QUESTION 1 [Total = 15 marks]

James and Adrian are starting up their own small business, which involves the development and delivery of an online identity verification service, to which other businesses can sign up for a fee.

James has been working on developing the computer program and delivering the service with the support of friends for some time, with some success; having signed up a few businesses based in Brisbane and becoming a well-known figure in the local industry dealing with identity theft after invitations to speak on the topic at several workshops and conferences, trading under the name of IDSolutions. He has a registered business name and an ABN, but has not incorporated.

Adrian has experience in business and marketing and has proposed that they both invest $30,000 each into leasing some commercial space and engaging professional software developers to work with James, with a view to improving the computer program so as to expand its capacity to cope with a larger load as the business grows. Both James and Adrian are planning to give up other employment and work full time in the business. Apart from the computer equipment and premises leased, the assets of the business will likely consist of licence agreements with a number of businesses who have signed up for the service, James’ already- established program and the goodwill he has already built up (as well as any IP (intellectual property) they choose to register, such as trade marks).

Advise James and Adrian regarding the options they have in terms of the legal form their business can take, and any considerations they should take into account in making their choice.

The Stackpole Company retails two products, a standard and deluxe version of a luggage carrier.

The standard carrier sells for $28, has variable costs of $18, and direct fixed costs of $1,000,000. The deluxe model sells for $50, has variable costs of $30, and direct fixed costs of $1,000,000. The company has common fixed costs of $250,000. The anticipated sales mix for the company is 3:1 or 75/25. The actual level of sales units currently is 250,000 and your target income is $250,000. You expect sales to rise 10% in the coming year.

Directions:

You have been hired to build a CVP model to help the company understand the impact of business conditions on operating income. Your model should include breakeven in units with a pro forma income statement, units sales for a target income of $250,000 with a pro forma income statement, an income statement reflecting actual current sales, margin of safety in dollars and %, and degree of operating leverage. Your model should have the capability of computing B/E, target income, MOS, DOL, and predicting change in income based on a change in sales. Create a dashboard to show these variables.

Once you have built the model, use the model to determine changes to the dashboard variables. In a report to me, your CEO, show the original variables, the changed variables and explain why the change occurred.

1. Sales mix changes to 25/75
2. Common fixed costs increase by $100,000
3. Reduce VC of the standard carrier to $10 per unit

As a global manager, create a scenario for analysis using the three-sector model: Real Loanable Funds Market, Real Goods Market, and the Foreign Exchange Market for Question A. There is no “set” answer here. You are the manager doing the analysis and setting up the scenario. Use your own assumptions.

A. In the post-World War II period, the economies of Japan and Germany were rebuilt, and both economies were able to achieve economies of scale in the steel and automobile industries. In the mid-1990s, India and China built labor-intensive industries in the apparel industry, followed by other labor intensive industries expanded through an export-led growth policy on the part of China. Vietnam followed this type of policy beginning in 1986. The country has achieved stable growth, low inflation, and increasing prosperity. In the early 2000s, South Korea became a major producer of automobiles, and also expanded production in technology and related consumer goods for export. Currently, High Income economies (using the World Bank GNI per capita classification system) in North America, Europe, and the Far East (the Triad Area) engage extensively in trade in consumer goods. We find that the current level of global exports is about $19 trillion. The trade between nations of the Triad Area represents about $9.5 trillion. In the euro-zone, there is a division between stronger nations (Germany and France, for example) compared to other nations facing significant macroeconomic problems (Greece and Spain, for example).

Northwestern College is building a new science building. The initial costs are $10 million once every year for the next four years. The first cash outflow or expense is due one year from today and the last is due four years from today. The new science building will bring in an additional $3 million starting in Year 4 (i.e. four years from today). The additional revenue will grow at 1 percent per year for the next 20 years starting from Year 4. Assume the interest rate is 5 percent. (a) What is the correct interest rate to use for the initial costs (i.e. cash outflows)? Express your answer as a percentage rounded to two decimal places. (i.e. 6.538% would round to 6.54%) (3 points) (b) How many cash inflows are there in the NPV calculation? Express your answer as an integer. (2 points) (c) What is the present value of cash outflows of this project? Your answer should be expressed in the millions of dollars. DO NOT use a dollar sign, and keep three digits after the decimal point. (4 points) (d) What is the present value of cash inflows of this project? Your answer should be expressed in the millions of dollars. DO NOT use a dollar sign, and keep three digits after the decimal point. (4 points) (e) Should the new science building be built according to the NPV rule? Your answer should be either “Y” or “N” without the quotation mark. (2 points)

