A) To test whether caffeine increases heart rate, a study was conducted with 10 male adults. Heart rate per minute was measured before and after drinking 3 cups of coffee containing 300 mg of caffeine. The before heart rates were measured while resting. The data was found to be normal and is given below. The standard deviation of the differences is s_d = 2.16. Assume that the scores are pairs of scores for ten subjects, and use a = 0.05 to test the claim. Give all 5 steps of a hypothesis test.

Subject            1          2          3          4          5          6          7          8          9          10

Before             62        62        57        63        76        59        56        58        60        63        

After               69        71        65        72        81        67        61        62        65        66

B) Suppose that in Part A, the information concerning the particular score of each subject was lost, and the scores are now treated like two independent samples, with equal variances. Test to see if the after group has a higher heart rate at a = 0.01. Use the information given below.            

Before             62        62        57        63        76        59        56        58        60        63        

After               69        71        65        72        81        67        61        62        65        66

                                    Mean              Standard Deviation

            Before             61.6                             5.64

            After               67.9                             5.80

1. Determine the following information using absorption costing and variable costing:
Absorption costing
a. Manufacturing cost _______________
b. Per-unit cost _______________
c. Cost of ending inventory _______________

Variable costing
a. Manufacturing cost _______________
b. Per-unit cost _______________
c. Cost of ending inventory _______________

Basic facts:
Direct materials $1,000
Direct labor $2,000
Variable overhead $1,500
Fixed overhead $1,000
Units produced 100
Units sold 80

No beginning inventory

2. What is the prime cost per unit and conversion cost per unit:
a. Prime cost _______________
b. Conversion cost _______________

Basic facts:
Direct material $1,000
Direct labor $500
Overhead $200
Units produced 50

3. Determine the breakeven point for both total sales and units:
a. Sales _______________
b. Units _______________

Basic facts:

Fixed overhead $20,000
Contribution margin 20%
Price per unit $10

4. Calculate the contribution margin to demonstrate the impact of changes in higher leverage and lower leverage product changes:

a. Higher leverage contribution margin
- Lower sales volume _______________
- Higher sales volume _______________

b. Lower leverage contribution margin
- Lower sales volume _______________
- Higher sales volume _______________

Basic facts:
Higher leverage
- Sales $200 and $400
- Variable expense 25%
- Fixed expenses $40

Lower leverage
- Sales $200 and $400
- Variable expense 50%
- Fixed expenses $40

5. Determine the change in contribution margin as a result of a change in sales mix for the following:
a. Base case _______________
b. Favorable mix change ______________
c. Unfavorable mix change _______________

Basic facts:
- Sales price per unit in all three cases $10
- Contribution margin: Product A 20%, Product B 30%, Product C 40% and Product D 50%
- Sales units for base case 25 units for all four products
- Sales units for favorable mix change: Product A 10 units, Product B 20 units, Product C 30 units and Product D 40 units
- Sales units for unfavorable mix change: Product A 40 units, Product B 30 units, Product C 20 units and Product D 10 units

6. Determine cost of goods sold: _______________

Basic facts:
Beginning finished goods inventory $3,000
Ending finished goods inventory $6,000
Direct material $15,000
Direct labor $10,000
Overhead $5,000

7. What is the contribution margin % and gross margin %:
Contribution margin % _____________
Gross margin % ______________

Basis facts:
Sales $80
Direct material $28
Direct labor $12
Overhead $10 indirect and $10 direct
SG&A expense $12 indirect $4 direct

8. Determine the cost and cash impact of keeping or replacing Machine X:
Keep
Cost _____________
Cash ______________

Replace
Cost ____________
Cash _____________

Basic facts:
- Original purchase price for Machine X = $20,000
- Machine X has a 10 year life and straight line depreciation, or $2,000 depreciation per year
- Book value after year 6: $20,000-$12,000=$8,000
- Loss on disposal of machine X $3,000
- Replacement machine: $16,000 acquisition cost
Annual cash operating cost: Machine X $40,000 and Replacement Machine $24,000

9. What is the purchase price variance and material usage variance:
Purchase price variance ______________
Material usage variance ______________

Basic facts:
- 100 pounds
- Standard price $2.00 per pound
- Actual price $1.75 per pound
- Cost $2.00 per pound
- Standard usage 500 pounds
- Actual usage 575 pounds

10. What is the labor rate variance and labor efficiency variance:
Labor rate variance ______________
Labor efficiency variance ______________

Basic facts:
- Standard hours 175
- Actual hours 200
- Standard labor rate $20 per hour
- Actual labor rate $15 per hour

