3) The Gross method of apportionment works as follows: Assign each state its lower quota. If k states remain to be assigned, then assign them to the k largest states.

a) Does the Gross method satisfy Quota rule?

b) Does the Gross method satisfy Population monotonicity?

Consider an electron confined to an infinite well of width 2ao (Bohr radius). Compare its energy in its three lowest energy states to the three lowest energy states of the Bohr model of the hydrogen atom. Repeat for a proton confined to a well of width 2x10-15 m (a nucleus).

Utah Enterprises is considering buying a vacant lot that sells for $1.8 million. If the property is purchased, the company's plan is to spend another $6 million today (t = 0) to build a hotel on the property. The after-tax cash flows from the hotel will depend critically on whether the state imposes a tourism tax in this year's legislative session. If the tax is imposed, the hotel is expected to produce after-tax cash inflows of $810,000 at the end of each of the next 15 years, versus $1,710,000 if the tax is not imposed. The project has a 14% cost of capital. Assume at the outset that the company does not have the option to delay the project. Use decision-tree analysis to answer the following questions. What is the project's expected NPV if the tax is imposed? Negative value, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the project's expected NPV if the tax is not imposed? Negative value, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to the nearest cent. $ Given that there is a 50% chance that the tax will be imposed, what is the project's expected NPV if the company proceed with it today? Negative value, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to the nearest cent. $ Although the company does not have an option to delay construction, it does have the option to abandon the project 1 year from now if the tax is imposed. If it abandons the project, it would sell the complete property 1 year from now at an expected price of $7.8 million. Once the project is abandoned, the company would no longer receive any cash inflows from it. If all cash flows are discounted at 14%, would the existence of this abandonment option affect the company's decision to proceed with the project today? Assume there is no option to abandon or delay the project but that the company has an option to purchase an adjacent property in 1 year at a price of $2 million. If the tourism tax is imposed, then the net present value of developing this property (as of t = 1) is only $300,000 (so it wouldn't make sense to purchase the property for $2 million). However, if the tax is not imposed, then the net present value of the future opportunities from developing the property would be $4 million (as of t = 1). Thus, under this scenario it would make sense to purchase the property for $2 million. Given that cash flows are discounted at 14% and that there's a 50-50 chance the tax will be imposed, how much would the company pay today for the option to purchase this property 1 year from now for $2 million? Negative value, if any, should be indicated by a minus sign. Do not round intermediate calculations Round your answer to the nearest cent. $

Siesta Manufacturing has asked you to evaluate a capital investment project. The project will require an initial investment of $88,000. The life of the investment is 7 years with a residual value of $4,000. If the project produces net annual cash inflows of $16,000, what is the accounting rate of return?

In what ways are the Payback Period and Accounting Rate of Return methods of capital budgeting alike?

ABC Company is adding a new product line that will require an investment of $1,500,000. The product line is estimated to generate cash inflows of $300,000 the first year, $250,000 the second year, and $200,000 each year thereafter for ten more years. What is the payback period?

Bonneville Manufacturing is considering an investment that would require an initial net investment of $650,000. The following annual revenues/expenses relate exclusively to the investment: Sales $350,000 -Variable expenses -$40,000 -Salaries expense -$28,000 -Rent expense -$20,000 -Depreciation expense -$40,000 Operating income $222,000 The investment will have a residual value of $50,000 at the end of its 15 year useful life. What is the payback period for this investment?

An annuity is best described as which of the following statements? A stream of interest payments on a principal amount invested, Another term used for future value, A stream of equal cash installments made at equal time intervals

Another term used for present value Concose Park Department is considering a new capital investment. The following information is available on the investment. The cost of the machine will be $330,000. The annual cost savings if the new machine is acquired will be $85,000. The machine will have a 5-year life, at which time the terminal disposal value is expected to be $32,000. Concose Park Department is assuming no tax consequences. If Concose Park Department has a required rate of return of 10%, what is the NPV of the project?

Norwood, Inc. is considering three different independent investment opportunities. The present value of future cash flows for each are as follows: Project A =$600,000, Project B = $550,000 & Project C = $500,000. The initial investment of each project is as follows: Project A =$320,000, Project B = $300,000 & Project C = $230,000. Use the Profitability index to determine what order should Norwood prioritize investment in the projects?

The discount rate that sets the present value of a project’s cash inflows equal to the present value of the project’s investment is called: NPV, ARR, IRR, payback period

Chris Tellson invested in a project with a payback period of 4 years. The project earns $30,000 cash each year for 8 years. Chris’s required minimum rate of return is 8%. How much did Chris initially invest?

