You have been hired by the Coca-Cola Company to determine if students at Oregon State University prefer Coke or Pepsi. A taste test was performed where students were given two identical cups and were asked to taste both drinks. They had to report which drink they prefer. It was found that 69 out of 125 students indicated they preferred cup that contained Coke.

1. (4 pts) What is the random variable in this problem? Does the random variable have a binomial distribution? Explain. (Recall, there are 4 checks for a discrete random variable to have a binomial distribution – make sure you list all 4. Discuss in detail if you think the “observations are independent of each other”.)

2. (1 pt) What does ?? represent in the context of this study?

3. (1 pt) Calculate the sample proportion, ??̂, of students in the sample prefer Coke. Show work.

4. Perform a hypothesis test to determine if OSU students prefer one brand over the other by answering the following questions:

a. (3 pts) State the null and alternative hypotheses in statistical notation. Define any notation used. (Hint: if there really is no preference, would be expect 50% to prefer Coke and 50% to prefer Pepsi?)

b. (3 pts) Report the p-value and state a conclusion in a complete sentence in the context of the problem.

c. (3 pts) Report a 95% confidence interval for the proportion of all OSU students who prefer Coke. Interpret this confidence interval in the context of the problem.

5. (2 pts) Do you believe it is legitimate to use the results of this hypothesis test and confidence interval to make a conclusion about all OSU students? Why or why not?

United Snack Company sells 60-pound bags of peanuts to university dormitories for $28 a bag. The fixed costs of this operation are $240,700, while the variable costs of peanuts are $0.19 per pound.

a. What is the break-even point in bags?
  

b. Calculate the profit or loss (EBIT) on 11,000 bags and on 24,000 bags.
  

c. What is the degree of operating leverage at 19,000 bags and at 24,000 bags? (Round your answers to 2 decimal places.)
  

d. If United Snack Company has an annual interest expense of $19,000, calculate the degree of financial leverage at both 19,000 and 24,000 bags. (Round your answers to 2 decimal places.)
  

e. What is the degree of combined leverage at both a sales level of 19,000 bags and 24,000 bags? (Round your answers to 2 decimal places.)
  

United Snack Company sells 40-pound bags of peanuts to university dormitories for $60 a bag. The fixed costs of this operation are $671,600, while the variable costs of peanuts are $0.35 per pound.

a. What is the break-even point in bags?
  

b. Calculate the profit or loss (EBIT) on 11,000 bags and on 24,000 bags.

c. What is the degree of operating leverage at 19,000 bags and at 24,000 bags? (Round your answers to 2 decimal places.)
  

d. If United Snack Company has an annual interest expense of $35,000, calculate the degree of financial leverage at both 19,000 and 24,000 bags. (Round your answers to 2 decimal places.)

e. What is the degree of combined leverage at both a sales level of 19,000 bags and 24,000 bags? (Round your answers to 2 decimal places.)

United Snack Company sells 40-pound bags of peanuts to university dormitories for $42 a bag. The fixed costs of this operation are $417,120, while the variable costs of peanuts are $0.26 per pound.

a. What is the break-even point in bags?
  

b. Calculate the profit or loss (EBIT) on 12,000 bags and on 25,000 bags.
  

c. What is the degree of operating leverage at 20,000 bags and at 25,000 bags? (Round your answers to 2 decimal places.)
  

d. If United Snack Company has an annual interest expense of $26,000, calculate the degree of financial leverage at both 20,000 and 25,000 bags. (Round your answers to 2 decimal places.)
  

e. What is the degree of combined leverage at both a sales level of 20,000 bags and 25,000 bags? (Round your answers to 2 decimal places.)
  

United Snack Company sells 60-pound bags of peanuts to university dormitories for $58 a bag. The fixed costs of this operation are $545,200, while the variable costs of peanuts are $0.34 per pound.

a. What is the break-even point in bags?

b. Calculate the profit or loss (EBIT) on 12,000 bags and on 25,000 bags.

c. What is the degree of operating leverage at 20,000 bags and at 25,000 bags? (Round your answers to 2 decimal places.)

d. If United Snack Company has an annual interest expense of $34,000, calculate the degree of financial leverage at both 20,000 and 25,000 bags. (Round your answers to 2 decimal places.)

e. What is the degree of combined leverage at both a sales level of 20,000 bags and 25,000 bags? (Round your answers to 2 decimal places.)

United Snack Company sells 60-pound bags of peanuts to university dormitories for $40 a bag. The fixed costs of this operation are $305,000, while the variable costs of peanuts are $0.25 per pound.

a. What is the break-even point in bags?
  

b. Calculate the profit or loss (EBIT) on 5,000 bags and on 18,000 bags.

c. What is the degree of operating leverage at 17,000 bags and at 22,000 bags? (Round your answers to 2 decimal places.)

d. If United Snack Company has an annual interest expense of $25,000, calculate the degree of financial leverage at both 17,000 and 22,000 bags. (Round your answers to 2 decimal places.)

e. What is the degree of combined leverage at both a sales level of 17,000 bags and 22,000 bags? (Round your answers to 2 decimal places.)