11. What is the spending variance: _______________

Basic facts:
Budgeted expenditures $30,000
Actual expenditures $35,000

12. What is the under applied overhead absorption variance: _______________

Basic data:
Standard units 500
Actual units 400
Standard overhead per unit $10

13. Calculate days DSO, DIOH and DPO on hand based on the following information:
DSO _______________
DIOH _______________
DPO _______________

Basic facts – annual (first year of operation):
- Sales $365,000
- Accounts receivable at year end $60,000
- Cost of sales $182,500
- Inventory at year end $25,000
- Accounts payable at year end $22,500

14. What is the cash conversion cycle based on the data in question 13: _______________

15. If you add 5 days to the DSO, DIOH, and DPO based on the data in question 13 and the standard CCC is as calculated in question 13 what is the CCC $ variance: ______________

16. Name three key success factors related to management control systems and responsibility:
_______________
_______________

_______________

17. Goal congruence is achieved when _____________, working in their own perceived best interest, make decisions that help meet the overall goals of the organization.

18. What are the three types of responsibility centers:
_______________
_______________

_______________

19. How many organizations have implemented ISO 9001 and in how many countries:
Organizations ______________

Countries _______________

20. Delegation of freedom to make decisions is called: _____________

21. In a decentralized organization first-level managers generally have the best information concerning local conditions:
True _______________

False ______________

22. For decentralization to work, autonomy is not necessary:
True ________________
False ________________

23. The most common profitability measures include:
_____________
_____________

_____________

_____________

24. What is the formula for EVA: ____________________________

25. The price that one segment charges another segment of the same organization for a product or service is known as a: _________________

26. What is the formula for a transfer price: __________________________

27. What are two attributes of capital assets:
_______________
_______________

28. CIP is reduced in value when an asset is: ______________

29. When does a depreciation charge start for a fixed asset: ______________

30. What is the benefit of accelerated depreciation: _______________

31. What is the objective of discounted-cash-flow models: ______________

32. What is the net present value: _____________

Basic facts:
- Original investment $10,000
- Useful life 4 years
- Annual income generated from investment (cash inflow) $2,500
- Minimum desired rate of return 10%

- NPV factor by year: 1 .9091, 2 .8264, 3 .7513, and 4 .6830

33. IRR determines the discount rate at which the NPV equals: _______________
_______________

34. Sensitivity analysis shows the __________________________ that would occur if financial projections differ from those expected.

35. What are the three types of cash flows that should be considered when relevant cash flows are arrayed:
_______________
_______________
_______________

36. Cost of capital is the Company’s: _______________________________

37. What is the Company’s cost of capital: ______________

Basic facts:
- Expected equity return 12%
- Cost of debt 6%
- Company’s capital structure 60% equity and 40% debt

38. What is the payback period: _____________

Basic facts:
- $25,000 capital expenditure
- $10,000 annual cash saving or generation

39. What are the four types of typical cost objectives:
_______________
_______________
_______________
_______________

40. What are two popular methods for allocating service costs:
_______________
_______________

41. When are by-product cost identified: ________________

42. How is overhead (based on machine hours) applied to a particular product: ____________________________

43. What is the applied overhead: ____________

Basic facts:
- 100 direct labor hours
- Overhead rate per direct labor hour $5.00

44. _______________ costing includes fixed overhead in the cost of products.

45. _______________ costing excludes fixed overhead from the cost of products.

46. Which of the two costing methods in questions 43 and 44 is based on GAAP requirements: _______________

47. Process costing is used when large numbers of nearly: ____________________________

48. Job-order costing allocates costs to products that are identified by individual: _______________________________

49. Service industries typically use process costing:
True _______________
False _______________

50. Organizations using JIT production systems usually have large inventories:
True _______________
False _______________

Family Security is considering introducing tiny GPS trackers that can be inserted in the sole of a​ child's shoe, which would then allow for the tracking of that child if he or she was ever lost or abducted. The​ estimates, that might be off by 10%  (either above or​ below), associated with this new product are shown ​ here: unit price-$130, variable costs-$71, fixed costs-$253,000 per year, expected sales- 10,800 per year. Since this is a new product​ line, you are not confident in your estimates and would like to know how well you will fare if your estimates on the items listed above are 10% higher or 10% lower than expected. Assume that this new product line will require an initial outlay of $1.05 million, with no working capital​ investment, and will last for 10 years, being depreciated down to zero using​ straight-line depreciation. In​ addition, the​ firm's required rate of return or cost of capital is 9.7%, and the​ firm's marginal tax rate is 34%. Calculate the​ project's NPV under the​ "best-case scenario"​ (that is, use the high estimates- 10 percent above​ expected, variable costs 10 percent less than expected, fixed costs 10 percent less than expected, and expected sales 10% more than expected.) Calculate the​ project's NPV under the​ "worst-case scenario."

