1. Affliction Company uses the lower-of-cost-or-market method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2014, consists of products D, E, F, G, H, and I. Relevant per-unit data for these products appear below. Using the lower-of-cost-or-market rule, determine the proper unit value for balance sheet reporting purposes at December 31, 2014, for each of the inventory items below.

The total population of Country A can be categorized as follows:

• 110 people are employed part-time, by choice
• 120 people are employed part-time, but would prefer to work full-time
• 130 people are employed full-time
•   50 students are working in part-time, work-study positions
•   40 people are not employed but are actively seeking work
•   30 people are not working and are not looking for a job
•   10 people are considered discouraged workers
•   35 people are marginally-attached
•   60 people are under age 16
•   15 people are retired, not working and not looking for work
  
  a.  The (U3) unemployment rate is equal to _____ %
  b.  Is this economy “fully-employed” according to the U.S. definition?  Why or why not?

  c. True or False.  Underemployed individuals are counted as “employed” even though they are not fully using their skills.  Justify your answer.

  d. True or False.  Cyclical unemployment is a result of recessions and economic downturns and is not considered part of the natural rate of unemployment.  Justify your answer.

Shown below is the activity for one of the products of Marathon Creations:

January 1 balance, 80 units @ $50

Purchases:

            January 18: 40 units @ $51

            January 21: 30 units @ $52

            January 28: 40 units @ $54

Sales:

            January 12: 30 units @ $80

            January 22: 50 units @ $80

            January 31: 45 units @ $82

Required:

Marathon Creations uses a Period Inventory System. Compute ending inventory as of January 31 and sales, cost of goods sold and gross profit for the month of January for each of the following inventory cost flow assumptions:

1. FIFO
2. Weighted Average
3. LIFO

There are two traffic lights on a commuter's route to and from work. Let X₁ be the number of lights at which the commuter must stop on his way to work, and X₂ be the number of lights at which he must stop when returning from work. Suppose that these two variables are independent, each with the pmf given in the accompanying table (so X₁, X₂ is a random sample of size n = 2).

μ = 1, σ² = 0.6

Calculate σ_To².

σ_To² =

How does it relate to σ², the population variance?

σ_To² =  · σ²

(d)

Let X₃ and X₄ be the number of lights at which a stop is required when driving to and from work on a second day assumed independent of the first day. With T_o = the sum of all four X_i's, what now are the values of E(T_o) and V(T_o)?

E(T_o)=V(T_o)=

(e)

Referring back to (d), what are the values of

P(T_o = 8) and P(T_o ≥ 7)

[Hint: Don't even think of listing all possible outcomes!]

P(T_o = 8)

=

P(T_o ≥ 7)

=

8. Madsen Motors's bonds have 23 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 7%, and the yield to maturity is 9%. What is the bond's current market price? Round your answer to the nearest cent.

9. A bond has a $1,000 par value, 10 years to maturity, and a 7% annual coupon and sells for $985.

1. What is its yield to maturity (YTM)? Round your answer to two decimal places.

10. Nesmith Corporation's outstanding bonds have a $1,000 par value, a 6% semiannual coupon, 12 years to maturity, and a 10% YTM. What is the bond's price? Round your answer to the nearest cent.

11. A firm's bonds have a maturity of 10 years with a $1,000 face value, have an 8% semiannual coupon, are callable in 5 years at $1,049.23, and currently sell at a price of $1,095.02. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places.

The following data lists the ages of a random selection of actresses when they won an award in the category of Best​ Actress, along with the ages of actors when they won in the category of Best Actor. The ages are matched according to the year that the awards were presented. Complete parts​ (a) and​ (b) below.

Actress (years) 31   25   29   31   35   25   25   42   30   32

Actor (years)    56   40   39   34   29   37   52   35   34   44

a. Use the sample data with a 0.01 significance level to test the claim that for the population of ages of Best Actresses and Best​ Actors, the differences have a mean less than 0​ (indicating that the Best Actresses are generally younger than Best​ Actors).

In this​ example, μd is the mean value of the differences d for the population of all pairs of​ data, where each individual difference d is defined as the​ actress's age minus the​ actor's age. What are the null and alternative hypotheses for the hypothesis​ test?

H0​: μd (1) _____ , _____ years

H1​: μd (2) _____ , _____ years

​(Type integers or decimals. Do not​ round.)

(1) >

<

≠

=

(2) <

=

≠

>

Identify the test statistic.

t= _____ ​(Round to two decimal places as​ needed.)

Identify the​ P-value.

​P-value=_____ ​(Round to three decimal places as​ needed.)

What is the conclusion based on the hypothesis​ test?

Since the​ P-value is (3) _____ the significance​ level, (4) _____ the null hypothesis. There (5)_____ sufficient evidence to support the claim that actresses are generally younger when they won the award than actors.

(3) less than or equal to

greater than

(4) reject

fail to reject

(5) is

is not

b. Construct the confidence interval that could be used for the hypothesis test described in part​ (a). What feature of the confidence interval leads to the same conclusion reached in part​ (a)?

The confidence interval is _____ ​year(s)<μd< _____ ​year(s).

​(Round to one decimal place as​ needed.)

What feature of the confidence interval leads to the same conclusion reached in part​ (a)?

Since the confidence interval contains (6) _____ (7) _____ the null hypothesis.

(6) zero,

only negative numbers,

only positive numbers,

(7) reject

fail to reject

Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a normal distribution with a mean of 17 gallons per week and a standard deviation of 3.2 gallons per week. The new manager desires a service level of 90 percent. Lead time is two days, and the dairy is open seven days a week. (Hint: Work in terms of weeks.)

a-1. If an ROP model is used, what ROP would be consistent with the desired service level? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

ROP ______ gallons

a-2. How many days of supply are on hand at the ROP, assuming average demand? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Days _______

b-1. If a fixed-interval model is used instead of an ROP model, what order size would be needed for the 90 percent service level with an order interval of 7 days and a supply of 8 gallons on hand at the order time? (Do not round intermediate calculations. Round your final answer to the nearest whole number.)

Order size _______ gallons

b-2. What is the probability of experiencing a stockout before this order arrives? (Do not round intermediate calculations. Round your final answer to the nearest whole percent. Omit the "%" sign in your response.)

Probability _________ %

c. Suppose the manager is using the ROP model described in part a. One day after placing an order with the supplier, the manager receives a call from the supplier that the order will be delayed because of problems at the supplier’s plant. The supplier promises to have the order there in two days. After hanging up, the manager checks the supply of walnut fudge ice cream and finds that 2 gallons have been sold since the order was placed. Assuming the supplier’s promise is valid, what is the probability that the dairy will run out of this flavor before the shipment arrives? (Do not round intermediate calculations. Round your final answer to the nearest whole percent. Omit the "%" sign in your response.)

Risk probability _________ %