Use SPSS for this Application Exercise:
A pharmaceutical company tested three formulations of a pain relief medicine for migraine headache sufferers. Volunteers were selected and randomly assigned to one of the three drug formulations. The volunteers were instructed to take the drug during their next migraine headache episode and to report their pain on a scale of 1 to 10 (10 being most pain). The data are below. What can be concluded with ? = 0.05?

a) What is the appropriate test statistic?
---Select--- na one-way ANOVA within-subjects ANOVA two-way ANOVA

b) Compute the appropriate test statistic(s) to make a decision about H₀.
p-value =  ; Decision:  ---Select--- Reject H0 Fail to reject H0

c) Using the SPSS results, compute the corresponding effect size(s) and indicate magnitude(s).
?² =  ;  ---Select--- na trivial effect small effect medium effect large effect

d) Make an interpretation based on the results.

At least one of the formulations differ on pain.None of the formulations differ on pain.   

There are 23 families living in the Willbrook Farms Development. Of these families, 10 prepared their own federal income taxes for last year, 5 had their taxes prepared by a local professional, and the remaining 8 by H&R Block.

1. What is the probability of selecting a family that prepared their own taxes? (Round your answer to 2 decimal places.)

2. What is the probability of selecting two families, both of which prepared their own taxes? (Round your answer to 4 decimal places.)

3. What is the probability of selecting three families, all of which prepared their own taxes? (Round your answer to 4 decimal places.)

4. What is the probability of selecting two families, neither of which had their taxes prepared by H&R Block? (Round your answer to 4 decimal places.)

Suppose an individual invests $10,000 in a load mutual fund for two years. The load fee entails an up-front commission charge of 3 percent of the amount invested and is deducted from the original funds invested. In addition, annual fund operating expenses (or 12b-1 fees) are 0.80 percent. The annual fees are charged on the average net asset value invested in the fund and are recorded at the end of each year. Investments in the fund return 8 percent each year paid on the last day of the year. If the investor reinvests the annual returns paid on the investment, calculate the annual return on the mutual fund over the two-year investment period

(Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161))

Make sure the answer you provide is right please

A pharmaceutical company developed a new revolutionary diet pill, “fat buster,” which is believed to greatly help people with losing weights. They conducted an experimental study to assess its relative effectiveness, comparing it with a currently popular diet pill in the market. A random sample of 28 participants were split into two groups: People in Group A used this company’s “fat buster” and those in Group B used a competing diet pill, “fat killer.” After taking the pills for 6 months while otherwise being treated the same way, participants had their weights measured. On average, participants in Group A lost 11.39 pounds while those in Group B lost 6.71 pounds. The results of t-test (non-directional), however, were not significant (a = .01, t_crit = 2.779): t (26) = 2.509. Anxious and desperate, the company now wants to consult you as the new expert on statistics. What recommendations would you make to help them obtain significant results? Provide at least two recommendations. Any additional (and valid) suggestions or recommendations you provide will be given 2 extra points for each.

You lend $400,000 to your friend for seven years. According to the agreement, your friend has to repay $89,000 annually for the first four years with a fixed interest rate of 15% compounded annually. Your friend tries to bargain for a 13% charged for the remaining periods. What should be the annual repayment for the last three years?

In order to study the quality of parts, a batch of 100 parts was checked at the enterprise. The results are presented in the following table:

Determine the mean, variance, mode, median, 1st and 3rd quartiles, coefficient of variation, plot a histogram, find asymmetry and kurtosis. Calculated indicators indicate in the figure.

Designing a Managerial Incentives Contract

Specific Electric Co. asks you to implement a pay-for-performance incentive contract for its new CEO and four EVPs on the Executive Committee. The five managers can either work really hard with 70 hour weeks at a personal opportunity cost of $200,000 in reduced personal entrepreneurship and increased stress-related health care costs or they can reduce effort, thereby avoiding the personal costs. The CEO and EVPs face three possible random outcomes: the probability of the company experiencing good luck is 30 percent, medium luck is 40 percent, and bad luck is 30 percent. Although the senior management team can distinguish the three “states” of luck as the quarter unfolds, the Compensation Committee of the Board of Directors (and the shareholders) cannot do so. Once the board designs an incentive contract, soon thereafter the good, medium, or bad luck occurs, and thereafter the senior managers decide to expend high or reduced work effort. One of the observable shareholder values listed below then results.

Assume the company has 10 million shares outstanding offered at a $65 initial share price, implying a $650,000,000 initial shareholder value. Since the EVPs and CEOs effort and the company’s luck are unobservable to the owners and company directors, it is not possible when the company’s share price falls to $50 and the company’s value to $500,000,000 to distinguish whether the company experienced reduced effort and medium luck or high effort and bad luck. Similarly, it is not possible to distinguish reduced effort and good luck from high effort and medium luck.

Answer the following questions from the perspective of a member of the Compensation Committee of the board of directors who is aligned with shareholders’ interests and is deciding on a performance-based pay plan (an “incentive contract”) for the CEO and EVPs.

Referenced Questions:

• 2. If you decide to pay 1 percent of the increase in shareholder value as a cash bonus, what performance level (what share price or shareholder value) in the table should trigger the bonus? Suppose you decide to elicit high effort by paying a bonus should the company’s value rise to $800,000,000. What two criticisms can you see of this incentive contract plan?
• 3. Suppose you decide to elicit high effort by paying a bonus only for an increase in the company’s value to $1,000,000,000. When, and if, good luck occurs, what two criticisms can you see of this incentive contract plan?
• 4. Suppose you decide to elicit high effort by paying the bonus when the company’s value falls to $500,000,000. When, and if, bad luck occurs, what two criticisms can you see of this incentive contract plan?

_______________________________________________________

#8) Design an incentive plan that seeks to elicit high effort by granting restricted stock. Show that one-half million shares granted at $70 improves shareholder value relative to all prior alternatives.

#9) Sketch the game tree for designing this optimal managerial incentive contract among the alternatives in Question 2, 3 and 4. Who makes the first choice? Who the second? What role does randomness play? Which bonus pay contract represents a best reply response in each endgame? Which bonus pay contract should the Compensation Committee of the Board select to maximize expected value? How does that compare with your selection based on the contingent claims analysis in Questions 7 and 8?

Rainbow Company, a medium-sized company specialized in the manufacture and
distribution of equipment for babies and small children, is evaluating a new capital
expenditure project. In a joint venture with another separate company it has invented a
remote controlled pushchair, one of the first of its kind on the market. It has been unable
to obtain a patent for the invention, but is sure that it will monopolize the market for the
first three years. After this, it expects to be faced with stiff completion.
The details are set out below:
1. The project has an immediate cost of K2, 100,000
2. Sales are expected to be K1, 550, 000 per annum for the first three years, falling
to K650, 000 per annum for the last two years.
3. Cost of sales is 40% of sales
4. Distribution costs represents 10% of sales.
5. The company’s cost of capital is 5%
Required:
a) Calculate the NPV of the project at the company’s required rate of return. State
whether the project is financially viable? [5 Marks]
b) Calculate the projects Internal Rate of Return (IRR) to the nearest percent.

Summerville Inc. is considering an investment in one of two common stocks. Given the information in the popup​ window: ​, which investment is​ better, based on the risk​ (as measured by the standard​ deviation) and return of​ each? a. The expected rate of return for Stock A is nothing ​%. ​ (Round to two decimal​ places)

COMMON STOCK A COMMON STOCK B PROBABILITY RETURN PROBABILITY RETURN 0.20 12% 0.20 -6% 0.60 15% 0.30 7% 0.20 18% 0.30 15% 0.20 20%