The time value of money is considered in the following capital budgeting method(s)? Profitability Index. NPV, All answers given use the time value of $, IRR

As a health policy analyst for the governor of one of the states that did not expand Medicaid under the Affordable Care Act (ACA), you have been tasked with exploring whether now is a good time for your state to make a policy change. The governor has heard about the impact the Medicaid expansion has had in other states. Many of the uninsured in those states have been brought into coverage. Since the federal government is bearing the majority of the cost of the expansion, this change seems like a no-brainer. In fact, your boss read an article about a candidate for governor in Georgia who asked an audience on the campaign trail “Raise your hand if you would say no to someone who said, ‘Give me a dollar and I’ll give you $9 back’” (Goodnough, 2018, para. 3). Further, this is estimated to be costing states between $6 and $8 million per year. Your boss finds these arguments compelling, needs you to investigate the expansion option further, and has requested input before she makes her decision and a possible recommendation to the legislature. Do some research on the states that have not expanded Medicaid. Pick one to focus on and prepare a proposal for the governor that addresses the following questions:

1. What does the ACA say about the Medicaid expansion in states and how it needs to work? Who and what will the expansion cover?
2. From the experience of states that have expanded, what are the pros and cons of expansion? What are the relevant political, social, and economic concerns?
3. What’s the situation in the state you picked? Why has it not already expanded?
4. What are the political, social, and economic issues for your state that the governor needs to consider? Who will be covered? How much will it cost? Is the legislature likely to go along?
5. What is your recommendation to the governor? Is expansion in your selected state feasible or not?

Developing an Equation from Average Costs
Paradise Pub is a high-end dog hotel located in New York. Assume that in March, when dog-days occupancy was at an annual low of 500 days, the average cost per dog-day was $26. In July, when dog-days were at a capacity level of 4,500, the average cost per dog-day was $10.

(a) Develop an equation for monthly operating costs. (Let X = dog-days per month)
Total cost = $Answer

+ $Answer

* X

(b) Determine the average cost per dog-day at an annual volume of 28,000 dog-days. (Round to the nearest cent.)
$Answer

High-Low Cost Estimation
Assume the local YRC Worldwilde delivery service hub has the following information available about fleet miles and operating costs:

Use the high-low method to develop a cost-estimating equation for total annual operating costs. (Let X = annual fleet miles.)

Total annual costs = Answer

+ Answer * X

Automatic versus Manual Processing
Image Solutions operates a printing service for customers with digital cameras. The current service, which requires employees to download photos from customer cameras, has monthly operating costs of $7,000 plus $0.30 per photo printed. Management is evaluating the desirability of acquiring a machine that will allow customers to download and make prints without employee assistance. If the machine is acquired, the monthly fixed costs will increase to $13,000 and the variable costs of printing a photo will decline to $0.05 per photo.

(a) Determine the total costs of printing 20,000 and 50,000 photos per month.

(b) Determine the monthly volume at which the proposed process becomes preferable to the current process.
Answer units

Unit- and Batch-Level Cost Drivers
KC, a fast-food restaurant, serves fried chicken, fried fish, and french fries. The managers have estimated the costs of a batch of fried chicken for KC's all-you-can-eat Friday Fried Fiesta. Each batch must be 50 pieces. The chicken is precut by the chain headquarters and sent to the stores in 10-piece bags. Each bag costs $4. Preparing a batch of 50 pieces of chicken with KC's special coating takes one employee two hours. The current wage rate is $9 per hour. Another cost driver is the cost of putting fresh oil into the fryers. New oil, costing $6.50, is used for each batch.

Round answers to two decimal places, when applicable.

(a) Determine the cost of preparing one batch of 50 pieces.
$Answer

(b) If management projects that it will sell 150pieces of fried chicken, determine the total batch and unit costs.
Batch cost $Answer

Unit cost $Answer

(c) If management estimates the sales to be 350 pieces, determine the total costs.
$Answer

(d) How much will the batch costs increase if the government raises the minimum wage to $10 per hour?
$Answer

(e) If management decided to increase the number of pieces in a batch to 100, determine the cost of preparing 350 pieces. Assume that the batch would take twice as long to prepare, and management wants to replace the oil after 100 pieces are cooked.
$Answer

You run a hotel with 200 rooms. Fixed daily cost is $1500 which includes staff salary and property charges, maintenance cost of hospital is additional $300 daily. Variable cost per room is $15 which includes cleaning, utility cost etc. You charge $100 per room per day. You sold 50 rooms today, how much profit did you earn.

