1.As a resident of the United States, if your nominal salary does not increase for three years, your real salary is likely to have declined. T or F.

2. The basket used to calculate the Consumer Price Index in the United States contains one unit of every good that is regularly purchased by the average urban consumer. T or F

3. The consumer price index has a value of 125 in the year 2002 and a value of 150 in the year 2010.

In this case, $500 in the year 2002 has the same purchasing power as how many dollars in the year 2010?

Round to the nearest whole number.

4. The price of gas in 1992 was $1.09 per gallon and in 2013 it was $3.51.

The price index in 1992 was 140 and in 2013 it was 233.

Based on this information:

The percentage change in the nominal price of gas was --- %. Enter a number rounded to two decimal places.

In real terms, the price of gas was cheaper in which year? --- Enter 1992 or 2013.

5. If the average wage paid to the worker was $20 in 2002 and $30 in 2012, then the average worker in the year 2012 must have been better off in terms of being able to purchase more goods and services. T or F

Bargains, Inc. manufactures and markets toys. Selected income statement data from 2010 and 2009 appear below:

Required:

Chapter 7

Develop a response in either Word or Excel and follow the instructions outlined in the Assignments Menu for submission.

On December 31, 2010, Palli Company finished consultation services and accepted in exchange a promissory note with a face value of $240,000, a due date of December 31, 2013, and a stated rate of 5%, with interest receivable at the end of each year. The fair value of the services is not readily determinable and the note is not readily marketable. Under the circumstances, the note is considered to have an appropriate imputed rate of interest of 10%.

         The following interest factors are provided:

                                                                                                    Interest Rate       

Table Factors for Three Periods                      5%                  10%

Future value of 1                                          1.15763             1.33100

Present value of 1                                          .86384               .75132

Future value of an ordinary annuity of 1 3.15250             3.31000

Present value of an ordinary annuity of 1 2.72325            2.48685

         REQUIRED

(a) Determine the present value of the note.

Prepare a Schedule of Note Discount Amortization using the effective interest method. (Round to whole dollars.)

Prepare the journal entry to record the acceptance of the note on December 31, 2010.

Prepare the journal entry to record the interest payment received on December 31, 2011

Sticky Wickets manufactures Cricket Bats. In May 2010 the budgeted sales and production were 19,000 bats and the standard cost card is as follows:
                                                                                                             Std Cost                                          Std Cost
Material (2kgs @ $5/kg)                                                                         10
Labour (3 hrs at $12/hr)                                                                         36
Overheads (3 hrs @ $1/hr)                                                                     3
Marginal Cost                                                                                                                                                  49
Selling Price                                                                                                                                                    68
Contribution                                                                                                                                                     19
Total fixed costs in the period were budgeted at $100,000 and were absorbed on the basis of labour hours worked.

In May 2010 the following results were achieved.

40,000kg of wood were bought at a cost of $196,000, this produced 19,200 cricket bats. No inventory of raw materials is held. The labour was paid for 62,000 hours and the total cost was $694,000. Labour worked for 61,500 hours.

Variable overheads in the period were $67,000.

The sales price was reduced to protect the sales levels. However, only 18,000 cricket bats were sold at an average price of $65.

Total fixed costs in May were $107,000.

Required : Calculate the sales, materials, labour, variable overheads, fixed overheads variances and any other appropriate variances in as much detail as possible.

The differences in Sanaol's balance sheet at December 31,2010 and 2009 are presented below:

Increase

(decrease)

Assets

Cash and cash equivalents 120,000

Available -for-sale securities 300,000

Inventory 80,000

Long-term Investments -100,000

Plant Asset 700,000

Accumulated Deprecation 0

TOTAL 1,100,000

Liabilities and Stockholders Equity

Accounts payable and accrued liabilities -5,000

Dividends payable 160,000

Short-term bank debt 325,000

Long-term debt 110,000

Common stock, 10 par 100,000

Additional paid-in capital 120,000

Retained earnings 290,000

TOTAL 1,100,000

The following information relates to 2010

*Net Income was 790,000

* Cash dividends of 500,000 were declared

* Building costing 600,000and having a carrying amount of 350,000was sold for 350,000

*Equipment costing 110,000 was acquired through issuance of long -term debt

*A long-term investment was sold for 135,000

There were no other transactions affecting long- term investments

* 10,000 shares of common stock were issued for 22 a share

In Sanaol's 2010 statement of cash flows . Net cash provided by financing activities was?

a.) 205,000

b.) 150,000

c.) 45,000

d.) 20,000

Calculate:

1) Covariance

2) Expected return on a portfolio XY

2) Risk on a portfolio XY

Weight of each asset is 50%.

