Unequal Lives

Shao Airlines is considering the purchase of two alternative planes. Plane A has an expected life of 5 years, will cost $100 million, and will produce net cash flows of $30 million per year. Plane B has a life of 10 years, will cost $132 million, and will produce net cash flows of $27 million per year. Shao plans to serve the route for only 10 years. Inflation in operating costs, airplane costs, and fares are expected to be zero, and the company's cost of capital is 11%. By how much would the value of the company increase if it accepted the better project (plane)? Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1.234 million should be entered as 1.234, not 1,234,000. Round your answer to three decimal places.

$   million

What is the equivalent annual annuity for each plane? Do not round intermediate calculations. Enter your answers in millions. For example, an answer of $1.234 million should be entered as 1.234, not 1,234,000. Round your answers to three decimal places.

Plane A: $   million

Plane B: $   million

Hyperion​ Inc., currently sells its latest​ high-speed colour​ printer, the Hyper​ 500, for $ 342. Its cost of goods sold for the Hyper 500 is $ 195 per​ unit, and this​ year's sales​ (at the current price of $ 342​) are expected to be 19,000 units. Hyperion plans to lower the price of the Hyper 500 to $ 293 one year from now. a. Suppose Hyperion considers dropping the price to $ 293 ​immediately, (rather than waiting one​ year). By doing so it expects to increase this​ year's sales by 27 % to 24,130 units. What would be the incremental impact on this​ year's EBIT of such a price​ drop? b. Suppose that for each printer​ sold, Hyperion expects additional sales of $ 76 per year on ink cartridges for the​ three-year life of the​ printer, and Hyperion has a gross profit margin of 65 % on ink cartridges. What is the incremental impact on EBIT for the next three years of dropping the price immediately​ (rather than waiting one​ year)? The incremental change in EBIT for the first year is ​?? The incremental change in EBIT for the second year is ​? ​(Round to the nearest​ dollar.) The incremental change in EBIT for the third year is ​? ​(Round to the nearest​ dollar.)

For decades, people have believed that boys are innately more capable than girls in math. In other words, due to the intrinsic differences in brains, boys are better suited for doing math than girls. Recent research challenges this stereotype, arguing that gender differences in math performance have more to do with culture than innate aptitude. In the U.S., for example, girls perform just as well on standardized math tests as boys. Others argue, however, that while the average may be the same, there is more variability in math ability for boys than girls, resulting in some boys with soaring math skills. A portion of representative data on math scores for boys and girls is shown in the accompanying table.

In a report, use the above information to:

1. Construct and interpret the 95% confidence interval for the ratio of the variance of math scores for boys and for girls. Discuss the assumptions made for the analysis.

2. Determine at the 5% significance level if boys have more variability in math scores than girls. (Two full sentences: one stating your decision using p-value or critical value approach and one stating your conclusion.)

Show all working out and reasoning, be specific and detailed please. Please do all working out in Excel only. Thank you. This is about Chi Squared Distribution:Statistical Inference Concerning Variance and F Distribution:Inference Concerning Ratio of Two Population Variances to give you an idea about what formulas I'm looking for. Thank you.

Appendix 1: Financial Statements From an End-of-Period Spreadsheet

Alert Security Services Co. offers security services to business clients.

Prepare an income statement for Alert Security Services Co.

Prepare a statement of stockholders’ equity for Alert Security Services Co. During the year ended October 31, 20Y3, common stock of $6 was issued. If an amount box does not require an entry, leave it blank. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign.

Prepare a balance sheet for Alert Security Services Co.

Refer to the data tables above and answer the following questions. Be sure to support your answers (e.g. provide probabilities, ratios, etc.).

Is there a difference in the probability of death for males vs. females?

Does age make a difference in the probability of death?

What does the number of children in relation to the number of adults tell you about this population?

Does economic status make a difference in the probability of death? Does your answer to this question differ depending on the subgroup you are looking at?

What other questions would you like to ask about these data or this event in order to help you make a determination? Can you guess what event generated this data?

Sally was hired at an annual salary of $60,000 on 1/1/20.   She elected to contribute $2000 to her Flexible Spending Account (FSA) and her employer contributed $500 to the plan. She contributed $5,000 to the company’s 401(k) plan and the company contributed $2500.   In addition, she contributed $100 from her payroll to the local United Way campaign. Compute the amount of her 2020 compensation that is subject to FICA taxes and the amount subject to income taxes.

A 5-year project requires equipment that costs $100,000. If undertaken, the shareholders will contribute $40,000 cash and borrow $60,000 at 7% with an interest-only loan with a maturity of 5 years and annual interest payments. The equipment will be depreciated straight-line to zero over the 5-year life of the project. There will be a pre-tax salvage value of $10,000. There are no other start-up costs at year 0. During years 1 through 5, the firm will sell 50,000 units of product at $5; variable costs are $3; there are no fixed costs. The cost of unlevered equity is 14%, the tax rate is 40% and the risk-free rate is 2%. What is the NPV of the project using the WACC and APV methodologies?

Calculate the cost of capital of the firm

Select one:

a. 9.64%

b. 10.64%

c. 11.64%

d. 12.64%

Admitting New Partners Who Buy an Interest and Contribute Assets

The capital accounts of Trent Henry and Tim Chou have balances of $142,500 and $102,800, respectively. LeAnne Gilbert and Becky Clarke are to be admitted to the partnership. Gilbert buys one-fifth of Henry’s interest for $32,800 and one-fourth of Chou’s interest for $22,600. Clarke contributes $34,800 cash to the partnership, for which she is to receive an ownership equity of $34,800.

a1. Journalize the entry to record the admission of Gilbert. For a compound transaction, if an amount box does not require an entry, leave it blank.

a2. Journalize the entry to record the admission of Clarke.

b. What are the capital balances of each partner after the admission of the new partners?

Calculator

Print Item

Admitting New Partner With Bonus

Cody Jenkins and Lacey Tanner formed a partnership to provide landscaping services. Jenkins and Tanner shared profits and losses equally. After all the tangible assets have been adjusted to current market prices, the capital accounts of Cody Jenkins and Lacey Tanner have balances of $69,000 and $90,000, respectively. Valeria Solano has expertise with using the computer to prepare landscape designs, cost estimates, and renderings. Jenkins and Tanner deem these skills useful; thus, Solano is admitted to the partnership at a 30% interest for a purchase price of $43,000.

a. Determine the recipient and amount of the partner bonus.
$  

b. Provide the journal entry to admit Solano into the partnership. For a compound transaction, if an amount box does not require an entry, leave it blank.

c. Why would a bonus be paid in this situation?

Apparently, Jenkins and Tanner value   offered by Solano.

4 (a). You contribute $5,500 to your traditional IRA every year for 20 and earn 8 percent annually. If you are in the 24 percent income tax bracket, what will be your annual tax obligation when you withdraw the funds for the next 15 years if your funds continue to earn 8 percent? 4 (b). A widower currently has $107,500 yielding 8 percent annually. Can he withdraw $18,234 a year for the next 10 years? If he cannot, what return must he earn in order to withdraw $18,234 annually?