The company sells an industrial line of products that are all subject to a 3-year warranty. Prior experience has resulted in an average warranty cost of 3% of revenue for its products. The company had an accrued warranty liability of $500,000 at December 2018. During January of 2019, product sales were $6 million, and the actual warranty costs incurred were $145,000.

a. Prepare journal entries to record product sales (assume all credit sales), the warranty accrual, and actual warranty costs incurred in January of 2019.

b. Show a T-account with for the transactions in the Estimated Warranty Liability account for January, with the correct ending balance for this liability.

Project A is as follows: $100,000 upfront cost and annual cash flows of $25,000 a year for seven years. Project B is as follows: $100,000 upfront cost and cash flow of $20,000 per year for 8 years. what are the payback periods for projects A and B?

John Smith previously earned £ 10,000 a year in employment and had £ 100,000 invested in government securities, yielding 10% per annum. He sold his securities for £ 100,000 and started his own business. Initially, he rented a factory for £ 5000 per annum, but subsequently purchased it for £ 20,000, leaving £ 80,000 as the financial capital within the firm. John Smith’s accountants estimate that total revenue of the firm in the past year was £ 100,000 and total costs were £ 80,000, including a salary of £ 5000 paid to John Smith.

Estimate the profit of this firm from the viewpoint of (i) The accountant (ii) The economist, explaining clearly the reason for any difference. [15 marks]

In a particular year, 68% of online courses taught at a system of community colleges were taught by full-time faculty. To test if 68% also represents a particular state's percent for full-time faculty teaching the online classes, a particular community college from that state was randomly selected for comparison. In that same year, 33 of the 44 online courses at this particular community college were taught by full-time faculty. Conduct a hypothesis test at the 5% level to determine if 68% represents the state in question.

Note: If you are using a Student's t-distribution for the problem, you may assume that the underlying population is normally distributed. (In general, you must first prove that assumption, though.)
1. State the distribution to use for the test. (Round your standard deviation to four decimal places.)
P' ~

2. What is the test statistic? (Round your answer to two decimal places.)

3. What is the p-value? (Round your answer to four decimal places.)

4. Alpha:

5. Construct a 95% confidence interval for the true proportion. Sketch the graph of the situation. Label the point estimate and the lower and upper bounds of the confidence interval. (Round your answers to four decimal places.)

The following information pertains to the City of Williamson for 2017, its first year of legal existence. For convenience, assume that all transactions are for the general fund, which has three separate functions: general government, public safety, and health and sanitation.

Compensated absences (such as vacations and sick days) legally owed to general government workers at year-end total $13,000. These amounts will not be taken by the employees until so late in 2018 that the payment is not viewed as requiring 2017 current financial resources.

The city received a piece of art this year as a donation. It is valued at $14,000. It will be used for general government purposes. There are no eligibility requirements. The city chose not to capitalize this property.

The general government uses the storage shed that was acquired this year. It is being depreciated over 10 years using the straight-line method with no salvage value. The city uses the equipment for health and sanitation and depreciates it using the straight-line method over five years with no salvage value.

The investments are valued at $103,000 at the end of the year.

For the equipment that has been ordered but not yet received, the City Council (the highest decision-making body in the government) has voted to honor the commitment when the equipment is received.

1. b-1. Prepare a statement of revenues, expenditures, and other changes in fund balances for the general fund as of December 31, 2017. Assume that the city applies the consumption method.

The mean number of sick days an employee takes per year is believed to be about 10. Members of a personnel department do not believe this figure. They randomly survey 8 employees. The number of sick days they took for the past year are as follows: 11; 6; 13; 3; 11; 9; 8; 10. Let X = the number of sick days they took for the past year. Should the personnel team believe that the mean number is about 10? Conduct a hypothesis test at the 5% level.

Note: If you are using a Student's t-distribution for the problem, you may assume that the underlying population is normally distributed. (In general, you must first prove that assumption, though.)

1. State the distribution to use for the test. (Enter your answer in the form z or t_df where df is the degrees of freedom.)

2. What is the test statistic? (If using the z distribution round your answers to two decimal places, and if using the t distribution round your answers to three decimal places.)

