The index of industrial production ( t IP ) is a monthly time series that measures the quantity of industrial commodities produced in a given month. Suppose that an analyst has data on this index for the United States. The analyst begins by computing Y subscript t = 1200 X ln IP subscript t / IP subscript t-1 , which gives the monthly percentage change in IP measured in percentage points at an annual rate. The analyst estimates an AR(4) model for industrial production growth and then augments that model with four lagged values of ?Rt , where Rt is the interest rate on three-month U.S. Treasury bills (measured in percentage points at an annual rate). All regressions are estimated over the sample period 1960:1 through 2000:12 (that is, January 1960 through December 2000). (a) The Granger causality F statistic on the four lags of ?Rt is 2.35. Do interest rates help to predict IP growth? Explain your answer. 2 (b) The analyst also regresses ?Rt on a constant, four lags of ?Rt , and four lags of IP growth. The resulting Granger causality F statistic on the four lags of IP growth is 2.87. Does IP growth help to predict interest rates? Explain your answer.
In: Economics
12.
In a sample of Starbucks customers it was found that the number of individual items bought per month at Starbucks was 15 with a standard deviation of 17. Assume the data to be approximately bell-shaped. Approximately 95% of the time, the number of monthly items purchased was between two values A and B. What is the value of B? Write only a number as your answer.
13.
A study studied the birth weights of 1,729 babies born in the United States. The mean weight was 3234 grams with a standard deviation of 871 grams. Assume that birth weight data are approximately bell-shaped. Estimate the number of newborns who weighed between 1492 grams and 4976 grams. Write only a number as your answer. Round your answer to the nearest whole number.
14.
For a certain type of truck, the mean number of miles per gallon is 23.5 and the standard deviation is 4.3 . Assume gas mileage for this type of truck to be approximately bell-shaped. Compute the z-score for a truck whose gas mileage is 14 .
Write only a number as your answer. Round your answer to two decimal places (for example: 3.15).
15.
A population has mean 26 and standard deviation 8 . What is the data value that has a z-score of 1 ? Write only a number as your answer.
In: Statistics and Probability
Problem 6-20 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements; Explanation of Difference in Net Operating Income [LO6-1, LO6-2, LO6-3]
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:
| Beginning inventory | 0 | |
| Units produced | 44,000 | |
| Units sold | 39,000 | |
| Selling price per unit | $ | 81 |
| Selling and administrative expenses: | ||
| Variable per unit | $ | 4 |
| Fixed (per month) | $ | 561,000 |
| Manufacturing costs: | ||
| Direct materials cost per unit | $ | 15 |
| Direct labor cost per unit | $ | 9 |
| Variable manufacturing overhead cost per unit | $ | 3 |
| Fixed manufacturing overhead cost (per month) | $ | 748,000 |
Management is anxious to assess the profitability of the new camp cot during the month of May.
Required:
1. Assume that the company uses absorption costing.
a. Calculate the unit product cost.
b. Prepare an income statement for May.
2. Assume that the company uses variable costing.
a. Calculate the unit product cost.
b. Prepare a contribution format income statement for May.
In: Accounting
Consider a collection of abandoned buildings near the waterfront of an established Midwestern city in the United States. Under what economic and market conditions might this collection of buildings be an investment opportunity?
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Declining Population locally, but positive national economic outlook (stock prices and mild inflation). |
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Increasing Population and Positive Economic Indicators (growing employment, etc.), and the potential to repurpose the buildings into a new use. |
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Low or negative price inflation in the local real estate market, but income growth in the national economy. |
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All of the above. |
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None of the above. |
Some observers claim that high-speed internet connections will constitute a “Death of Distance” and drive a change in real estate markets between urban areas and more isolated locations. Which of the following best explains how this idea is (and will continue to) impact real estate markets?
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This will lead to increased supply (and reduced price) in cities, and decreased supply (and increased prices) for areas further from cities. |
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This will lead to reduced supply (and increased price) in cities, and increased supply (and reduced prices) for areas further from cities. |
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This will lead to increased demand (and price) in cities, and reduced demand (and prices) for areas further from cities. |
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This will lead to reduced demand (and price) in cities, and increased demand (and prices) for areas further from cities. |
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None of the above. |
In: Economics
Genetics: What if the future held the ability to take a test and learn what you would be when you grew up? Many propose that genetics could provide that information in the future. This has intrigued many doctors, trainers and coaches in the world of athletics. If a genetic test could indicate performance or offer ways to analyze potential issues with player safety it could guide young individuals, promote success and have a large financial payoff. Currently, the National Collegiate Athletic Association (NCAA), the governing body of college sports in the United States, has started to screen athletes for sickle cell trait. This mandatory genetic test is performed on athletes that could show complications of the disease when undergoing extensive bouts of extreme exercise.
