Instructions:

Individual Work

Each person of the group is required to do the problems on paper with a pencil.   You WILL NOT receive any points on the group take home score if you do not show that you did the work or do not submit the answer before your group meeting. You are required to take a picture of your work and submit your work in Blackboard BEFORE your group meets.

Group Work

Your group will meet in person or on Zoom and determine who has the right answer and what answer you will submit. Please note that often each student has a section of the problem correct but not the entire problem correct.

Your group will prepare your group answer in Excel with proper format. This is the answer that will be graded. All members of the group that have submitted Individual Work will receive the same group grade.

One member of each group will submit the Excel sheet as a PDF in Blackboard. Please review your PDF file for formatting before you submit it.

Your PDF file should be as follows:

Page One: Group Member names, Date, Time, and Location

Page Two: Depreciation, Goodwill, and Impairment Loss

Depreciation, Goodwill, and Impairment Loss

At the beginning of 2020, Brady Inc. acquired Lincoln Technology Corporation for $600 million. In addition to cash, receivables, and inventory, the following assets and their fair values were also acquired:

The plant and equipment are depreciated over a 10-year useful life on a straight-line basis. There is no estimated residual value. The patent is estimated to have a 5-year useful life, no residual value, and is amortized using the straight-line method.

At the end of 2022, a change in business climate indicated to management that the assets of Lincoln might be impaired. The following amounts have been determined:

Required:

1. Compute the book value of the plant and equipment and patent at the end of 2022.
2. When should the plant and equipment and the patent be tested for impairment?
3. When should goodwill be tested for impairment?
4. Determine the amount of any impairment loss to be recorded, if any, for the three assets.

Assume the Fed has established a 10% required reserve ratio for checkable deposits. The Fed does not require banks to hold reserves for savings deposits. Further, assume that The First Idaho Bank is a primary dealer, which means that it is able to buy and sell securities directly to the U.S. Federal Reserve (Fed). Remember any bank in the U.S. can borrow from the Fed.

Provided below is the balance sheet for The First Bank of Idaho:

What happens to the amount of loans The First Bank of Idaho can create after the Fed buys securities? What will happen to the size of the money supply if The First Bank of Idaho makes additional loans? Please explain your answers.

They can use their excess reserves of $80,000 to issue new loans. They will also have an $800,000 increase in their money supply.

The Use of Discount Policy: Bank Borrowing or Not Borrowing from the Fed

Go back to the original balance sheet. Suppose The First Bank of Idaho borrows $25,000 from the Fed. Show the effect of that transaction on The First Bank of Idaho’s balance sheet.

What happens to excess reserves at The First Bank of Idaho after the discount loan? Please explain your answer.

What happens to the amount of loans The First Bank of Idaho can create after the discount loan? What happens to the size of the money supply? Please explain your answers.

Rate on Reserves (This use of the Interest Rate on Reserves (IOR) is not a change in the required reserve ratio)

Go back to the original balance sheet. Congress approved a new tool for the Fed, the interest on reserves, before the Great Recession. Originally, the Fed was scheduled to begin using the new tool in 2010. However, when the Financial Crisis began in 2007, Congress allowed the Fed to use the tool in 2008. This tool allows the Fed to pay interest on reserves held at the Fed (so it doesn’t apply to reserves held as vault cash). The interest rate the Fed pays on required reserves is called the Interest Rate on Required Reserves (IORR); the interest rate the Fed pays on excess reserves is called the Interest Rate on Excess Reserves (IOER). We will assume the two interest rates are equal, we will call the joint interest rate on reserves, the Interest Rate on Reserves (IOR).

If the interest rate on reserves increases, will The First Bank of Idaho be more- or less-likely to hold excess reserves? What will happen to the amount of loans The First Bank of Idaho will make if the interest rate on reserves increases? What will happen to the money supply? Please explain your answers.

