Problem 3 – Warwick rental property price Warwick is a suburb in the Southern Downs Region of Queensland. Warwick has a population of 12,223 people and 32.29% of its occupants live in rental accommodation. A real estate office claims that the average rental price in Warwick is less than $400 per week. To test if this belief is correct, a random sample of 96 rental properties is selected. The mean of the weekly rental price computed from the sample is $385. Assume that the population standard deviation of weekly rental price is $100.

a) You were recently hired as a junior data analyst working for the real estate office. Assist the office in performing a hypothesis test at a 3% level of significance to check whether the claim made is justified. Display the six steps process (involving drawing ​the rejection region/s and determining the critical value/s for the decision rule) in performing the test. ​

​ b) Calculate the p-value of the test above. Display working. State the decision rule of the test should you want to use the p-value method hypothesis testing. ​ ​

​ c) This hypothesis test is conducted on the basis that the sampling distribution of the sample mean is approximately normally distributed. Specify the required condition to ensure this. ​ ​ ​ d) Identify which one of these two types of error (Type I or Type II) you could make when drawing the conclusion in part a). Briefly explain your selection.

Case

In 1988, the total fabric wash sales were estimated to be 263,050 tonnes in Pakistan consisted of 247,000 tonnes of laundry soap, 14,500 tonnes of non-soap detergent (NSD) powders, and 750 tonnes of NSD bars. Lever Brothers’ Rin brand was the only NSD Bar in the Pakistan fabric wash market. The price of Rin was Rs 6 for the 250-gram pack. RIN was distributed through 315 distributors to 60,000 retail outlets in the country. This represented almost 100 percent coverage in retail outlets selling detergents. When RIN was launched in 1984, the distributors received a margin of 3 percent on the
retail selling price. The retailer margin was at 7 percent of the retail price. In 1988, excise and octroi taxes were together totalling to 5% of the retail selling price.
Production department transferred Rin at Rs. 3.6 per unit to marketing department. Marketing department has planned to spend 1 Mn. on selling plus transportation costs and about Rs. 3.5 Mn. on advertising expenses.

Question

a) What is the unit contribution? How many bars of RIN would be required to be sold in 1988 by Lever Brothers to break-even? How much sales in units Rin NSD bar is expected to make in 1988? What is the Gross Marketing Contribution? What is the Net Marketing Contribution?

Use the following information to answer questions 1-7

Consider a firm that daily rents machinery for the cost of $1000 and employs workers at the cost of $100 for a full day of work. The following table describes the production function of the firm. Fill the table such that you can make some production decisions for this firm.

1. At what approximate level of production is the marginal cost of production equal to the average total cost?

2. What would be the firm’s level of production if the price of the good was $60?

3. What would be the firm’s profits at equilibrium if the price of the good was $60?

4. What would be the price of the good if the firm is employing 8 workers at equilibrium?

5. What would be the profit of the firm if the firm is employing 8 workers at equilibrium?

6. What would be the price of the good if the firm is employing 9 workers at equilibrium?

7. What would be the profit of the firm if the firm is employing 9 workers at equilibrium?

You may need to use the appropriate technology to answer this question.

Consider the following data on price ($) and the overall score for six stereo headphones tested by a certain magazine. The overall score is based on sound quality and effectiveness of ambient noise reduction. Scores range from 0 (lowest) to 100 (highest).

(a)

The estimated regression equation for this data is

ŷ = 25.933 + 0.301x,

where x = price ($) and y = overall score. Does the t test indicate a significant relationship between price and the overall score? Use α = 0.05.

Find the value of the test statistic. (Round your answer to three decimal places.)

Find the p-value. (Round your answer to four decimal places.)

p-value =

(b)

Test for a significant relationship using the F test. Use α = 0.05.

Find the value of the test statistic. (Round your answer to two decimal places.)

Find the p-value. (Round your answer to three decimal places.)

p-value =  

(c)

Show the ANOVA table for these data. (Round your p-value to three decimal places and all other values to two decimal places.)

31. A Treasury bond paid $100 in interest income to an individual whose federal tax rate

      is 25% and whose state tax rate is 5%. What dollar amount of taxes is owed by this

      person?

32. Calculate the maximum price an investor should pay for a common stock assuming:

      last period’s dividend was $4, the growth rate is 5%, the required rate of return is

      9%.

33. A company postponed paying a preferred stock dividend this quarter. What dividend

      may be paid to common stockholders?

34. Suppose a zero-coupon bond is not owned within a tax-sheltered account. How often

      must earned income be reported for tax purposes?

35. The market price of a common stock is $75 but an investor estimates its value as $90.

      Calculate the net present value.

36. A corporation has taxable income of $100,000, its tax rate is 25%, and it paid a

      dividend of $25,000. There is no preferred stock financing. Calculate the increase in

      retained earnings.

37. A preferred stock pays a dividend of $4 per share. The market price of the preferred

      stock is $70. What value of k_p would cause NPV = 0?

38. When a company issues common stock does this imply a contractual obligation to

       pay dividends?

39. Consider a preferred stock whose market price is $20 and whose NPV = 0. What is

      the exact value of this preferred stock from the perspective of an investor?

The following events occurred in independent cases, but in each instance, the event happened after the close of the fiscal year under the audit but before the financial statements were authorised for the issue, which is also the audit report date. For each case, state what impact, if any, you would expect on the financial statements (and notes). The balance sheet in each instance is December 31, 2019.

Case1. On December 31, the commodities handled by the company had been traded on the open market for $1.40 per kilogram. this price had prevailed for two weeks, following an official market report that predicted vastly enlarged supplies; however, no purchases were made $1.40. The price throughout the preceding year, and several prior years, had been about $2. On January 18, 2020, the price returned to $2, following disclosure of an error in the official calculations of the prior December- correction of which destroyed the expectation of excessive supplies. Inventory at December 31, 2019, had been valued on a LCNRN (lower of cost and net realizable value) basis, using the prevailing price known at that time, $1.40.

Case 2. On February 1, 2020, the board of directors adopted a resolution accepting an investment banker’s offer to guarantee the marketing of $100 million of preferred shares.

Case3. On January 22, 2020, one of the auditee’s three major plants burned down, a $50 million loss that was covered to $40 million by insurance.

Situation: The Ipod Touch has been out for two years now and a lot of data has been collected.

Relevant Relationship:

There is a functional relationship between Price of an IPod Touch,pp and Weekly Demand,ss.

Below is a table of data that have been collected

A.. Find the linear model that best fits this data using regression and enter the model below

(for entry round the linear parameter value to nearest 0.01 and constant parameter to nearest 1)

s=T(p)=s=T(p)=    

B. The squared correlation coefficient r2r2 was Select an answer below above  0.95

(note: values less than 0.95 MAY mean the model is not appropriate for making predictions)

Now answer these two questions using the UNROUNDED model parameters

C. What does the model predict will be the weekly demand if the price of an ipod touch is $177 ?  (nearest 100)

D. According to the model at what should the price be set in order to have a weekly demand of 193,900 ipod Touches? $ (nearest $1)

Note: In the "real" world Apple sold about 20 million Ipod Touch's from Sept. 2007-Sept. 2009 Answer