hours in year 5; and 1,000 hours in year 6.

1. Compute the annual depreciation and carrying value for the new crane for each of the six years under each of the following methods. When calculating the rate for double-declining-balance, round the percentage to two decimal places, like 16.67% or 33.33%. Round your answers to the nearest whole dollar.

a. Straight-line:

b. Production:

c. Double-declining-balance:

2. If the crane is sold for $250,000 after year 3, what would be the amount of gain or loss under each method?

Problem 9-4
Comparison of Depreciation Methods

Italian Construction Company purchased a new crane for $360,500 at the beginning of year 1. The crane has an estimated residual value of $35,000 and an estimated useful life of six years. The crane is expected to last 10,000 hours. It was used 1,800 hours in year 1; 2,000 hours in year 2; 2,500 hours in year 3; 1,500 hours in year 4; 1,200 hours in year 5; and 1,000 hours in year 6.

1. Compute the annual depreciation and carrying value for the new crane for each of the six years under each of the following methods. When calculating the rate for double-declining-balance, round the percentage to two decimal places, like 16.67% or 33.33%. Round your answers to the nearest whole dollar.

a. Straight-line:

b. Production:

c. Double-declining-balance:

2. If the crane is sold for $250,000 after year 3, what would be the amount of gain or loss under each method?

Problem 18-10

On March 1, 2017, Sandhill Construction Company contracted to construct a factory building for Fabrik Manufacturing Inc. for a total contract price of $8,310,000. The building was completed by October 31, 2019. The annual contract costs incurred, estimated costs to complete the contract, and accumulated billings to Fabrik for 2017, 2018, and 2019 are given below:

(a) Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2017, 2018, and 2019. (Ignore income taxes.)

2017

Costs to date (12/31/17)    $________

Estimated Costs to Complete $________

Estimated Total Costs $________

Percent Complete ________%

Revenue Recognized $________

Costs Incurred $________

Profit/(Loss) Recognized in 2017 $________

2018

Costs to date (12/31/18) $________

Estimated Costs to Complete $________

Estimated Total Costs $________

Percent Complete ________%

Revenue Recognized in 2018 $________

Costs Incurred in 2018 $________

Profit/ (Loss) Recognized in 2018 $________

2019

_______________? $________

Total Revenue Recognized $________

Total Profit on Contract $________

Less: Profit Previously Recognized $________

Profit/(Loss) Recognized in 2019 $________

(b) Using the completed-contract method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2017, 2018, and 2019. (Ignore income taxes.)

2017 $________

2018 $________

2019 $________

Case Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2020, the general ledger for Case Inc. contains the following data.

Subsidiary data for Work in Process Inventory on June 1 are as follows.

During June, raw materials purchased on account were $4,700, and all wages were paid. Additional overhead costs consisted of depreciation on equipment $800 and miscellaneous costs of $300 incurred on account.

A summary of materials requisition slips and time tickets for June shows the following.

Overhead was charged to jobs at the same rate of $1.25 per dollar of direct labor cost. The patios for customers Rodgers, Stevens, and Linton were completed during June and sold for a total of $20,000. Each customer paid in full.

Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs. Prepare a cost of goods manufactured schedule for June.

Explain why a corporation's WACC would likely increase if it changes the capital structure?

2. The risk as measured in standard deviations of a particular security is 10 percent and the expected return on invested amount is 13. percent. What is the CV for this security? How would you explain this number?

nswer questions a, b, b, and 6 based on the following information from the financial statements of a rporation Total assets $2 billion det Total equity S? billion Total common equity so8 billioniky Cost of preferred stock 10 percent rde Cost of common stock 13 percentg Tax rate 40 percentT Pretax cost of debt 1o percent

a- Calculate the WACC for this corporation? 00.58. What is the capital structure of this corporation in proportions?

b waht is the capital structuer of this corportions in proporions?

c-How much debt this corporation has? Answer the amount of dollars and as a percentage of assets??