a. The NPV for the​ best-case scenario will be $___

b. The NPV for the​ worst-case scenario will be $___

​

​

Aaron McCarthy

Aaron McCarthy is 28 years old and is making his first attempt at determining how much he needs to save each year in order to fund his retirement. He works for a Fortune 500 corporation as a project manager. His employer offers a 401(k) plan featuring a 1:1 match for every dollar contributed to a maximum of 6% of his salary. Aaron is eligible to participate but currently is not enrolled in the plan. He is in the 25% marginal tax bracket.

Based on an analysis of his last 3 annual cash flow statements, he has determined that his average gross income has been about $58,000 and his annual living expenditures have been about $46,700. He expects both his income and expenses to match an assumed inflation rate of 3.5% going forward indefinitely.

In order to be conservative, Aaron is working under the assumption that he will be able to maintain his current standard of living on 85% of his current spending after he retires (that is, he expects his annual expenses to fall by 15% in retirement without reducing or lowering his current standard of living).

According to the annual benefit statement he received before his last birthday, Aaron can expect to receive $15,000 (expressed in today’s dollars) per year in Social Security retirement benefits at his normal retirement age (67). Aaron plans to retire at age 67, and expects to live until age 90. His mother’s parents lived until their early 80’s, as did both his father’s parents.

Again, to be conservative, Aaron is assuming a 3.5% inflation rate between now and retirement age and that any future investments he makes can be compounded at an annual rate of 7% (before taxes).

Aaron has a combined total of $15,000 currently invested in three IRAs that he owns. Assume the same 7% annual growth rate for these funds.

Over the last 3 years, Aaron’s savings rate has averaged 3% of his gross wages.

1.     How much will Aaron need to save each year in order to meet his retirement goal?
   1. Assuming he invests these funds in a non-qualified account?
   2. Assuming he enrolls in and funds his 401(k) to the maximum amount possible?
2. What savings rate does this represent under each of the scenarios above?

(please fast!!)

A portfolio is formed out of two stocks A and B and the correlation coefficient between the two stocks is 1. Stock A has a standard deviation of 10%, whereas stock B has a standard deviation of 17%. This portfolio contains 50% of stock A and 50% of stock B. What is the standard deviation of this portfolio?

The claim is that the IQ scores of statistics professors are normally​ distributed, with a mean less than 133. A sample of 11 professors had a mean IQ score of 130 with a standard deviation of 8. Find the value of the test statistic.

The table below presents durations, direct costs and immediate predecessors for each activity of a project executed by a contracting company, under both normal and crash conditions. The weekly indirect cost is L.E. 40.

The Critical Path is A-D-E-G = 25 week

If the contract entitles the contracting company L.E. 80 for each week below the 26-week contract duration limit, Calculate the optimum project completion time?

Alternative dividend policies  Over the last 10​ years, a firm has had the earnings per share shown in the following​ table:

a. If the​ firm's dividend policy were based on a constant payout ratio of​ 40% for all years with positive earnings and​ 0% otherwise, what would be the annual dividend for 2015​?

b. If the firm had a dividend payout of​ $1.00 per​ share, increasing by​ $0.10 per share whenever the dividend payout fell below​ 50% for two consecutive​ years, what annual dividend would the firm pay in 2015​?

c. If the​ firm's policy were to pay​ $0.50 per share each period except when earnings per share exceed​ $3.00, when an extra dividend equal to​ 80% of earnings beyond​ $3.00 would be​ paid, what annual dividend would the firm pay in 2015​?

d. Discuss the pros and cons of each dividend policy described in parts a through c.

A stock is currently priced at $110, and the volatility is 32% per annum. Within the next one year, a dividend of $1.5 is expected after two months and again after eight months (Hint: There are two dividends). The risk-free rate of interest is 7% per annum with continuous compounding. Keep four decimal places for all calculations.

2) According to Black’s approximation, what is the value of a 10-month American call with a strike price of $105?

Carbon-14 decays as follows:

_{14 0            14}

                              C   ----> e   + N   

^{6 -1              7}

   isotopic masses are 14.00307 for nitrogen-14 and 14.00324 for carbon-14. What energy change (kJ/moles) occurs in the beta decay of C-14? NOTE: Do I use these two masses to get the mass defect or do I use the mass of protons and nuetrons to find the mass defect of each one and then subtract the two?