Average annual return:

asset X: 11.74%

asset Y: 11.14%

Standard deviation:

asset X: 8.9

asset Y: 2.78

1)Annual high temperatures in a certain location have been tracked for several years. Let X represent the year and Y the high temperature. Based on the data shown below, calculate the regression line (each value to two decimal places).

y = _____________ x + ________________

2) Annual high temperatures in a certain location have been tracked for several years. Let X represent the year and Y the high temperature. Based on the data shown below, calculate the correlation coefficient (to three decimal places) between X and Y. Use your calculator!

r=

3)Recently a community college offered a 2-credit course to help students with math anxiety. At the beginning of the course, each student took a 30-question survey (called MARS-S); the higher the score, the more anxiety experienced by the student. The nine students remaining in the class took the same survey at the end of the course. The before and after scores for each of the nine students who completed the course are shown below.

Compute the correlation between before and after scores for these students. (Assume the correlation conditions have been satisfied and round your answer to the nearest 0.001.)

Suppose a study of n=269 students was conducted asking their weeknight study time. The mean response was 137 min. with an assumed KNOWN standard deviation of 65 min. The hypothesis of interest is whether the mean study time is GREATER than 120 min.

What is the value of the test statistic?

Note: Enter X.XX AT LEAST ONE DIGIT BEFORE THE DECIMAL, TWO AFTER and round up. Thus, 27 is entered as 27.00, 3.5 is entered as 3.50, 0.3750 is entered as 0.38

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Suppose a study of n=269 students was conducted asking their weeknight study time. The mean response was 137 min. with an assumed KNOWN standard deviation of 65 min. The hypothesis of interest is whether the mean study time is GREATER than 120 min.

What is CRITICAL VALUE at alpha=0.01??

Note: Enter X.XX AT LEAST ONE DIGIT BEFORE THE DECIMAL, TWO AFTER and round up. Thus, 27 is entered as 27.00, 3.5 is entered as 3.50, 0.3750 is entered as 0.38

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Suppose a study of n=269 students was conducted asking their weeknight study time. The mean response was 137 min. with an assumed KNOWN standard deviation of 65 min. The hypothesis of interest is whether the mean study time is GREATER than 120 min.

What is the decision with alpha=0.01?

Note: Enter 3 CAPITAL LETTERS:

REJ - Reject H0

FTR - Fail to Reject H0

CBD - Cannot Be Determined

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Suppose a study of n=269 students was conducted asking their weeknight study time. The mean response was 137 min. with an assumed KNOWN standard deviation of 65 min. The NEW hypothesis of interest is whether the mean study time NOT EQUAL TO 130 min.

What is the test statistic?

Note: Enter X.XX AT LEAST ONE DIGIT BEFORE THE DECIMAL, TWO AFTER and round up. Thus, 27 is entered as 27.00, 3.5 is entered as 3.50, 0.3750 is entered as 0.38

Do students reduce study time in classes where they achieve a higher midterm score? In a Journal of Economic Education article (Winter 2005), Gregory Krohn and Catherine O’Connor studied student effort and performance in a class over a semester. In an intermediate macroeconomics course, they found that “students respond to higher midterm scores by reducing the number of hours they subsequently allocate to studying for the course.” Suppose that a random sample of n = 8 students who performed well on the midterm exam was taken and weekly study times before and after the exam were compared. The resulting data are given in Table 11.5. Assume that the population of all possible paired differences is normally distributed.

95% CI for mean difference: (4.24889, 10.50111)

T-Test of mean difference = 0 (vs not = 0): T-Value = 5.58, P-Value = .0008

(a) Set up the null and alternative hypotheses to test whether there is a difference in the true mean study time before and after the midterm exam.

(b). Above we present the MINITAB output for the paired differences test. Use the output and critical values to test the hypotheses at the .10, .05, and .01 level of significance. Has the true mean study time changed? (Round your answer to 2 decimal places.)

(c) Use the p-value to test the hypotheses at the .10, .05, and .01 level of significance. How much evidence is there against the null hypothesis?