No Growth Incorporated had operating income before interest and taxes in 2011 of $250 million. The firm was expected to generate this level of operating income indefinitely. The firm had depreciation expense of $12 million that same year. Capital spending totaled $15 million during 2011. At the end of 2010 and 2011, working capital totaled $60 and $70 million, respectively. The firm’s combined marginal state, local, and federal tax rate was 40% and its debt outstanding had a market value of $1.5 billion. The 10-year Treasury bond rate is 5.5% and the borrowing rate for companies exhibiting levels of creditworthiness similar to No Growth is 8%. The historical risk premium for stocks over the risk free rate of return is 5.2%. No Growth’s beta was estimated to be 1.2. The firm had 2,500,000 common shares outstanding at the end of 2011. No Growth’s target debt to total capital ratio is 35%.

a- Estimate free cash flow to the firm in 2011.

b- Estimate the firm’s cost of capital.

c- Estimate the value of the firm (i.e., includes the value of equity and debt) at the end of 2011, assuming that it will generate the value of free cash flow estimated in (a) indefinitely.

d- Estimate the value of the equity of the firm at the end of 2011.

e- Estimate the value per share at the end of 2011.

Acme Limo has a client who will sign a lease for a limousine. Consider a $100,000 limousine that will last for four years and can be depreciated on a three-year MACRS schedule. Assume that lease rates for old and new limousine are the same and that Acme Limo Inc’s pretax administrative costs are $10,000 per limousine per year (these costs will occur at the beginning of the year). The cost of capital is 9% and the tax rate is 21%. The limousine is expected to be sold for $15,000 at the end of 4 years. The Lease payments are made in advance, that is, at the start of each year. The inflation rate is zero. What is the break-even operating lease rate for the limousine?

Use the following table for depreciation-MACRS Rates for three year asset--Half-Year Convention

Please choose all correct answers. However if you choose a wrong answer, then each incorrect answer will reduce the score by 10%.

Question number 12

A manager wishes to see if the time (in minutes) it takes for their workers to complete a certain task is faster if they are wearing ear buds.   A random sample of 20 workers' times were collected before and after wearing ear buds. Test the claim that the time to complete the task will be faster, i.e. meaning has production increased, at a significance level of α = 0.01

For the context of this problem, μ_D = μ_before−μ_after where the first data set represents before ear buds and the second data set represents the after ear buds. Assume the population is normally distributed. The hypotheses are:

H₀: μ_D = 0
H₁: μ_D > 0

You obtain the following sample data:

a) Find the p-value. Round answer to 4 decimal places.

Answer:

b) Choose the correct decision and summary.

A manager wishes to see if the time (in minutes) it takes for their workers to complete a certain task will change when they are allowed to wear ear buds at work. A random sample of 25 workers' times were collected before and after. Test the claim that the time to complete the task has changed at a significance level of α=0.10. For the context of this problem, μd=μafter−μbefore where the first data set represents after and the second data set represents before. Assume the population is normally distributed. Round answers to 4 decimal places.

Ho:μd=0
Ha:μd≠0

You obtain the following sample of data:

What is the critical value for this test?  
critical value = ± ________________

What is the test statistic for this sample?  
test statistic = __________________

The test statistic is: in the critical region or not in the critical region

This test statistic leads to a decision to?

Reject the claim

Fail to reject the null

Accept the null

reject the null

Accept the claim

As such, the final conclusion is that...