3. What is the p-value? (Round your answer to four decimal places.)

Explain what the p-value means for this problem. If

H₀ is true, then there is a chance equal to the p-value that the average number of sick days for employees is at least as different from 10 as the mean of the sample is different from 10.If

H₀ is false, then there is a chance equal to the p-value that the average number of sick days for employees is at least as different from 10 as the mean of the sample is different from 10.    If

H₀ is false, then there is a chance equal to the p-value the average number of sick days for employees is not at least as different from 10 as the mean of the sample is different from 10.If

H₀ is true, then there is a chance equal to the p-value the average number of sick days for employees is not at least as different from 10 as the mean of the sample is different from 10.

4. Construct a 95% confidence interval for the true mean. Sketch the graph of the situation. Label the point estimate and the lower and upper bounds of the confidence interval. (Round your answers to three decimal places.)

If Company XYZ plans to launch a new production line, and in year 1, will have sales revenue       

             $10,000,000, operating cost is 70% of the sales revenue, depreciation is $2,000,000, and tax rate    

              is 40%, what is the Company’s projected cash flow in year 1?

       b. If the Company’s launch of the new production line will cause the exit of an existing production line     

         that can generate $1,000,000 operating income before tax, how much will be the Company’s  

        projected cash flow in year 1, if we take this opportunity cost or cannibalization into the consideration?            

c. If the tax rate fell to 30%, what will be the project’s cash flow?

A standardized​ exam's scores are normally distributed. In a recent​ year, the mean test score was 21.4 and the standard deviation was 5.4. The test scores of four students selected at random are 15​, 22​, 9​, and 36. Find the​ z-scores that correspond to each value and determine whether any of the values are unusual.

The z-score for 15 is:

For the fiscal year that ended on September 30, 2017 the U.S. federal deficit was $666 billion, an increase of $80 billion from 2016. This was the second consecutive year the deficit has increased, following several years of decline. (The deficit was over $1 trillion in 2012 and had fallen to $438 billion in 2015, but the current deficit is more than $500 billion higher than the $161 billion deficit in 2007, the year the Great Recession began.) The Congressional Budget Office projects a slight decrease in the federal deficit to $581 billion for 2018, but predicts a widening of the deficit to almost $1.5 trillion by 2027 if current laws do not change.

In 2017, the deficit as a percentage of GDP was 3.5 percent, federal government spending was approximately $4 trillion (up more than 30 percent from 2008), while tax revenues were $3.3 trillion. Presently, the national debt stands at more than $20.6 trillion (104% of GDP), which equates to a debt of more than $63,000 per citizen and over $170,000 per taxpayer. You can view the national debt clock at: US Debt Clock.

Discuss the economic consequences of a rapidly increasing federal deficit and national debt. Should we be concerned about the sizes (and estimated future sizes) of the federal deficit and national debt, or are the concerns overblown? Who exactly do we owe this money to? How might the government reduce the deficit and debt numbers? The above questions are just a few relating to the federal deficit and national debt. Please do not feel limited by addressing just these questions, but feel free to expand your discussion to the wide variety of issues stemming from the growing federal deficit and national debt.

Herman Co. is considering a four-year project that will require an initial investment of $15,000. The base-case cash flows for this project are projected to be $14,000 per year. The best-case cash flows are projected to be $26,000 per year, and the worst-case cash flows are projected to be –$4,500 per year. The company’s analysts have estimated that there is a 50% probability that the project will generate the base-case cash flows. The analysts also think that there is a 25% probability of the project generating the best-case cash flows and a 25% probability of the project generating the worst-case cash flows.

What would be the expected net present value (NPV) of this project if the project’s cost of capital is 12%?

A.) $21,458

B.) $25,975

C.) $24,846

D.) $22,587

Herman now wants to take into account its ability to abandon the project at the end of year 2 if the project ends up generating the worst-case scenario cash flows. If it decides to abandon the project at the end of year 2, the company will receive a one-time net cash inflow of $3,000 (at the end of year 2). The $3,000 the company receives at the end of year 2 is the difference between the cash the company receives from selling off the project’s assets and the company’s –$4,500 cash outflow from operations. Additionally, if it abandons the project, the company will have no cash flows in years 3 and 4 of the project.

Using the information in the preceding problem, find the expected NPV of this project when taking the abandonment option into account.

A.) $28,158

B.) $31,998

C.) $30,718

D.) $25,598

What is the value of the option to abandon the project?

A.) $2,108

B.) $2,710

C.) $2,258

D.) $3,011

E.) $2,559