Please answer the following questions. Please write all your work. You will be graded on your process, NOT on achieving the correct answer. Please staple all pages together. Include your name on every page.

1) Wacky Widgets, Incorporated is considering a new three-year expansion project to make new Widgets. It requires an initial fixed investment of $2.7 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which it will be sold for $50,000 to a scrapyard. The fixed asset will take 2 years to install, so revenue will begin in year 2.

The project is estimated to generate $2,800,000 in annual sales, with variable costs of 40 percent. There are no fixed costs, and working capital requirements are 5% of annual revenues. The tax rate is 35 percent and the required rate of return is 15 percent. The risk-free rate is 9 percent. Your firm requires a payback period of 3 years to approve a project.

The Widget produced by this product will often go to the same customers as the Bidget, another product produced by Wacky Widgets. They will often be shipped in the same package as another product the firm produces. It will not reduce the overhead on producing Widgets, but it will reduce the cost of shipping Bidgets by $20,000 per year in years 2 - 4.

Answer this question using longhand. Write out each equation.

a) Construct a full pro-forma statement for this project’s projected incremental cash flows.

b) What is the payback period? Based on this decision rule, should you do the project?

c) What is the discounted payback period? Based on this decision rule, should you do the project?

d) What is the NPV? Based on this decision rule, should you do the project?

e) What is the IRR? Based on this decision rule, should you do the project?

f) What is the profitability index? Based on this decision rule, should you do the project?

g) Should you approve the project? What decision rule are you using to make your final decision?

Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure. MU watches are waterproof, so moisture from kayaking, rain, fishing, or even diving up to 100 feet won’t damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2019. All watches are sold for $310 each. Jul. 17 Purchased 60 watches for $9,600 ($160 per watch) on account. Jul. 31 Sold 50 watches for $15,500 cash. Aug. 12 Purchased 50 watches for $8,500 ($170 per watch) cash. Aug. 22 Sold 40 watches for $12,400 on account. Sep. 19 Paid for watches ordered on July 17. Sep. 27 Received full payment for watches sold on account on August 22. Oct. 27 Purchased 90 watches for $16,200 ($180 per watch) cash. Nov. 20 Sold 100 watches for $31,000 cash. Dec. 4 Purchased 120 watches for $22,800 ($190 per watch) cash. Dec. 8 Sold 50 watches for $15,500 on account.

1-a. Calculate sales revenue, cost of goods sold, and ending inventory as of December 31, 2019, assuming Suzie uses FIFO to account for inventory.

1-b. Prepare the gross profit section of a partial income statement for transactions related to MU watches

2. Late in December, the next generation of multiuse (MU II) watches is released. In addition to all of the features of the MU watch, the MU II watches are equipped with a global positioning system (GPS) and have the ability to download and play songs and videos off the internet. The demand for the original MU watches is greatly reduced. As of December 31, the estimated net realizable value of MU watches is only $110 per watch.

a. Record any necessary adjustment on December 31, 2019, related to this information.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

** Record the adjustment for inventory

b. For what amount would MU inventory be reported in the December 31, 2019, balance sheet?

c. Prepare an updated gross profit section of a partial income statement accounting for this additional information.

Q5a) A leading company in Delhi is planning to rent houses and open spaces.
The houses are in three categories namely, having three bedrooms, two bed-
rooms and single bedroom homes. A market survey conducted by a team indi-
cates that a maximum of 650 three bedroom homes, 500 two bedroom homes
and 300 single bedroom homes can be rented. Also, the number of three bed-
room homes should be at least 60% of the number of two bedroom and single
bedroom homes. Open space is proportionate to the number of home units
at the rates of at least 10 sq.ft, 15 sq.ft and 18 sq.ft for three bedroom, two
bedroom and single bedroom homes respectively. However, land availability
limits open space to no more than 10000 sq.ft. The monthly rental income is
estimated at Rs. 45000, Rs. 56250 and Rs. 90000 for single bedroom, two
bedroom and three bedroom homes respectively. The open space rents for Rs.
7500/sq.ft. Formulate the above as an LPP so as to get maximal revenue.
b) Convert the following problem to standard form explaining the various
steps.
Minimize: Z = −3x1 + x2 + x3
Subject to: x1 − 2x2 + x3 ≤ 11
− 4x1 + x2 + 2x3 ≥ 3
2x1 − x3 = −1
x1 ≥ 0, x2 ≥ 0, x3 ≥ 0

The Pritzker Music Pavilion in downtown Chicago is a technologically sophisticated and uniquely designed performing arts venue that hosts live concerts attended by over half a million patrons a year. A group of local organizers, led by a prominent local businesswoman, would like to use the pavilion for a concert to benefit Ceres, a non-profit, national network of investors and environmental organizations working with companies and investors to address sustainability challenges such as global climate change. If the pavilion management agrees to host the concert, the organizers will donate all profits to Ceres (or absorb any losses).

Based on the following revenue and cost information, the organizers would like you to answer the question.

