The national mean annual salary for a school administrator is $90,000 a year. A school official took a sample of 25 school administrators in the state of Ohio to learn about salaries in that state to see if they differed from the national average. Click on the datafile logo to reference the data. (a) Choose the hypotheses that can be used to determine whether the population mean annual administrator salary in Ohio differs from the national mean of $90,000. H0: Ha: (b) The sample data for 25 Ohio administrators is contained in the file named Administrator. What is the p value for your hypothesis test in part (a)? If required, round your answer to four decimal places. Do not round your intermediate calculations. 0.0213

Suppose a 2 year 5% (annual coupon) bonds are selling at par (that is, for $100 of face value, the price is equal to $100) and 1 year zero coupon bonds has a yield to maturity of 7%.

(a) What are the 1-year and 2-year interest rates, r1 and r2, respectively?
(b) What should be the price of a two year 8% coupon bond with a face value of $100?

(c) What are the Durations of 5% coupon bonds and 8% coupon bonds? Which one has longer duration? What is the implication about interest rate risk?

(Please give the specific numbers of part c.)

The Dorset Corporation produces and sells a single product. The following data refer to the year just completed:

Assume that direct labor is a variable cost.

Required:

a. Compute the unit product cost under both the absorption costing and variable costing approaches.

b. Prepare an income statement for the year using absorption costing.

c. Prepare an income statement for the year using variable costing.

d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.

Singer inc. is about to start a 4-year project. A new plant will be built. The plant will require an amount of $40 million to acquire new fixed assets that will be depreciated straight-line through the life of the project. The company also possesses a building that it bought for $5 million and has a net book value of 0. Today's market value for the building is $4.1 million, while it can be rented for $220,000 yearly. The company wants to situate its new plant in this building. The following are today's market data for Singer (that is before the project starts):

?Debt: $240,000,000. Interest rate: 7.5%. The debt amount is kept constant.

?Common stocks: 9,500,000 shares outstanding. Stock price: $63.

?The levered equity Beta is 1.2. Market: 8% expected market risk premium, 5% risk free rate. JP Simon Bank charges Singer $1,040,000 as an underwriter fee on new common stock issues (i.e. the cost of helping Singer issue stocks). Singer will raise the funds needed for the project by only issuing stocks. The corporate tax rate is 35%. The project will be managed in total separation from the other operations of the ?firms.

(a) Calculate the new project's initial (time 0) cash ?flow.

(b) The new project has a risk pro?le comparable with the riskiness of its assets in place. What is the appropriate opportunity cost of capital for the project? The company will incur $4,000,000 in annual administrative costs. The plant will manufacture 20,000 widgets per year and sell them for $6,900 each. The unit production cost is $5,400.

(c) What is the annual after-tax cash ?ow from the new project at the end of each of the four years of its life?

(d) Assuming that the depreciation tax shield is as risky as the company's debt, what is the project's NPV?

A person establishes a sinking fund for retirement by contributing $5,000 per year at the end of each year for 5 years. For the next 10 years, equal yearly payments are withdrawn, at the end of which time the account will have a zero balance. If money is worth 4% compounded annually, what yearly payments will the person receive for the last 10 years?

In the following separate cases, answer the questions independently.

1. In the year 2018, a director was dismissed and he commenced an action against the company claiming substantial damages for wrongful dismissal. The company's lawyer advised that the ex-director was likely to succeed with his claim estimated to be $1,000,000. In 2019, this case was still unsettled and the company has just found some new evidence showing that the possibility of success of the ex-director's claim was lower, around 30% as advised by the company's lawyer.

Required:

What was the accounting treatment for the claim for 2018 and 2019? Justify your answer. Provide journal entries where applicable. Limit your answer to 50 words.

2. Simple limited is preparing its financial statements for the year ended 31 December 2019. Before the authorization of financial statements for issue, the following material events took place: Limit your answer to 50 words for (a) and (b) respectively.

(a) Simple Limited holds a portfolio of shares listed on the Hong Kong Stock Exchange as at the reporting date. The fair value of the investment portfolio of shares on the reporting date was $3.5 million. The value of such investments had deteriorated by 30% since the reporting date.

(b) Simple Limited carries its inventory at the lower of cost and net realizable value. On 20 January 2020, the company entered into an agreement to sell part of its inventory for $1 million. The cost of inventory as reported in its statement of financial position was $1.5 million.   

The Statements of Financial Position of Dream Limited for the year ended 31 December 2015 are provided below:

Additional information:

1. The depreciation expense is included in cost of sales.
2. During the year, a machine costing $120,000 was sold for $40,000. The accumulated depreciation up to the date of disposal for this machine amounted to $100,000. The profit or loss on disposal of this machine was already included in operating profit for the year of 2015.
3. The revaluation reserves were arising from revaluation of land. There is purchase, but no sale of land during the year.
4. During the year, $18,000 debentures were settled by way of issuing 10,000 new ordinary shares. Other debentures repaid were by cash.
5. All accounts payable relate to inventory purchases.
6. The company declared dividends in 2015. Net income for 2015 is 402.
7. Retained profits were affected only by net profit and dividends declared during the year.
8. The company classified interest payment, dividend received and interest received as cash flow from operating activities and dividend payment as cash flow from financing activities.

Required:

The company prepares the cash flow statement for the year ended 31 December 2015, using indirect method. Please answer the following questions.

1. In the cash flow of operating activities, the adjustment for depreciation expense should be (all numbers in thousands, for example, 100 means 100,000; same rule applies for MC question1-5):

1. Add 140
2. Add 240
3. Add 380
4. None of the above

2. In the cash flow of operating activities, the adjustment for profit on disposal of fixed asset should be:

1. Subtract 20.
2. Add 20.
3. Subtract 80
4. Add 80.

3. In the cash flows from investing activities, “purchase of fixed asset” (including both land and PPE) should be___.

1. Subtract 580.
2. Subtract 590.
3. Subtract 710
4. None of the above.

4. In the cash flows from financing activities, “repayment of debenture” should be ___.

1. Subtract 2.
2. Subtract 20.
3. Subtract 160.
4. None of the above.

5. In the cash flows from financing activities, “dividend paid” should be ___.

1. Subtract 50.
2. Subtract 282.
3. Subtract 302.
4. None of the above.

The current price of a stock is $40. The price of a one-year European put option on the stock with a strike price of $30 is quoted at $2 and the price of a one-year European call option on the stock with a strike price of $50 is quoted at $3.

1. (2 points) Investor D wants to own the shares but wants to reduce his initial investment cost. So he buys the stock and shorts the call option on 100 shares.
   1. Draw a diagram illustrating how the investor’s profit varies with stock price. What are his max profit and max loss per share?
   2. Compute his dollar profit and return if the share price is $25, $42, or $56 in one year.
2. (2 points) Investor E wants to bet on the possible share price fluctuations in the coming year. He buys the put option and the call option on 100 shares.
   1. Draw a diagram illustrating how the investor’s profit varies with stock price. What are his max profit and max loss per share?
   2. Compute his dollar profit and return if the share price is $25, $42, or $56 in one year.

From the following Account Balance and additional information, you are required to prepare for the year ended 30 June 2016. All figures exclude GST where relevant.

(a) Manufacturing Statement showing each element of cost;

(b) Income Statement.