A company is evaluating the purchase of Machine A. The new machine would cost $120,000 and would be depreciated for tax purposes using the straight-line method over an estimated ten-year life to its expected salvage value of $20,000. The new machine would require an addition of $30,000 to working capital. In each year of Machine A’s life, the company would reduce its pre-tax costs by $40,000. The company has a 12% cost of capital and is in the 35% marginal tax bracket.

a.         Identify the incremental cash flows from investing in Machine A.

b.         Calculate the investment’s net present value (NPV).

c.         Calculate the investment’s internal rate of return (IRR).

This problem follows Problem #2. It is now five years later. The company did buy Machine A, but just this week Machine B came on the market; Machine B could be purchased to replace Machine A. If acquired, Machine B would cost $80,000 and would be depreciated for tax purposes using the straight-line method over an estimated five-year life to its expected salvage value of$20,000. Machine B would also require $30,000 of working capital but would save an additional $20,000 per year in pre-tax operating costs. Machine A’s salvage value remains $20,000, but it could be sold to-day for $40,000.

1. Identify the incremental cash flows from converting to Machine B
2. Calculate this investment’s net present value (NPV).
3. Calculate this investment’s internal rate of return (IRR).
4. Should the company convert to Machine B? Why or why not?

Reconciliation from IFRS to GAAP

You are the CFO for Mills company (reporting using IFRS) and must reconcile your financial statements for the years ending 2008, 2009, and 2010 to U.S. GAAP (The Income Statement and Statement Stockholders’ Equity). Youhave identified the following 5 areas where there are differences between IFRS and U.S. GAAP at various dates.  Be sure to consider the cumulative effects of prior year transactions for each year.

Intangible Assets

As part of a business combination in January 2004, the company acquired a brand for $15,000,000.  The brand is classified as an intangible asset with a 15 year useful life.  At year-end 2008, the brand is determined to have a selling price of $8,000,000 with zero cost to sell.  Expected future cash flows from continued use of the brand are $13,000,000 (undiscounted) and the present value of future cash flows is 9,000,000

Research and Development Costs

The company incurred research and development costs of $2,000,000 in 2008.  Of this amount, 70% related to development activities subsequent to the point at which criteria had been met that an intangible asset existed.  The development costs were completed at the end of 2008 and will be amortized over 10 years beginning 2009.

Property Plant and Equipment

On January 1, 2009 a building that had an original cost of $20,000,000 and (Purchase date January 1 2001) and was being depreciated over 20 years was determined to have a fair value of $15,000,000.   The company uses the revaluation model for such assets.

Sale Leaseback

On January 1, 2006 the company realized a gain on a sales leaseback of $6,000,000.  The term of the lease (starting the date of the sale) is 15 years.

The December 31, 20X8, balance sheets for Pint Corporation and its 70 percent-owned subsidiary Saloon Company contained the following summarized amounts:

Pint acquired the shares of Saloon Company on January 1, 20X7. On December 31, 20X8, assume Pint sold inventory to Saloon during 20X8 for $100,000 and Saloon sold inventory to Pint for $300,000. Pint’s balance sheet contains inventory items purchased from Saloon for $95,000. The items cost Saloon $55,000 to produce. In addition, Saloon’s inventory contains goods it purchased from Pint for $25,000 that Pint had produced for $15,000. Assume Saloon reported net income of $70,000 and dividends of $14,000.

Required:
a. Prepare all consolidation entries needed to complete a consolidated balance sheet worksheet as of December 31, 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)

Record the basic consolidation entry.

Record the entry to defer this year's unrealized profit on inventory transfers.

Activity description

A program must be carried out in MATLAB or OCTAVE that acquires and analyzes (continuously or online) the voice signal that is acquired from the sound card of the PC (microphone input) or a signal that is acquired with an acquisition card of data (ex. NI DAQCard).

The program must continuously perform the functions: signal acquisition, spectral analysis of the acquired signal, graphs in the time domain and graphs in the frequency domain (magnitude and phase spectrum).

The program should display the following graphs:

1) Original signal in the time domain

2) Original signal in the frequency domain (magnitude and phase)

Program 1: Initially do not acquire the signal from the PC sound card, instead create a synthetic signal in the MATLAB workspace, for example a signal composed of the sum of two or more sinusoids of different amplitude, frequency and phase . The signal must be visualized in time (oscillations) and the frequency analysis (magnitude spectrum) must show the presence of the original frequencies. It is important to assume a certain sampling frequency and a duration of the synthetic signal.

Program 2: After this works, start with a static version of the voice signal analyzer (ie the input signal is only a defined time window, for example three seconds), i.e. program 2 is an improved version of program version 1 where instead of a synthetic signal the signal that is acquired with the sound card is used in a time range of for example 3s. Note that this frequency is acquired at a certain sampling frequency. Finally, make the necessary adaptations and changes to the version 1 program so that it works online or continuously.

Questions to answer:
1) What is the analysis in the frequency domain of a signal? What differences exist with respect to time domain
2) What is the FFT?
3) What type of signals (continuous or discrete) are being used in the program? Explain your answer.
4) Explain what the frequency spectrum of a signal is (remember that the frequency spectrum is two graphs).
5) According to the project, generally what type of signals do we find in nature (continuous or discrete) and what type of signals do computer systems use (continuous or discrete)?