__There is sufficient evidence to warrant rejection of the claim that the time to complete the task has changed.

__There is not sufficient sample evidence to support the claim that the time to complete the task has changed.

__The sample data support the claim that the time to complete the task has changed.

__There is not sufficient evidence to warrant rejection of the claim that the time to complete the task has changed.

Lead Time in a Doctor's Office

Marcus Simmons caught the flu and needed to see the doctor. Simmons called to set up an appointment and was told to come in at 1:00 P.M. Simmons arrived at the doctor's office promptly at 1:00 P.M. The waiting room had 5 other people in it. Patients were admitted from the waiting room in FIFO (first-in, first-out) order at a rate of 5 minutes per patient. After waiting until his turn, a nurse finally invited Simmons to an examining room. Once in the examining room, Simmons waited another 5 minutes before a nurse arrived to take some basic readings (temperature, blood pressure). The nurse needed 10 minutes to collect this clinical information. After the nurse left, Simmons waited 30 additional minutes before the doctor arrived. The doctor diagnosed the flu and provided a prescription for antibiotics, which took 5 minutes. Before leaving the doctor's office, Simmons waited 10 minutes at the business office to pay for the office visit.

Simmons spent 5 minutes walking next door to fill the prescription at the pharmacy. There were four people in front of Simmons, each person requiring 5 minutes to fill and purchase a prescription. Simmons arrived home 15 minutes after paying for his prescription.

a. What time does Simmons arrive home?
3:10 p.m.

b. How much of the total elapsed time from 1:00 P.M. until when Simmons arrived home was non-value-added time?

c. What is the value-added ratio? Round your percent to one decimal place.
%

d. Which of the following statement is correct?
All of the above.

Marcus Simmons caught the flu and needed to see the doctor. Simmons called to set up an appointment and was told to come in at 1:00 P.M. Simmons arrived at the doctor's office promptly at 1:00 P.M. The waiting room had 5 other people in it. Patients were admitted from the waiting room in FIFO (first-in, first-out) order at a rate of 5 minutes per patient. After waiting until his turn, a nurse finally invited Simmons to an examining room. Once in the examining room, Simmons waited another 5 minutes before a nurse arrived to take some basic readings (temperature, blood pressure). The nurse needed 10 minutes to collect this clinical information. After the nurse left, Simmons waited 30 additional minutes before the doctor arrived. The doctor diagnosed the flu and provided a prescription for antibiotics, which took 5 minutes. Before leaving the doctor's office, Simmons waited 10 minutes at the business office to pay for the office visit.

Simmons spent 5 minutes walking next door to fill the prescription at the pharmacy. There were four people in front of Simmons, each person requiring 5 minutes to fill and purchase a prescription. Simmons arrived home 15 minutes after paying for his prescription.

a. What time does Simmons arrive home?
3:10 p.m.

b. How much of the total elapsed time from 1:00 P.M. until when Simmons arrived home was non-value-added time?

c. What is the value-added ratio? Round your percent to one decimal place.
%

d. Which of the following statement is correct?
All of the above.

1-Please complete the below python programs. Use spaces for indentations since the website does not take tabs.

#inputs to the function are 2 numbers x and y. Print "Sum 6!" if the sum of x and y is bigger or equal to 6. Print "Sum too small!" otherwise.

def sum_6(x,y):

#your answer here, can be multiple lines

___

#input to the function is a list of integers. The function will calculate and return a resultlist with the square of each number in the input list saved in it. For example: if mylist has numbers 1,2,3,4,5, the returned value should be a list with 1,4,9,16,25.

def square_num (mylist):

#your answer here, can be multiple lines

___

#in this main function, create a list with 6 numbers, call the second function in this question, print out the returned result.

def main ():

#your answer here, can be multiple lines

___

2-Write down the regular expression that can match: a string with 1 or more digits followed by exactly 2 small case letters. Sample string: 5678yr. (You do not need to consider the " ")

(same as the below question) Make sure you only write down the regex. Please do NOT include other things like / / around it. You do not need to consider any blanks before or after the regex, nor sentence starting/ending symbols.

Answer:

3-Write down the regular expression that can match: a float with 1 or more digits before the decimal point and exactly 2 digits after. Sample: 2345.34

(same as the below question) Make sure you only write down the regex. Please do NOT include other things like / / around it. You do not need to consider any blanks before or after the regex, nor sentence starting/ending symbols.

Answer: