PA8-6 Preparing Operating Budgets for a Merchandising Firm [LO 8-5, 8-3a, f, g, h] Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Budgeted Unit Sales 36,000 56,000 28,000 56,000 Each T-shirt is expected to sell for $11. The purchasing manager buys the T-shirts for $4 each. The company needs to have enough T-shirts on hand at the end of each quarter to fill 21 percent of the next quarter’s sales demand. Selling and administrative expenses are budgeted at $72,000 per quarter plus 10 percent of total sales revenue. Required: 1. Determine budgeted sales revenue for each quarter. 2. Determine budgeted cost of merchandise purchased for each quarter. 3. Determine budgeted cost of good sold for each quarter. 4. Determine selling and administrative expenses for each quarter. 5. Complete the budgeted income statement for each quarter. rev: 10_28_2016_QC_CS-67902

1. A random sample of 2,500 students is taken from the population of all part-time students in the United States, for which the overall proportion of females is 0.6.

There is a 95% chance that the sample proportion (p̂) falls between ______ and _______.

2. The Federal Pell Grant Program provides need-based grants to low-income undergraduate and certain postbaccalaureate students to promote access to postsecondary education. According to the National Postsecondary Student Aid Study conducted by the U.S. Department of Education in 2008, the average Pell grant award for 2009-2010 was $2,450. Assume that the standard deviation in Pell grant awards was $520.

If we randomly sample 40 Pell grant recipients and record the mean Pell grant award for the sample, then repeat the sampling process many, many times, what is the mean and standard deviation of the sample means?

Round your answers to the nearest dollar. Do not include commas in your answer.

Mean:

Standard Deviation:

3. The annual salary of teachers in a certain state X has a mean of $54,000 and standard deviation of σ = $6000.

What is the probability that the mean annual salary of a random sample of 32 teachers from this state is less than $53,000?

Round your answer to four decimal places.

*There are numerous similar questions to this on here but I'm almost positive that they're incorrect so please someone answer this question differently and correctly. Thank you

According to the National Automobile Dealers Assoc., 75% of U.S. car dealers' profits comes from repairs and parts sold. However, many of the dealerships' service departments aren't open evenings or weekends. The percentage of dealerships opened during the evenings and weekends are as follows:

Time Dealerships are Open & Percentage of Dealerships

Weekends but not evenings 35.4

Evenings but not weekends 13.8

Both evenings and weekends 11.1

a. Are the listed times mutually exclusive?

b. What is the probability that a car dealership selected at random is not open in the evenings or on the weekends?

c. Suppose two car dealerships, say, Dealership A and Dealership B, are each selected at random from car dealerships in the United States. What is the probability that both are open in the evenings but not on the weekends, or that both are open on the weekends but not in the evenings?

d. For the two dealerships in part c, what is the probability that Dealership A is open in the evenings but not on the weekends, and Dealership B is open on the weekends but not in the evenings?

e. For the two dealerships in part c, what is the probability that one of them is open in the evenings but not on the weekends, and that the other is open on the weekends but not in the evenings?

3)    Which of the following questions can be answered based on a normal model?Explain. (You do not need to answer the questions, just determine if a normal model is appropriate.)
a)    According to the growth charts produced by the World Health Organization, one-month-old girls have a mean head circumference of 36.55cm and a standard deviation of 1.17 cm. In general, body measurements in a large population can be modeled by a normal curve.
In a study of health conditions in a county with a high poverty rate, researchers find that a random sample of 25 one-month-old girls have a mean head circumference of 36cm. Does this sample provide strong evidence that the mean head circumference for the population of one-month-old girls in this county is unusually small?
b)    According to the US Census Bureau 2014 Annual Social and Economic Supplement, the mean household income in the United States was $72,641. Previous studies suggest that the standard deviation is about $35,000. Income data is skewed strongly to the right.
We are interested in determining whether the mean household income is higher in our county. We randomly sample 25 households and determine that the mean income is $65,000. Does this sample provide strong evidence that the mean income is lower in our county?

3. Jim is a 60-year-old male in reasonably good health. He wants to take out a $75,000 term (that is, straight death benefit) life insurance policy until he is 65. The policy will expire on his 65th birthday. The probability of death in a given year is provided by the Vital Statistics Section of the Statistical Abstract of the United States (116^th edition)

Jim is applying to Big Rock Insurance Company for his term insurance policy.

1. What is the probability that Jim will die in his 60th year? Using this probability and the $75,000 death benefit, what is the expected cost to Big Rock Insurance?

2. Repeat part (a) for years 61, 62, 63, and 64. What would be the total expected cost to Big Rock Insurance over the years 60 through 64?

3. If Big Rock Insurance wants to make a profit of $850 above the expected total cost paid out for Jim’s death, how much should it charge for the policy?

