Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in the figure to calculate the payoff and the profit/loss for investments in each of the following July 2017 expiration options on a single share, assuming that the stock price on the expiration date is $72. (Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated by a minus sign. Round "Profit/Loss" to 2 decimal places.)

Figure 15.1:

A group of students estimated the length of one minute without reference to a watch or​ clock, and the times​ (seconds) are listed below. Use a 0.10 significance level to test the claim that these times are from a population with a mean equal to 60 seconds. Does it appear that students are reasonably good at estimating one​ minute?

What are the null and alternative​ hypotheses?

Determine the test statistic. Round to two decimal places.

Determine the P-value. Round to three decimal places.

State the final conclusion that addresses the original claim.

______ H0. There is ______ evidence to conclude that the original claim that the mean of the population of estimated is 60 seconds _______ correct. It ________ that as a group the students are reasonably good at estimating one minute.

Health insurers are beginning to offer telemedicine services online that replace the common office visit. Wellpoint provides a video service that allows subscribers to connect with a physician online and receive prescribed treatments. Wellpoint claims that users of its LiveHealth Online service saved a significant amount of money on a typical visit. The data shown below ($), for a sample of 20 online doctor visits, are consistent with the savings per visit reported by Wellpoint.

Assuming the population is roughly symmetric, construct a 95% confidence interval for the mean savings for a televisit to the doctor as opposed to an office visit (to 2 decimals).

95% confidence interval: $ to $ per visit

Your company is considering a capital investment of ​$212.469 million. The project will generate equal annual​ after-tax operating cash flows of ​$36.79 million for 7 years. At the end of its​ life, the project will be sold for ​$37 ​million, but the​ project's adjusted tax basis at termination will be ​$31 million. The project will require ​$16 million in additonal net working capital. With a 27​% marginal tax​ rate, what is the​ project's IRR? ​ (Percent with​ 1decimal)

At the end of the year, a company offered to buy 4,580 units of a product from X Company for $11.00 each instead of the company's regular price of $19.00 each. The following income statement is for the 60,000 units of the product that X Company has already made and sold to its regular customers:

For the year, fixed cost of goods sold were $128,400, and fixed selling and administrative costs were $62,400. The special order product has some unique features that will require additional material costs of $0.77 per unit and the rental of special equipment for $3,000.

4. Profit on the special order would be

5. The marketing manager thinks that if X Company accepts the special order, regular customers will be lost unless the selling price for them is reduced by $0.14. The effect of reducing the selling price will be to decrease firm profits by

Rock Solid Bank and Trust (RSB&T) offers only checking accounts. Customers can write checks and use a network of automated teller machines. RSB&T earns revenue by investing the money deposited; currently, it averages 6.10 percent annually on its investments of those deposits. To compete with larger banks, RSB&T pays depositors 0.50 percent on all deposits. A recent study classified the bank’s annual operating costs into four activities.

Data on two representative customers follow.

Required:

a. Compute RSB&T's operating profits.

b. Compute the profit from Customer A and Customer B, assuming that customer costs are based only on deposits. Interest costs = 0.50 percent of deposits; operating costs are 4 percent (= $28,500,000/$712,500,000) of deposits.

c. Compute the profit from Customer A and Customer B, assuming that customer costs are computed using the information in the activity-based costing analysis.

Required A

Operating profit ??

Required B

Profit per customer

Customer A ??

Customer B ??

Required C

Customer A Customer B

Sales revenue ?? ??

Interest on deposit ?? ??

Total operating cost ?? ??

Customer profit / loss

5. Fancy Fish, a fine dining upscale restaurant in Northridge, California and 2016 Open Table Diners’ Choice award winner, is enjoying its eighteenth season of providing delectable food, exceptional service, and beautiful outdoor dining experiences. “Saturday - Half-off Bottled Wine Night” has made Fancy Fish one of the San Fernando Valley’s favorite restaurants. Every Saturday night, guests can enjoy half-off every bottle of wine on the wine list while dining in the restaurant or on the terrace. The owner began offering “Saturday - Half-off Bottled Wine Night” in 2010 as an incentive for guests to dine at Fancy Fish when the economy was in a recession. Now that the economy is booming, the owner is considering whether the promotion should be continued, or even expanded. One concern is the effect that the promotion is having on the overall revenue generated from sales to the participants.

A random sample of 28 checks was collected over the course of one month of Saturday nights. Fourteen checks were from customers participating in the half-off promotion, and the other 14 checks were from customers not participating. The total revenue from each check (less alcohol, tax, and tip) is presented below. Do these data present sufficient evidence that the checks of participants is significantly different from checks of non-participants? What is your recommendation to the owner regarding the status of the promotion?

With Wine Discount W/O Wine Discount

35 46

35 44

36 29

36 29

48 29

29 60

36 64

43 47

24 47

13 49

36 53

50 51

22 44

32 36

11. Given the table below, what is the profit maximizing output for the producer in the short‑run?

Output - Total revenue - Total cost

           1                    2.00                                     1.00

           2                    4.00                                     1.50

           3                    6.00                                     2.50

           4                    8.00                                     4.50

           5                   10.00                                    7.00

     a. 1 unit

     b. 2 units

     c. 4 units

     d. 5 units

12. A competitive firm can incur losses but continue to operate in the short‑run if it at least able to cover its:

     a. total costs

     b. fixed costs

     c. variable costs

     d. average total costs

13. Shannon the sorghum farmer is one of 5,000 perfectly competitive farmers raising sorghum in the United States. After attending classes at Krannert Business School, Shannon decides to charge $6.00/bushel for her    crop, rather than the $5.00/bushel she is currently   receiving. If she produces 500 bushels, what will her total revenue be:

     a. $3000

     b. $2500

     c. $2000

     d. $0

14. A firm should shut down in the short run if:

     a. price is greater than average variable costs

     b. average fixed costs are greater than marginal revenue

     c. price is less than average variable costs

     d. total costs are greater than fixed costs

15. Mr. T's Golden Necklace Company faces the following costs:

               Quantity             Total Cost

                  1                   $120

                  2                    230

                  3                    330

                  4                    460

                  5                    600

Assuming Mr. T is a price‑taker, and the market price is $130 per necklace, how many necklaces should Mr. T. produce?

     a. 2

     b. 3

     c. 4

     d. 5

A company currently pays a dividend of $3 per share (D0 = $3). It is estimated that the company's dividend will grow at a rate of 20% per year for the next 2 years, and then at a constant rate of 6% thereafter. The company's stock has a beta of 1.5, the risk-free rate is 9.5%, and the market risk premium is 6.5%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.