Sales-Value-at-Split-off Method

Alomar Company manufactures four products from a joint production process: barlon, selene, plicene, and corsol. The joint costs for one batch are as follows:

Direct materials $67,900

Direct labor 34,00

Overhead 25,500

At the split-off point, a batch yields 1,400 barlon, 2,600 selene, 2,500 plicene, and 3,500 corsol. All products are sold at the split-off point: barlon sells for $15 per unit, selene sells for $20 per unit, plicene sells for $26 per unit, and corsol sells for $35 per unit. Carry out all percent calculations to four significant digits.

Production is weighted as below.

BARLON 1.0

SELENE 2.0

PLICENE 1.5

CORSOL 2.5

allocate the joint costs using the weighted average method and allocate the joint costs using the sales-value-at-split-off method.

Mole fraction to percent by mass. Convert 0.1538 mole fraction of propanol (C₃H₈O) in water to percent by mass of propanol in the solution. (Some of the calculations from the previous question can speed up the process here.) Answer to 4 significant figures with appropriate units.

Parts per million to molarity. The daily intake of iron is 18 mg for an adult. This dose dissolved as Fe²⁺ ions in 1 liter of water makes an 18 ppm Fe²⁺solution. Convert 18 ppm Fe²⁺ to molarity. Assume the aqueous solution is dilute enough to use the shortcut and the solution density is essentially

equal to water (1.0 g/mL). Answer to 2 significant figures with appropriate units.

Molality to percent by mass. Convert the molality of a 2.35 mol/kg RbNO₃(aq) solution to percent by mass. (Hint: begin by separating the 2.35 mol RbNO₃ and the 1 kg water.) Answer to 3 significant figures with appropriate units.

Question 9.

A. Marble Paving Ltd. has a debt equity ratio of 1.5. The cost of debt is 8% and the cost of unlevered equity is 14%. Calculate the weighted average cost of capital for the firm if the tax rate is 33%. Briefly summarise the advantages of using the WACC to evaluate a project. [5 marks]

B. Suppose Shee SuperSteel Products conducts a study and concludes that if SSP significantly expanded its consumer products division (which is less risky than its core business of industrial/commercial products), the firm’s beta will decline from 1.4 to 1.0. However consumer products are more competitive and have a lower profit margin, which would cause the expected growth in overall company earnings to fall from 8.5% to 6.5%. The dividend recently paid was $2.40 per share. The rate of market return is estimated at 12.5% and the risk free rate is 6.5%. Should the consumer products division be expanded?

16 males with high triglyceride level were given oat bran cereal as part of diet for two weeks, and corn flakes cereal as part of diet for another two weeks. (15 points)

(1)   To test if oat bran cereal significantly lowers triglyceride level, which tests, one-sample t-test, two-dependent samples t-test or two-independent samples t-test should we use?

(2)   What would be the null hypothesis in this study?

(3)   What would be the alternate hypothesis?

(4)   The t-statistics in this study is 3.6. What the conclusion would be if the significant level is set as 0.05? (df=15, t_1-(0.05/2)=1.75)

(5) What is the connection between hypothesis testing approach and confidence interval approach?

Question 2

You plan to invest part of your savings and are examining the following data:

(a) If only Portfolio D is correctly priced, are stocks A, B and C correctly priced? If not, what investment action would you recommend for each stock to take advantage of the price anomaly?

(b) Company X has just paid a dividend of $0.20 per share. The company expects dividends to grow at 5% per annum for the foreseeable future. It is trading at $10 in the market. You feel that, given the risk of this company, your required return on this stock is 8%. Is the market assigning a lower or higher risk to this stock compared to its fair value? Appraise this observation in relation to the SML
.

Assume that stock market returns have the market index as a common factor, and that all stocks in the economy have a beta of 1.6 on the market index. Firm-specific returns all have a standard deviation of 20%. Suppose that an analyst studies 20 stocks and finds that one-half of them have an alpha of +2.4%, and the other half have an alpha of −2.4%. Suppose the analyst invests $1.0 million in an equally weighted portfolio of the positive alpha stocks, and shorts $1 million of an equally weighted portfolio of the negative alpha stocks.

a. What is the expected profit (in dollars) and standard deviation of the analyst’s profit? (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)

b. How does your answer change if the analyst examines 40 stocks instead of 20 stocks? 100 stocks? (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)

<<Using R code>>
Set seed nuumber as 12345" every time you generate random numbers. For each anser,
use # to explain if necessary.

3. Use data "thusen" in ibrary ISwR"
3-1) Remove missing observations in the data, name this set as thu1, and print the first 6
and last 6 observations.
3-2) Rename a variable "short.velocity" -> "x", "blood.glucose" -> "y".
3-3) Draw a scatter plot for "y" by "x", give title "velocity vs.glucose". Put tick marks of x-axis
at x=1.0, 1.25, 1.5, 1.75, 2.0.
3-4) Calculate the mean if x and y, and put a big red "#" on this point of the graph in 3-3). Use
only one statement.
3-5) Draw a vertical blue thick dashed line at mean value of x.
3-6) Put "mean of x" at the mean value of x, at 5 lines outside the graph window.

A local bank claims that the waiting time for its customers to be served is the lowest in the area. A competitor bank checks the waiting times at both banks. The sample statistics are listed below. Test the local bank's claim. Use the information given below. Use the significant level of .05 and assume the variances are equal.

1. Are the samples dependent or independent?

2. State your Null/Alternative hypotheses

3. What is the test-statistic?

4. What is the p-value?

5. What are the critical values?

6. Does the test-statistic lie in the rejection region?

7. Interpret the result?

8. Does the result change for a different value of alpha? Explain?

Complete the model and state the cash balance required to balance the balance sheet in Year 1.