4. If Big Rock Insurance Company charges $6500 for the policy, how much profit does the company expect to make?

5. The following table reports the price of a McDonald’s Big Mac for six different countries, with each price denominated in units of the local currency. The table also reports the current-market nominal exchange rate between the United States and the five remaining countries. Country U.S.A. Chile Hungary Czech Republic Brazil Canada Price $3.99 1,800 pesos 700 forints 65 korunas 8.1 real 4.0 C$ Current-market nominal exchange rate -- 552 pesos/$ 200 forints/$ 18.7 korunas/$ 2.2 real/$ 1.2 C$/$ 1 a. Compute the U.S. dollar nominal exchange rate that is implied by the theory of purchasing- power parity (PPP) for each country. Remember, the nominal exchange rate is expressed as units of foreign currency per U.S. dollar. b. For each country, compute the actual real exchange rate measured as the number of foreign Big Mac per U.S. Big Mac. c. According to PPP, what is the predicted nominal exchange rate between the koruna and the Canadian dollar (i.e., koruna per C$)? Based on the data given in the table, what is the actual current-market nominal exchange rate between these two currencies?

PA8-6 Preparing Operating Budgets for a Merchandising Firm [LO 8-5, 8-3a, f, g, h] Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Budgeted Unit Sales 46,000 72,000 36,000 72,000 Each T-shirt is expected to sell for $21. The purchasing manager buys the T-shirts for $8 each. The company needs to have enough T-shirts on hand at the end of each quarter to fill 31 percent of the next quarter’s sales demand. Selling and administrative expenses are budgeted at $92,000 per quarter plus 20 percent of total sales revenue. Required: 1. Determine budgeted sales revenue for each quarter. 2. Determine budgeted cost of merchandise purchased for each quarter. 3. Determine budgeted cost of good sold for each quarter. 4. Determine selling and administrative expenses for each quarter. 5. Complete the budgeted income statement for each quarter. rev: 10_28_2016_QC_CS-67902 ReferenceseBook

5. Which IS NOT a problem when firms pursue multi-domestic strategies?

a. Lessons from one market aren't applied in others

b. Product promotion ideas are not shared within the firm

c. Cultural differences are often overlooked

d. Firms fail to take advantage of their global size when negotiating with suppliers

6. International marketing strategies take advantage of economies of scale, marketing synergies, and political integration.

a. True

b. False

10. Soft currencies are currencies that attract little global demand.

a. True b. False

11. Which organization(s) has helped decrease tariffs?

a. GATT b. WTO c. GATT and WTO d. World Bank

12. In the United States, export tariffs are prohibited by the constitution.

a. True b. False

13. Which IS NOT a factor influencing a country's competitive advantage in an industry?

a. Balance of payments b. Elements of production c. Nature of domestic demand d. Presence of related industries

14. For domestic producers, a strong domestic currency provides the greatest protection.

a. True b. False

15. In the balance of payments, stock purchases are never considered direct investments.

a. True b. False

QUESTION:

Expensing of employee stock options (ESOs) is now a requirement in financial reporting both under U.S. GAAP and IFRS. However, management, especially in the United States, successfully resisted expensing for many years before the expensing rules were finally adopted. Even now, accounting for ESOs remain a controversial topic.

Required

    a. Evaluate the relevance and reliability of ESO expenses when calculated using the Black/Scholes formula or a similar model.

b. Researchers have observed that managers compensated by ESOs tend to release bad news prior to ESO grant dates and good news prior to ESO exercise dates. Discuss the incentives of managers to choose this timing for release of bad and good news.

c. One noteworthy feature about the fair value of an ESO is that its lowest value is zero when the price of the underlying stock is less than the exercise price. On the other hand, the value of an ESO can be very high when the price of the underlying stock is significantly higher than the exercise price.

                                                Discuss the effect of this asymmetric feature of ESOs on managers’ incentive to undertake risky projects. In other words, do these features lead to managers undertaking high-risk projects or low-risk projects?

1. Three major approaches to analyzing the economic impact of currency depreciation are (1) the elasticities approach, (2) the absorption approach, and (3) the monetary approach.

Which of the following accurately defines and distinguishes one of these approaches?

A. According to the elasticities approach, over the long run, depreciation merely raises the domestic price level.

B. According to the elasticities approach, currency depreciation leads to the greatest improvement in a country’s trade position when demand elasticities are high.

C. According to the absorption approach, over the long run, depreciation merely raises the domestic price level.

D. According to the monetary approach, a depreciation merely lowers the domestic price level.

2. Complete the following statement explaining the effect of complete currency pass-through on a nation whose currency depreciates.

Import and export prices in a nation’s currency will change __________ ( less than or more than or proportionately to) the currency depreciation.

3. An appreciation of the U.S. dollar tends to: ______