A new CFO at Hanson Technologies is tasked with the responsibility of analyzing costs in an effort to reduce them in preparation for expansion into the global markets. Much of the cost cutting so far has been from finding lower cost suppliers for much of the materials, reducing machine maintenance schedules, and hiring contract labor to reduce benefits to longer term employees. The CFO has now been looking for additional cost cutting strategies and has identified warranty expense as one of the costs that needs to be cut. He is considering two proposals to do so. The first is to cut out warranties on their product altogether to reduce the warranty expense to zero. The other is to cut the estimated warranty liability percentage down to 25% of its current value. Discuss whether either of these options will work for this purpose. What are your thoughts on which, if either, option should be enacted? What would you do if you were the CFO in this case?

A new CFO at Hanson Technologies is tasked with the responsibility of analyzing costs in an effort to reduce them in preparation for expansion into the global markets. Much of the cost cutting so far has been from finding lower cost suppliers for much of the materials, reducing machine maintenance schedules, and hiring contract labor to reduce benefits to longer term employees. The CFO has now been looking for additional cost cutting strategies and has identified warranty expense as one of the costs that needs to be cut. He is considering two proposals to do so. The first is to cut out warranties on their product altogether to reduce the warranty expense to zero. The other is to cut the estimated warranty liability percentage down to 25% of its current value. Discuss whether either of these options will work for this purpose. What are your thoughts on which, if either, option should be enacted? What would you do if you were the CFO in this case?

Calculate the total effective hourly cost for a contractor who purchased a 115,000-lb, 385-hp gasoline-engine Power Shovel for $412,500. The machine has a set of tires that costs $12,000 and lasts for 5,000 hours. Salvage value is expected to be $44,000 at the end of its 7 years useful life. Major maintenance and repairs would accumulate annually at 70% of annual equipment depreciation cost. Tire repairs are 30% of tire depreciation. Annual percentage rate for Interest is 9%, while Insurance and Taxes is 6%. Equipment usage will average 2,400 hours per year. The cost of fuel is $3.25/gal and oil costs $9.30/gallon. Fuel consumption rate is 0.06 gallons per HP-hour, while oil consumption rate is 0.006 LB/HP-hour. Operating factor is 0.85; crankcase capacity is 8 gallons; and the number of hours between oil changes is 96 hours. Operators wage is $45/hr.

Esty Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were:

A total of 7,700 units were started and 6,600 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

The ending inventory was 70% complete with respect to materials and 10% complete with respect to conversion costs.

The total cost transferred from the first processing department to the next processing department during the month is closest to: (Round "Cost per equivalent unit" to 3 decimal places.)

Multiple Choice

• $265,600

• $253,300

• $316,098

• $245,441

The Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing $40 million and having a four-year expected life, after which the assets can be salvaged for $8 million. In addition, the division has $40 million in assets that are not depreciable. After four years, the division will have $40 million available from these nondepreciable assets. This means that the division has invested $80 million in assets with a salvage value of $48 million. Annual depreciation is $8 million. Annual operating cash flows are $27.5 million. In computing ROI, this division uses end-of-year asset values in the denominator. Depreciation is computed on a straight-line basis, recognizing the salvage values noted. Ignore taxes. Assume that all cash flows increase 10 percent at the end of each year. This has the following effect on the assets’ replacement cost and annual cash flows.

Depreciation is as follows.

Note that "accumulated" depreciation is 10 percent of the gross book value of depreciable assets after one year, 20 percent after two years, and so forth.

Required:

a. & b. Compute ROI using historical cost, net book value and gross book value.

c. & d. Compute ROI using current cost, net book value and gross book value.

• Req A and B
• Req C and D

Compute ROI using historical cost, net book value and gross book value. (Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1).)

• Compute ROI using current cost, net book value and gross book value. (Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1).)

