A company manufactures and sells two products: Product A1 and Product C4. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:

The direct labor rate is $29.70 per DLH. The direct materials cost per unit is $263 for Product A1 and $266 for Product C4.

The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

The total cost per unit of Product C4 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

rev: 03_25_2018_QC_CS-119201

Multiple Choice

• $961.52 per unit

• $1,057.70 per unit

• $676.70 per unit

• $994.40 per unit

17. A portfolio consists 20% of a risk-free asset and 80% of a stock. The risk-free return is 4%. The stock has an expected return of 15% and a standard deviation of 30%. What’s the expected return

A. 12.8%

B. 9.5%

C. 15.0%

D. 4.0%

18. The stock of Alpha Company has an expected return of 0.10 and a standard deviation of 0.25. The stock of Gamma Company has an expected return of 0.16 and a standard deviation of 0.40. The correlation coefficient between the two stock’s return is 0.2. If a portfolio consists of 40% of Alpha Company and 60% of Gamma Company, what’s the expected return of the portfolio?

A. 0.126

B. 0.136

C. 0.160

D. 0.130

19. You have the following data on the securities of three firms: Return last year Beta Firm A 10% 0.8 Firm B 11% 1.0 Firm C 12% 1.2 If the risk-free rate last year was 3%, and the return on the market was 11%, which firm had the best performance on a risk-adjusted basis?

A. Firm A

B. Firm B

C. Firm C

D. There is no difference in performance on a risk-adjusted basis

20. An investor has $10,000 invested in Treasury securities and $15,000 invested in stock UVW. UVW has a beta of 1.2. What is the beta of the portfolio?

A. 0.00

B. 0.72

C. 1.20

D. 1.60

Capital Budgeting For the following two projects, determine the 1. Payback Period 2. Discounted Payback 3. Net Present Value 4. Profitability Index (Benefit-Cost Ratio) 5. Internal Rate of Return 6. Modified Internal Rate of Return Project A Project B Year Net Income Cash Flow Net Income Cash Flow 0 (15,000) (19,000) 1 5,000 6,000 3,000 4,000 2 5,000 6,000 5,000 6,000 3 5000 6,000 7,000 8,000 4 5,000 6,000 11,000 12,000 Risk Index 1.80 .60 The firm’s cost of capital ko is 15% and the risk free rate Rf is 10%. The firm assesses risk and assigns a risk index to determine a risk adjusted discount rate. An index of 1.0 would be assigned to an average risk project. To determine risk adjusted rates the firm uses the following equation: Risk Adjusted Rate (RADR) = Rf + [Risk Index (ko – Rf) Task: Rank the projects in accordance with each method of analysis..

At one engineering firm, several call centers are maintained to track customer complaints. Unfortunately, very few employees like this job and therefore there is a lot of employee turnover. This call center uses X-Bar and s charts to track voluntary quits over time. The averages compiled below are from three call centers. The average number is 25 minutes before an employee gets frustrated and quits. The sample size was n = 5 for each month. Use the data below to create one X-Bar chart and one s chart.

Month (Avg. Time) ((s))

January (27.0) ((2.0)) February (27.0) ((2.7)) March (26.5) ((3.0)) April (28.0) ((2.7)) May (25.5) ((2.0)) June (27.5) ((3.0)) July (25.0) ((1.5)) August (25.5) ((1.6)) September (28.0) ((0.5)) October (26.0) ((2.5)) November (26.0) ((4.7)) December (26.5) ((1.3)) January (25.5) ((2.5)) February (25.0) ((6.0)) March (26.5) ((5.5)) April (25.0) ((4.4)) May (28.5) ((2.0)) June (28.0) ((0.5)) July (26.5) ((2.5)) August (24.5) ((1.0))

Create X-Bar and s control charts from this data. Also, calculate the following: X-Double-Bar, s-Bar, UCLx, LCLx, UCLs, and LCLs

Note: single bracket represents “avg.time” and double bracket represents “s”

F. Pierce Products Inc. is considering changing its capital structure. F. Pierce currently has no debt and no preferred stock, but it would like to add some debt to take advantage of low interest rates and the tax shield. Its investment banker has indicated that the pre-tax cost of debt under various possible capital structures would be as follows:

* Use the exact value of 2/3 in your calculations.

F. Pierce uses the CAPM to estimate its cost of common equity, r_s and at the time of the analaysis the risk-free rate is 5%, the market risk premium is 6%, and the company's tax rate is 40%. F. Pierce estimates that its beta now (which is "unlevered" because it currently has no debt) is 1.4. Based on this information, what is the firm's optimal capital structure, and what would be the weighted average cost of capital at the optimal capital structure? Do not round intermediate calculations. Round your answers to two decimal places.