Explain why you think genetic analysis should or should not be used to screen athletes for health conditions.
What could be a benefit and a disadvantage to having this type of genetic analysis performed at an early age?
Identify a sport and what traits could impact the potential success a person may have as an athlete in the sport.
With the increasing availability of direct-to-customer and over-the-counter genetic kits, how would you educate the non-expert about reliability and potential results obtained from such tests?
In: Nursing
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:
| Beginning inventory | 0 | |
| Units produced | 50,000 | |
| Units sold | 45,000 | |
| Selling price per unit | $ | 80 |
| Selling and administrative expenses: | ||
| Variable per unit | $ | 3 |
| Fixed (per month) | $ | 568,000 |
| Manufacturing costs: | ||
| Direct materials cost per unit | $ | 17 |
| Direct labor cost per unit | $ | 7 |
| Variable manufacturing overhead cost per unit | $ | 2 |
| Fixed manufacturing overhead cost (per month) | $ | 950,000 |
Management is anxious to assess the profitability of the new camp cot during the month of May. Assume the company uses absorption costing.
Determine the unit product cost.
|
Prepare an income statement for May.
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Determine the unit product cost. Assume that the company uses variable costing.
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Prepare a contribution format income statement for May. Assume that the company uses variable costing.
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In: Accounting
Grab a blank sheet of paper and try some inflation analysis on your own. Take a picture or scan your sheet, and upload it after you are finished. This contributes to your participation grade in the class.
In: Economics
Ocean Cruiseline offers nightly dinner cruises departing from several cities on the East Coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for
$50
per passenger.
Ocean
Cruiseline's variable cost of providing the dinner is
$20
per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is
$210,000
per month. The company's relevant range extends to
18,000
monthly passengers. The breakeven sales are
7,000
tickets sold.a. Compute the operating leverage factor when
Ocean
Cruiseline sells
8,750
dinner cruises. b. If volume increases by
10%,
by what percentage will operating income increase? c. If volume decreases by
6%,
by what percentage will operating income decrease?
a. Compute the operating leverage factor when
Ocean
Cruiseline sells
8,750
dinner cruises. (Round your answer to one decimal place.)
First, identify the formula, then compute the operating leverage factor.
|
÷ |
= |
Operating leverage factor |
|
÷ |
= |
b. If volume increases by
10%,
by what percentage will operating income increase? (Round the percentage to the nearest whole percent.)
|
The percentage that operating income will increase is |
%. |
c. If volume decreases by
6%,
by what percentage will operating income decrease? (Round the percentage to the nearest whole percent.)
|
The percentage that operating income will decrease is |
%. |
In: Accounting
Full answer needed with Excel formulas
Lockheed, one of the largest defense contractors in the United States, reported EBITDA of $1,290 million in a recent financial year, prior to interest expenses of $215 million and depreciation charges of $400 million. Capital expenditures amounted to $450 million during the year, and working capital was 7% of revenues (which were $13,500 million). The firm had debt outstanding of $3,068 billion (in book value terms), trading at a market value $3.2 billion, and yielding a pretax interest rate of 8%. There were 62 million shares outstanding, trading at $64 per share, and the most recent beta is 1.10. The tax rate for the firm is 40%. (The treasury bond rate is 7%.) The firm expects revenues, earnings, capital expenditures, and depreciation to grow at 9.5% a year for the next five years, after which the growth rate is expected to drop to 4%. (Even though this is unrealistic, you can assume that capital spending will offset deprecation in the stable-growth period.) The company also plans to lower its debt/equity ratio to 50% for the steady state (which will result in the pretax interest rate dropping to 7.5%.)
A. Estimate the value of the firm
B. Estimate the value of the equity in the firm and the value per share.
* risk premium 5.5% and the tax rate is 40%
In: Finance
You must label each answer with the number of question. Each question must have at least three sentence answers. There is no maximum sentence, use as many as you wish to thoroughly answer the question. All answers must be complete sentences using proper grammar and spelling.
Sarah paid $50,000 for a franchise that covers the entire United States. She intended to sell individual franchises for the each state. Naturally, investors considering buying a franchise from her asked to see the financial statements of the business.
Believing the true value of the franchise to be $500,000. She gives the franchise to Cindy. She borrow $500,000 from the bank. She pays $500,000 to the corporation for all of the stock. The corporation then uses the $500,000 to buy the franchise from Cindy. Cindy then pays the bank loan off with the $500,000.
In the final analysis, Cindy is debt-free and out of the picture. Sarah owns all the corporation’s stock, and the corporation owns the franchise. The corporation’s balance sheet lists a franchise acquired at a cost of $500,000. This balance sheet is the most valuable marketing tool.
Requirements
Was this an ethical or unethical situation? Explain your reason.
Who can be harmed? Explain your reason.
How can they be harmed? Explain your reason.
What role does accounting play?
In: Accounting