Sunny Valley Stables Inc. was established on April 1, 2017. The company provides stables, care for animals, and grounds for riding and showing horses. You have been hired as the new assistant financial controller. The following transactions for April 2017 are provided for your review.

1. Received contributions from five investors of $200,000 in cash ($40,000 each).
2. Built a barn for $142,000; paid half the amount in cash on April 1 and signed a three-year note payable for the balance.
3. Provided $15,260 in animal care services for customers, all on credit.
4. Rented stables to customers who cared for their own animals; received cash of $13,200.
5. Received from a customer $1,500 to board her horse in May, June, and July (record as Deferred Revenue).
6. Purchased hay and feed supplies on account for $3,210.
7. Paid $840 in cash for water utilities incurred in the month.
8. Paid $1,700 on accounts payable for previous purchases.
9. Received $1,000 from customers on accounts receivable.
10. Paid $4,000 in wages to employees who worked during the month.
11. At the end of the month, prepaid a two-year insurance policy for $3,600.
12. Received an electric utility bill for $1,200 for usage in April; bill will be paid next month.

Required:
1. & 2. Record in the T-accounts the effects of each transaction for Sunny Valley Stables in April, referencing each transaction in the accounts with the transaction letter. All accounts begin with zero balances. Show the unadjusted ending balances in the T-accounts.

3. Prepare an unadjusted trial balance as of April 30, 2017.

Case Study

You have been in your position as Head of Support Services in the Brussels for 4 months and have built a good understanding of the succession plan, key suppliers and contractors.

You are meeting with the UAE Ambassador when you notice a leak coming from the ceiling in the middle of his VIP majilis. To ensure minimal damage to the expensive carpet below, you quickly place a bucket under the leak and call Bjork, a handyman who helped you set up your own villa a few weeks before.

Bjork immediately responds and senses the urgency in your voice, and says he can be at the Embassy with his plumbers in one hour. He fixes the leak and hands you a bill for 5,000 Euros. Upon inspecting the bill, you see that the emergency response was 3,500 Euros alone.

This is outside your budget and, anticipating questioning from the Finance Committee at MOFAIC, you send the Committee a long email explaining this was an emergency and you were worried about the leak spreading and causing more damage to valuable assets in the Embassy.

The Finance Committee responds with questions as to why you didn’t follow normal protocol and get three quotes. They remind you that you have gone over your budget and you have only been there for 4 months.

Case Study Questions

1. What could you have done to avoid this expense?

2. How could you have better managed the relationship, communication and reaction with the Finance Committee?

Here we are going to test a couple of hypotheses about the Old Faithful data in R. Remember, this is the faithful data frame that is built in to R. You can use data(faithful) to load data set. First split faithful into two separate data frames: (1) those entries with eruption times less than 3 minutes (eruptions < 3) and (2) those entries with eruption times greater than or equal to 3 minutes (eruptions >= 3). Answer the following about the entry wait time (waiting):

(a) For the entries with short eruption times, you want to test the hypothesis that the associated waiting last on average less than 60 minutes. What is the null hypothesis? What is the alternative hypothesis? (Write your own code) (10 pt)

(b) Give R commands to compute the statistic that you used in (a) and the resulting p-value. What values did you get? Would you reject the null hypothesis at the α = 0.05 level? (15 pt)

(c) For the entries with long eruption times, you want to test the hypothesis that the associated waiting time last on average shorter than 80 minutes. What is the null hypothesis? What is the alternative hypothesis? (Write your own code) (10 pt)

(d) Give R commands to compute the statistic you used in (c) and the resulting p-value to test the hypothesis you came up with in part (c). What values did you get? Would you reject the null hypothesis at the α = 0.05 level? (15 pt)