a) 2000, b) 3000, c) 2500, d) 2450

You run a hospital with 100 rooms. Fixed daily cost is $1000 which includes staff salary, property charges, maintenance etc. Variable cost per room is $10 which includes cleaning, equipment rentals, utility cost etc. You charge $50 per room per day. You sold 30 rooms today, how much revenue did you earn.

a) 1500, b) 500, c) 5000, d) 100

A vendor sells hotdogs at $15 /piece. For every hot dog he spends $12 in the raw material. Additionally, he spends $1 for packing each hotdog and monthly $50, $20, $10 as food truck rent, electricity and other expenses respectively. How much is the vendor contributing to covering his fixed costs or generating profits (contribution margin)?

a) 2, b) 5, c) 6, d) 3

US Hotelier and Chinese Insurer Contest Ownership of Starwood In March 2016, struggling US hotel group, Starwood Hotels and Resorts, owner of Weston and Sheraton Hotels, found itself in a bidding war. It had accepted an offer of $10.8bn (€8.1bn, £6.5bn) in cash and stock from US hotelier Marriott International the previous year. Whilst discussing the details of the acquisition, due to close in March 2016, Beijing-based Anbang Insurance Group made an unsolicited offer of $12.9bn. Marriott responded by increasing its offer to $13.6bn and Starwood investors eagerly awaited higher bids.

If Marriott succeeded it would create the world’s largest hotel company with 5500 owned or franchised hotels with 1.1 million rooms under 30 brands. Marriott believed it was a compelling bidder having demonstrated multi-year industry-leading growth, powerful brands and consistent return of capital to shareholders, with shares trading consistently above those of its peers. Having already conducted five months of extensive investigation and joint integration planning with Starwood, including careful analysis of the brand architecture, Marriott was confident it could make annual cost savings of $250m, generate greater long-term shareholder value from a larger global presence and offer wider choice of brands to consumers and improved economics to owners and franchisees.

Little known outside of China before 2013, Anbang Insurance Group originated as a small car insurer, before China’s move to give insurers greater freedom to invest their money. This allowed Anbang to sell investment products and other services, making them major players in real estate. A slowing Chinese economy and devaluing currency encouraged many domestic companies to invest overseas and Anbang then aggressively pursued overseas deals, largely fuelled by selling high yield investment products at home. Having spent $2bn on insurers in Belgium and South Korea, Anbang also made many large US acquisitions including the Waldorf Astoria for $1.95bn, the American insurer, Fidelity & Guaranty Life Insurance ($1.6bn) and the biggest-ever acquisition of American property assets by a mainland Chinese buyer, Strategic Hotels and Resorts ($6.5bn), owner of Four Seasons hotels, the Fairmont and Intercontinental hotels and the JW Marriott Essex House hotel. As a late bidder, Anbang had had little time for in-depth investigation of Starwoods but was making its bid in a consortium that included American private equity firm J.C. Flowers & Company. With close personal links to the Chinese Government, commentators believed Anbang could greatly increase Starwood’s cash reserves.

On 28 March, Anbang raised its bid to $14bn and analysts wondered whether Marriott would be able to raise its offer further as increasing the cash part of its offer could threaten its investment-grade rating and adding more stock would dilute its earnings per share. Marriott’s response was to say that its offer was not just about price. It also questioned whether Anbang had sufficient funds to close the deal and whether the Committee on Foreign Investment (Cfius), which reviews all deals for American companies that involve national security, would intervene as it had with the Waldorf sale, although this had been approved. Starwood properties could be deemed to be near government offices and military bases. This could delay the deal and possibly discourage Anbang’s bid. Commentators also wondered whether they had the skills to manage Starwood as the management team at its Belgian acquisition had left quickly amid complaints about Anbang’s management style.

Questions

1. How do the bidders’ acquisition motives differ?

2. What are the strategic and organisational fit implications of both bids?

(1) On August 1, 2018, We R Clean Company signed a 9-month contract with a hotel chain to provide pool and spa cleaning services for 3 hotel sites. The contract price of $14,850 was collected on the date the contract was signed. The services will be provided evenly over the next 9 months, starting on August 1. The adjusting entry on December 31, 2018 will

Credit Service Revenue for $6,600

Debit Earned Revenue for $6,600

Credit Service Revenue for 8,910

Debit Unearned Revenue for $8,250

(2) Collegiate Fitness Centers have 15,000 members whose monthly dues are $30 each. The company does not send individual bills to customers, who have until the 10th day of the month following the month of service to pay their monthly dues. On December 31, 2017, the company’s records show that 7,000 customers have already paid their December dues, and the payments were properly recorded. The adjusting entry to be recorded on December 31 will include