Imagine that you buy a new computer system with independent components including a new desktop computer (with a CPU and a graphics card), new software, and a new monitor. You want to play games on the new system, but it runs games very slowly. You assume that the keyboard and mouse are not creating the problem; so, to figure out what is making the system run so slowly, you experiment with combinations of your old equipment with the new equipment. Here are your experiments and results:

Experiment 1: New computer, new software, and new monitor — and it runs slowly.
Experiment 2: New computer, new software, and old monitor — and it runs slowly.
Experiment 3: New computer, old software, and new monitor — and it runs fast.
Experiment 4: New computer, old software, and old monitor — and it runs fast.
Experiment 5: Old computer, new software, and new monitor — and it runs fast.
Experiment 6: Old computer, new software, and old monitor — and it slowly.
Experiment 7: Old computer, old software, and new monitor — and it runs fast.
Experiment 8: Old computer, old software, and old monitor — and it runs fast.

Based on this data, which experiment shows that the conjunction of the new computer and the new software is NOT SUFFICIENT for the system to run slowly?

• A. Experiment 1
• B. Experiment 2
• C. Experiment 3
• D. Experiment 4
• E. Experiment 5
• F. Experiment 6
• G. Experiment 7
• H. Experiment 8
• I. None of these experiments

New Futuristics Company is thinking about marketing a new software product. Upfront costs to market and develop the product are $10 million. Starting in year 1, the product is expected to generate Free Cash Flows of $1.5 million per year for 15 years. The company will have to provide product support expected to cost $200,000 per year in perpetuity, which have not been included in the FCF just mentioned. Assume all cash flows (except for the upfront costs) occur at the end of each year. (a) What is the net present value (NPV) of this investment if the cost of capital is 5%? Should the firm undertake the project? (b) Repeat the analysis for discount rates of 1% and 15%. Should the company undertake the project in these two cases? (c) What is the payback period of the project? (Note: You only need to consider the upfront costs in this calculation) (d) How many IRRs does this investment opportunity have? (Hint: Plot the project NPV as a function of the discount rate, i.e. creating a graph which shows what the NPV is for a broad range of discount rates) (e) Can the IRR rule be used to evaluate this investment? Explain.

Wendell’s Donut Shoppe is investigating the purchase of a new $47,300 donut-making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of $6,300 per year. In addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 2,600 dozen more donuts each year. The company realizes a contribution margin of $1.50 per dozen donuts sold. The new machine would have a six-year useful life.

2. What discount factor should be used to compute the new machine’s internal rate of return? (Round your answer to 3 decimal places.)

A new chemical process has been developed for producing gasoline.  The company claims that this new process will increase the octane rating of the gasoline. Sixteen samples of the gasoline produced with the new process are selected at random and their octane reading were: 94, 93, 97, 92, 96, 94, 95, 91, 98, 95, 92, 91, 98, 95, 92, 91, 95, 96, 97, 93. If the mean octane using the existing process is 93, is the company's claim correct (use 1%)

1) In analyzing the data, what is the t score of the test statistic (study Result)?

2) If the decision rule is 2.53 ( the cut off on the chart) based on the information you gathered in the previous questions) would you reject the null?

Compare old and new money What are the general differences between old money and new money? What are the lifestyle differences between old money and new money? How can generational wealth transform a person’s way of life? How can wealth gained from personal achievement change a person’s outlook about money?

The Bruin's Den Outdoor Gear is considering a new 7-year project to produce a new tent line. The equipment necessary would cost $1.91 million and be depreciated using straight-line depreciation to a book value of zero. At the end of the project, the equipment can be sold for 10 percent of its initial cost. The company believes that it can sell 30,000 tents per year at a price of $77 and variable costs of $36 per tent. The fixed costs will be $525,000 per year. The project will require an initial investment in net working capital of $245,000 that will be recovered at the end of the project. The required rate of return is 12.7 percent and the tax rate is 40 percent. What is the NPV?

The Bruin's Den Outdoor Gear is considering a new 6-year project to produce a new tent line. The equipment necessary would cost $1.37 million and be depreciated using straight-line depreciation to a book value of zero. At the end of the project, the equipment can be sold for 15 percent of its initial cost. The company believes that it can sell 25,500 tents per year at a price of $68 and variable costs of $28 per tent. The fixed costs will be $435,000 per year. The project will require an initial investment in net working capital of $209,000 that will be recovered at the end of the project. The required rate of return is 11.1 percent and the tax rate is 40 percent. What is the NPV?

a) $660,397

b) $402,852

c) $463,633

d) $561,495

e) $968,299

Oxygen Optimization is considering buying a new purification system. The new system would be purchased today for 18,400 dollars. It would be depreciated straight-line to 1,000 dollars over 2 years. In 2 years, the system would be sold and the after-tax cash flow from capital spending in year 2 would be 1,900 dollars. The system is expected to reduce costs by 6,700 dollars in year 1 and by 14,800 dollars in year 2. If the tax rate is 50 percent and the cost of capital is 9.06 percent, what is the net present value of the new purification system project?

Investment Outlay Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $11 million, and production and sales will require an initial $5 million investment in net operating working capital. The company's tax rate is 40%. What is the initial investment outlay? Write out your answer completely. For example, 2 million should be entered as 2,000,000. $ The company spent and expensed $150,000 on research related to the new project last year. Would this change your answer? Rather than build a new manufacturing facility, the company plans to install the equipment in a building it owns but is not now using. The building could be sold for $1.5 million after taxes and real estate commissions. How would this affect your answer? The project's cost will .

A new method of HIV testing has been proposed based on a new quick detection procedure where saliva is examined. Suppose that the new method tests 867 persons and falsely categorizes 25 of the 176 HIV positive results. Assuming the current best standard of practice for saliva based quick detection HIV tests has a false positive rate of only 10%, determine if the efficacy of the two tests are significantly different. Write out your null and alternative hypotheses and interpret your results and use an alpha level of 0.05. Is a normal approximation appropriate? Why or why not?