/*
calculating area of a circle, calculating area of a rectangle, calculating area of a triangle, and quit.
*/

import java.util.Scanner;
public class GeoCalculator
{
  
public static void main(String arg[])
{

int geoCalc; //number selection of user
Scanner get = new Scanner(System.in);


//display section.
System.out.println("Geometry Calculator");
System.out.println("Please select from the following menu:");
System.out.println("1. Calculate the Area of a Cirlce.");
System.out.println("2. Calculate the Area of a Rectangle.");
System.out.println("3. Calculate the Area of a Triangle.");
System.out.println("4. QUIT");
System.out.println("Please make a selection: ");
geoCalc = get.nextInt();
  

//having the user's option
switch (geoCalc)
{
case '1':
System.out.println("Please enter the circle's radius: ");
double r = get.nextDouble();

double areac = 3.14159 * r * r;

System.out.println("Area of Circle is : " + areac);
break;


case'2':
System.out.println("Please enter the length: ");
double l = get.nextDouble();
System.out.println("Please enter the width: ");
double w = get.nextDouble();
  
double arear = l * w;
  
System.out.println("Area of Rectangle is: " + arear);
break;
  
  
case '3':
System.out.println("Please enter the base: ");
double b = get.nextDouble();
System.out.println("Please enter height: ");
double h = get.nextDouble();
  
double areat = b * h * 0.5;
  
System.out.println("Area of Triangle is: ");
break;
  
  
case '4':
System.out.println("QUIT");
break;
  
}
  
  
}   
  
}

I tried running my code and I input 1 but it gives me back 1 and says built successful. Need help on what I'm doing wrong. Thanks!

HYPOTHESIS TESTING SUMMARY ACTIVITY

Part 1: Overview of the Hypothesis Test for the Population Proportion Answer the following questions:

1) The general form of the test statistic for the hypothesis test for a population proportion is shown below. Label the different components of the test statistic.

2) For the following situations, state the null and alternative hypothesis. Then determine whether the alternative hypothesis is one-sided or two-sided.

a) A toy manufacturer claims that 23% of the 14-year-old residents of a certain city own a skateboard. A sample of fifty 14-year-olds shows that nine own a skateboard. Is there enough evidence to show that the percentage has changed?

b) At a large university, a study found that 25% of the students who commute travel more than 14 miles to campus. Recently, the university built more housing closer to campus so they believe that the proportion has decreased.

c) For students who first enrolled in two-year public institutions in fall 2007, the proportion who earned a bachelor’s degree within 6 years was 0.399. The president of Joliet Junior College believes that the proportion of students who enroll in her institution have a higher completion rate.

3) Use the information in question 2a (toy manufacturer) to answer the following questions.

a) Calculate the test statistic and draw a diagram with a normal curve to represent the sampling distribution of ??� in the context of this situation.

b) If the sample size of the survey was increased, would the test statistic increase or decrease? Would it give us more or less evidence against H0 ?

Obligation Debt Amount Min Monthly Amount Annual Interest Rate Student loans $40,000.00 $500.00 6.00% Car loan $11,500.00 $375.00 9.50% Chase credit card $2,100.00 $84.00 18.00% Amazon credit card $1,050.00 $42.00 15.00% TJ Maxx credit card $380.00 $15.00 24.00% You recently graduated with a reasonably well paying job and after reviewing your budget you have an extra $200 a month to put towards paying off your debts as you have built up an appropriate savings. In exactly 12 months, you have been promised a raise that will allow you to put a total of $400 a month towards paying down debts (original $200 plus another $200). How many months will it take to pay off the chase card if you pay the minimum monthly amount listed above on the Chase card? Hint: the first month the interest rate is 18%/12 = 1.5%. The interest owed is 1.5% of $2,100 = $31.50. So you will pay down your debt by $42-$31.50 = $10.50. This means you owe $2,100 - $10.50 = $2,089.50 the next month. (Use a spreadsheet!!). Your answer is between 90 and 100 months!! Use this technique later down below.Discuss two approaches a) paying the highest interest rate debts first or b) paying of the smallest first. Which is theoretically best and which is emotionally best for people. Do appropriate research and reference.