Consider a situation where a company will earn $100 payable in one year if it completes
a contract. If the company completes the contract the debt holders are promised a
payment of $40 in one year. However, if the firm cannot complete the contract,
expected earnings in one year will be only $50. If this results then the bond holders will
only receive a payment of $15 (because of the costs of bankruptcy). The probability of
the firm completing the contract is 50%. If bondholders are fully aware of all this
information, what will they pay for the debt? Assume the rate of interest on the bonds
is 12%.
b. Explain the difference between direct and indirect bankruptcy costs. Give two examples
of each.
c. List and explain four practical considerations that firms take into account when
determining capital structure.

A borrower has a 23-year mortgage loan for $464,103 with an interest rate of 6% and monthly payments. If she wants to pay off the loan after 9 years, what would be the outstanding balance on the loan?

The number of hours worked per year per adult in a state is normally distributed with a standard deviation of 37. A sample of 115 adults is selected at random, and the number of hours worked per year per adult is given below. Use Excel to calculate the 98% confidence interval for the mean hours worked per year for adults in this state. Round your answers to two decimal places and use ascending order.

Number of hours
2250
1987
2029
2018
1938
2197
2099
2228
2245
1913
1903
2298
2231
2200
1902
2161
2211
2124
2082
2257
2087
2123
1929
1948
2124
2013
1973
2000
2030
1932
1993
2014
2118
1900
2195
2222
2035
2088
2010
1962
2166
1918
2070
2277
2114
1975
2045
2050
1921
2103
1954
2017
2235
1993
2156
1984
2057
2200
2133
2144
2145
2219
2222
2210
2143
2163
2168
2246
2186
1907
2072
2142
2187
2036
2207
2270
2262
2159
1914
1926
2261
2006
1948
2028
2256
2182
1955
1969
1941
1924
2176
2256
2051
2111
2221
2222
2190
2068
1942
2024
2258
2201
2085
2061
2004
2260
2136
2244
1989
1941
2297
2159
2260
2093
2293

For the next 30 years, you will receive annual payments of $10,000/year. The difference in the present value terms if you receive these payments at the beginning of each year rather than at the end of each year is closest to what value? Assume the discount rate is 6% APR

8150

8300

7850

8000

8450

Consider a project with a 6-year life. The initial cost to set up the project is $450,000. This amount is to be linearly depreciated to zero over the life of the project. The firm expects to be able to sell the equipment for $90,000 after 6 years.

The price per unit is $380, variable costs are $304 per unit and fixed costs are $45,000 per year. The project has a required return of 12% and a tax rate of 28%.

How many units must be sold per year for the project to achieve financial break-even?

Arthur and Rebecca have been married for one year, and are planning to buy a house in Canberra for $900,000. They will borrow $600,000 from a bank. The interest rate on the loan is 4.00% per annum, compounding quarterly. The loan is for 30 years, and they have to make quarterly repayments to the bank, the first payment being exactly three months (i.e. one quarter) from today. What is the amount of the quarterly repayment?

Select one:

a. $8,458.77

b. $10,152.36

c. $12,912.39

d. $8,608.26

Assume the weights of 10 year old children are normally distributed with a mean of 90 pounds and a variance of 36.

a. What is the standard deviation of the sampling mean for a sample of size 100?

b. What is the 95% confidence interval for this distribution?

c. What is the 99% confidence interval for this distribution?

A random sample of 225 statistics tutoring sessions was selected and the number of students absent at each session was recorded. The mean was 11.6 and the standard deviation was 4.1. Estimate the number of absences per session. (Remember: What CL do we default to when not specified?)

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.

Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:

Required:

1-a. Compute the throughput time for each month. (Round your answers to 1 decimal place.)

1-b. Compute the manufacturing cycle efficiency (MCE) for each month. (Round your answers to 1 decimal place.)

1-c. Compute the delivery cycle time for each month. (Round your answers to 1 decimal place.)

3-a. Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE. (Round your answers to 1 decimal place.)

3-b. Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE. (Round your answers to 1 decimal place.)

the cost for a four year project is 1,400,000. The respective cash inflows for years 1,2,3,and 4 are 600,000 , 700,000 , 500,000 , and 200,000. What is the discounted payback period if the discount rate is 6%.

No financial calculator work by hand step by step.   

One​ year, the mean age of an inmate on death row was 39.3 years. A sociologist wondered whether the mean age of a​ death-row inmate has changed since then. She randomly selects 32 death-row inmates and finds that their mean age is 38.7​, with a standard deviation of 9.5. Construct a​ 95% confidence interval about the mean age. What does the interval​ imply?

Choose the correct hypotheses.

H0​:

muμ

x overbarx

sigmaσ

pp

▼

not equals≠

less than<

equals=

greater than>

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

H1​:

▼

pp

sigmaσ

muμ

x overbarx

▼

equals=

less than<

not equals≠

greater than>

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

Construct a​ 95% confidence interval about the mean age. With​ 95% confidence, the mean age of a death row inmate is between__ years and ___nothing years. ​(Round to two decimal places as​ needed.)

What does the interval​ imply?

A.Since the mean age from the earlier year is not contained in the​ interval, there is not sufficient evidence to conclude that the mean age had changed.

B.Since the mean age from the earlier year is contained in the​ interval, there is not sufficient evidence to conclude that the mean age had changed.

C.Since the mean age from the earlier year is contained in the​ interval, there is sufficient evidence to conclude that the mean age had changed.

D.Since the mean age from the earlier year is not contained in the​ interval, there is sufficient evidence to conclude that the mean age had changed.