There are three sources of revenue for the concert:

1. Tickets will be sold for $14.00 each.
2. A large multinational corporation headquartered in Chicago will donate $2.00 per ticket sold.
3. Each concert attendee is expected to spend an average of $17.00 for parking, food, and merchandise. [Assume that everyone who buys a ticket will attend the concert.]

On the expense side, there are also three components:

1. A popular national group has agreed to perform at the concert. Normally, the group demands a significant fixed fee to perform, but to reduce the risk for the organizers, the group has agreed to perform for $5.50 per ticket sold.
2. The organizers will pay several companies to operate the parking, food, and merchandise concessions. They will pay $21,000 plus 14% of all parking, food, and merchandise revenue.
3. The organizers will pay the pavilion $85,000 plus $8.00 per person attending to cover its operating expenses (production, maintenance, advertising, etc.).

REQUIRED [ROUND YOUR CM ANSWER TO THE NEAREST CENT; ROUND ALL OTHER ANSWERS TO THE NEAREST UNIT OR NEAREST DOLLAR.]

Assume that the organizers can negotiate the fixed payment for the pavilion's operating expenses. If the organizers expect to sell 8,000 tickets, how much can they afford to pay and still earn a profit of $90,000 (ignore taxes)?

The Pritzker Music Pavilion in downtown Chicago is a technologically sophisticated and uniquely designed performing arts venue that hosts live concerts attended by over half a million patrons a year. A group of local organizers, led by a prominent local businesswoman, would like to use the pavilion for a concert to benefit Ceres, a non-profit, national network of investors and environmental organizations working with companies and investors to address sustainability challenges such as global climate change. If the pavilion management agrees to host the concert, the organizers will donate all profits to Ceres (or absorb any losses).

Based on the following revenue and cost information, the organizers would like answers to several questions.

There are three sources of revenue for the concert:

1. Tickets will be sold for $16.00 each.
2. A large multinational corporation headquartered in Chicago will donate $2.00 per ticket sold.
3. Each concert attendee is expected to spend an average of $19.00 for parking, food, and merchandise.

On the expense side, there are also three components:

1. A popular national group has agreed to perform at the concert. Normally, the group demands a significant fixed fee to perform, but to reduce the risk for the organizers, the group has agreed to perform for $5.50 per ticket sold.
2. The organizers will pay several companies to operate the parking, food, and merchandise concessions. They will pay $23,000 plus 13% of all parking, food, and merchandise revenue.
3. The organizers will pay the pavilion $90,000 plus $6.00 per ticket sold to cover its operating expenses (production, maintenance, advertising, etc.)

Assuming a tax rate of 31% on profits from the concert, what must dollar ticket sales be in order for after-tax concert profits to be $90,000?

Assume that the organizers can negotiate the fixed portion of the pavilion's operating expenses. If the organizers expect to sell 9,000 tickets, how much operating fixed costs can they afford to pay and still earn a profit of $90,000 (ignore taxes)?

2. If the data represent all customers visiting one of the Pelican store in a day a. Estimate a 97% confidence interval estimate for the age of customers. b. Estimate a 96% confidence interval estimate of the proportional of customers who paid by the Proprietary Card.

At a certain fast food restaurant, 77.5% of the customers order items from the value menu. If 14 customers are randomly selected, what is the probability that at least 9 customers ordered an item from the value menu? Use Excel to find the probability.

A store surveys customers to see if they are satisfied with the service they receive. Samples of 75 surveys are taken. One in six people are unsatisfied. What is the variance of the mean of the sampling distribution of sample proportions for the number of unsatisfied customers? What is the variance for satisfied customers?

According to the law of demand, if price increases, quantity demanded of a good or service will decrease or vice versa. Price elasticity of demand tells us how much quantity demanded will decrease when price increases or how much quantity demanded will increase if price decreases.On the other hand, according to the law of supply, if the price increases, quantity supplied of a good or service will increase. Similarly, if price decreases, quantity supplied will decrease. The degree of sensitivity (responsiveness) of production/supply to a change in price is measured by the concept of price elasticity of supply.Total revenue is calculated as the quantity of a good or service sold multiplied by its market price. Thus, it is a measure of how much money a company makes from selling its product. The core objective of a firm is maximizing profit. One of the ways to maximize profit is increasing total revenue. The firm can increase its total revenue by selling more items or by raising the price. Among others, this depends on the nature of the price elasticity of demand. Moreover, the length of time is an important factor in determining price elasticity of demand and supply.

Explain the relationship between the price elasticity of demand and total revenue. What are the impacts of various forms of elasticities (elastic, inelastic, unit elastic, etc.) on business decisions and strategies to maximize profit? Explain your responses using empirical examples, formulas, and graphs.

● Is the price elasticity of demand or supply more elastic over a shorter or a longer period of time? Why? Give examples.

● What are the impacts of government and market imperfections (failures) on the price elasticities of demand and supply?

please list any references used