  	Current Cost ROI Net Book Value Gross Book Value Year 1 % % Year 2 % % Year 3 % % Year 4 % %

Barcelona Machine Tools. Oriol​ D'ez Miguel​ S.R.L., a manufacturer of heavy duty machine tools near​ Barcelona, ships an order to a buyer in Jordan. The purchase price is

€422,000. Jordan imposes a 14% import duty on all products purchased from the European Union. The Jordanian importer then​ re-exports the product to a Saudi Arabian​ importer, but only after imposing its own resale fee of 28%.

Given the following spot exchange rates on April​ 11, 2010, what is the total cost to the Saudi Arabian importer in Saudi Arabian​ riyal, and what is the U.S. dollar equivalent of that​ price?  ​(Click on the

  icon to import the table into a​ spreadsheet.)

The spot​ rate, Saudi Arabian riyal per Jordanian dinar is SRI

__​/JD.

​(Round to five decimal​ places.)

Prepare a schedule showing the amortization of a $12,000 loan to be repaid in 10 end-of-year installments that include interest at a rate of 6%. Jared and Courtney Jill own a parcel of fertile farm land which a local farmer has offered to rent for a period of 10 years. He is willing to make a payment of $20,000 today or pay an ordinary annuity of $3,400 at the end of each of the next 10 years. Which payment method should Jared and Courtney accept if the appropriate rate of return is 9%? A group of five faculty members at a Midwest University have recently purchased several acres near the school. They plan to gravel it and rent the parking spaces to commuting students. The cost of the project is $100,000. They paid $25,000 cash and are financing the balance with a note at 7.0% annual interest to be paid off in five equal annual payments with the first payment to be made at the end of the first year. The rental receipts are to be placed in an account for future improvements and cannot be used to repay the loan. If the annual payments are shared equally, how much would each member need to contribute annually to pay off the loan?

We are learning quite a bit about market structures in this module week's summit session. Hopefully, you have had the opportunity to discuss market structures with your colleagues leading up to this activity. Now, let's dig a little deeper into market structures. In this activity, you will draft a document addressing the following topics:

1. Identify the differences between all four market structures in the short-run and long-run. This will be helpful as many of you may hold management positions and/or become entrepreneurs in the near future. When deciding what type of firm to own or operate, you may find that one market structure may be more advantageous over another based on short-run and long-run costs.  
2. Explain the significance that the average total cost (ATC) curve has on profit and loss based on each type of market structure. Explore how the ATC curve affects all four market structures and identify whether firms will earn a profit or loss based on the placement of the ATC curve and price.

Your answers must be supported by a minimum of two sources

The Faulk Corp. has a bond with a coupon rate of 7 percent outstanding. The Gonas Company has a bond with a coupon rate of 13 percent outstanding. Both bonds have 20 years to maturity, make semiannual payments, and have a YTM of 10 percent. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? (Do not round intermediate calculations. A negative answer should be indicated by a minus sign. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Percentage change in price of Faulk Corp. bond % Percentage change in price of Gonas Co. bond % What if rates suddenly fall by 2 percent instead? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Percentage change in price of Faulk Corp. bond % Percentage change in price of Gonas Co. bond %

1. Complete the problems below.

a. Find the critical value z a/2 that corresponds to 93% confidence level.

Z a/2 = _____

Q1 (ROUND TO 2 DECIMAL PLACES)

b.You plan to conduct a survey to estimate the percentage of people who eat breakfast. Find the number of people who must be surveyed if you want to be 93% confident that the sample percentage is within two percentage points of the true population percentage.

(USE YOUR ANSWER FROM PROBLEM #1a for critical values)

Assume that nothing is known about the percentage to be estimated. n=__________Q2

Assume that studies have shown that 34% of the people eat breakfast. n=___________Q3

c.

In a survey of 1002 people, 701 said they voted in a recent presidential election. Construct a 95% confidence interval for the proportion of people who said they voted in a recent presidential election.

(ROUND TO 3 DECIMAL PLACES)

Confidence Interval ( ___________________Q4 , ___________________Q5)