show the fixed cost are fixed in total but is variable on a per unit basis and that variable in total but is fixed on a per unit basis

The Ithaca Company is considering leasing a machine for a period of four years. The cost to buy the machine outright today is $90,000 and the machine has a normal expected economic life of 5 years. The lease payment that is required is based on an annual interest rate of 12% and a residual of $18,000 at the end of the lease. Find the following for year 1 and year 2

Beginning Balance of Lease Liability

Annual Lease Payment

Interest Portion of Lease Payment

Principal Portion of Lease Payment

Ending Balance of Lease Liability

A special bumper was installed on selected vehicles in a large fleet. The dollar cost of body repairs was recorded for all vehicles that were involved in accidents over a 1-year period. Those with the special bumper are the test group and the other vehicles are the control group, shown below. Each "repair incident" is defined as an invoice (which might include more than one separate type of damage).

(a) Construct a 95 percent confidence interval for the true difference of the means assuming equal variances. (Round your final answers to 3 decimal places. Negative values should be indicated by a minus sign.)

The 95% confidence interval is from  to

(b) Repeat part (a), using the assumption of unequal variances with Welch's formula for d.f. (Round the calculation for Welch's df to the nearest integer. Round your final answers to 3 decimal places. Negative values should be indicated by a minus sign.)

The 95% confidence interval is from  to

(c) Did the assumption about variances change the conclusion?
  

• Yes

• No

(d) Construct separate 95% confidence intervals for each mean. (Round your intermediate t_crit value to 3 decimal places. Round your final answers to 2 decimal places.)

1. The cash flows for four projects are shown below, along with the cost of capital for these projects. If these projects are mutually exclusive, which one should be taken?

   	A.	Year:                         0                1            2              3            4                  5 Cash flow:                     -$12,000    $4000    $4000      $4000    $4000          $4000 Cost of Capital: 5.0%
   	B.	Year:                              0                1            2              3            4                  5 Cash flow:                     -$15,000    $4000    $4000      $4000    $4000          $4000 Cost of Capital: 7.0%
   	C.	Year:                              0                1            2              3            4                  5 Cash flow:                     -$20,000    $6000    $6000      $6000    $6000          $6000 Cost of Capital: 8.2%
   	D.	Year:                              0                1            2              3            4                  5 Cash flow:                     -$18,000    $5000    $5000      $5000    $5000          $5000 Cost of Capital: 7.6%

1. If total cost is given by TC = 500+ 10Q − 10Q2 + 0.5Q3 , then average variable cost is minimized at __________ units of output.

a. 20 b. 10 c. 50 d. 5 e. 100

12. If output is produced according to Q = K0.5 + 3L0.5, then this production process exhibits:

a. increasing returns to scale b. constant returns to scale c. decreasing returns to scale d. first decreasing and then increasing returns to scale e. first increasing and then decreasing returns to scale

13. Company XYZ has zero fixed costs and its average variable cost of cases is given by AVC = 5Q + 600, the marginal cost at an output level of 15 units is:

a. $625 b. $500 c. $750 d. $600 e. $550

14. Given a cost function C(Q) = 400 + 18Q + 6Q2 , what is the marginal cost function?

a. 18 + 12Q. b. 18 + 12Q2. c. 400 + 6Q2. d. 18Q + 6Q2

In the context of recent research on the Weighted Average Cost of Capital (WACC), the Adjusted Present Value (APV) and the Flow-to-Equity (FTE), which of these methods would you use for the following companies (explain your choice).

a) A firm with uncertain growth rates for the next 10 years.

b) A start-up firm with no debt.

c) A start-up firm with debt.

d) A financially distressed firm that has excess levels of debt but significant accumulated tax credits.

In the context of recent research on the Weighted Average Cost of Capital (WACC),
the Adjusted Present Value (APV) and the Flow-to-Equity (FTE), which of these
methods would you use for the following companies (explain your choice).

a) A firm with uncertain growth rates for the next 10 years.
b) A start-up firm with no debt.
c) A start-up firm with debt.
d) A financially distressed firm that has excess levels of debt but significant
accumulated tax credits.

In the context of recent research on the Weighted Average Cost of Capital (WACC), the Adjusted Present Value (APV) and the Flow-to-Equity (FTE), which of these methods would you use for the following companies (explain your choice).

A firm with uncertain growth rates for the next 10 years.

A tourist agency in Florida claims the mean daily cost of means and lodging for a family of four traveling in Florida is $568. You work for a consumer protection advocate and want to test the claim. In a random sample of 50 families of four traveling in Florida, the mean daily cost of means and lodging is $584 and the standard deviation is $25

1. Do you have enough evidence to reject the agency’s claim?

2. What type of error is possible based on your conclusion?

3. What would be a consequence of this type of error in this situation?