Debt:   %
Equity:   %
WACC:   %

F. Pierce Products Inc. is considering changing its capital structure. F. Pierce currently has no debt and no preferred stock, but it would like to add some debt to take advantage of low interest rates and the tax shield. Its investment banker has indicated that the pre-tax cost of debt under various possible capital structures would be as follows:

Market Debt- to-Value Ratio (wd) (0, .2, .4, .6, .8) Market Equity-to-Value Ratio (ws) ( 1.0, .8, .6, .4, .2) Market Debt- to-Equity Ratio (D/S) ( 0, .25, .67, 1.50, 4.00) Before-Tax Cost of Debt (rd) (6%, 7, 8, 9, 10)

Use the exact value of 2/3 in your calculations. F. Pierce uses the CAPM to estimate its cost of common equity, rs and at the time of the analaysis the risk-free rate is 7%, the market risk premium is 6%, and the company's tax rate is 30%. F. Pierce estimates that its beta now (which is "unlevered" because it currently has no debt) is 1.05. Based on this information, what is the firm's optimal capital structure, and what would be the weighted average cost of capital at the optimal capital structure? Do not round intermediate calculations. Round your answers to two decimal places.

Debt: %

Equity: %

WACC: %

Wilson holds a portfolio that invests equally in three stocks (wAwA = wBwB = wCwC = 1/3). Each stock is described in the following table:

An analyst has used market- and firm-specific information to generate expected return estimates for each stock. The analyst’s expected return estimates may or may not equal the stocks’ required returns. You’ve also determined that the risk-free rate [rRFrRF] is 4%, and the market risk premium [RPMRPM] is 5%.

Given this information, use the following graph of the security market line (SML) to plot each stock’s beta and expected return on the graph.

Tool tip: Mouse over the points in the graph to see their coordinates.

Stock AStock BStock C00.20.40.60.81.01.21.41.61.82.020181614121086420RATE OF RETURN (Percent)RISK (Beta)

A stock is in equilibrium if its required return equals its expected return. In general, assume that markets and stocks are in equilibrium (or fairly valued), but sometimes investors have different opinions about a stock’s prospects and may think that a stock is out of equilibrium (either undervalued or overvalued). Use the analyst’s expected return estimates to determine if this analyst thinks that each stock in Wilson’s portfolio is undervalued, overvalued, or fairly valued.

2.) You believe that a stock currently selling for$50 a share should sell for $60.00 a share. An at-the-money call option (the exercise price equals the market price) sells for $3 per share and an at the money Put option sells for $2.50 per share. In which option should you invest. Now say that he actual price ended up being $54.00. Was there a better choice? Did you make the right choice?

3.) What is the money market all about? You purchased a 91 day United States T-bill on February 1st for $99,000 and sold it on April 1st for $99,500. What was your annualized return?

4.) A 20 year United States Treasury bond has a market rate of interest of 4 percent and a coupon rate of 4 percent. What is its price? A 20 year AAA corporate bond has a market rate of interest of 6 percent and coupon rate of 6 percent. What is its price? Which bond is more risky? Now say that both the market rate of the Treasury security and the corporate bond rise by 1 percent, what is the new price of each bond. Comment.

5.) The United States economy grew by 2.3 percent in 2019 and the European economy grew by 1.0 percent. Based on this data, what happened to the value of the dollar compared to the Euro. Explain   

Treynor Pie Company is a food company specializing in high-calorie snack foods. It is seeking to diversify its food business and lower its risks. It is examining three companies—a gourmet restaurant chain, a baby food company, and a nutritional products firm. Each of these companies can be bought at the same multiple of earnings. The following represents information about all the companies. Company Correlation with Treynor Pie Company Sales ($ millions) Expected Earnings ($ millions) Standard Deviation in Earnings ($ millions) Treynor PieCompany + 1.0 $ 158 $ 8 $ 2.0 Gourmet restaurant + .5 66 6 1.2 Baby food company + .4 56 4 1.9 Nutritionalproducts company − .6 79 5 3.5 a-1. Compute the coefficient of variation for each of the four companies. (Enter your answers in millions (e.g., $100,000 should be entered as ".10"). Round your answers to 3 decimal places.) a-2. Which company is the least risky? Treynor Pie Company Baby food company Nutritional products company Gourmet restaurant a-3. Which company is the most risky? Gourmet restaurant Treynor Pie Company Baby food company Nutritional products company b. Which of the acquisition candidates is most likely to reduce Treynor Pie Company's risk? Gourmet restaurant Nutritional products company Baby food company

1. Determine the current in the circuit by calculating the current in the resistor. Note: We will use I (and V_R since it has the same phase) for reference throughout our analysis (V_R/R = I).

2. Determine the capacitance of the circuit from its reactance, the current calculated above, and the frequency of the source (V_C/I = X_C).

3. Determine the inductance of the circuit from three different voltage measurements, the current calculated in step 1, and the frequency of the source, following the instructions below carefully (this can be complicated).

1. Determine the phase of V_LR with respect to V_R using the law of cosines (V_Lr²= V_LR² + V_R² – 2V_LRV_R cos(α)).

2. Determine the fraction of V_LR due to V_L alone (V_L = V_LRsin(α)).

3. Determine the inductance of the circuit from its reactance using the current determined in step 1 and the V_L determined above (V_L/I =X_L).

4. Determine the loss in the inductor and write it as a resistance using the current found in step 1

            (V_r = V_LRcos(α) – V_R and r = V_r/I).

4. Determine the phase between the source voltage and the current (φ = tan^-1 [(V_L – V_C)/(V_R+V_r)]).

5. Calculate the resonant frequency of the circuit from the values you determined for L and C