Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. Last year, the company sold 32,000 of these balls, with the following results: Sales (32,000 balls) $ 800,000 Variable expenses 480,000 Contribution margin 320,000 Fixed expenses 211,000 Net operating income $ 109,000 Required: 1. Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year’s sales level. 2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls? 3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $109,000, as last year? 4. Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs? 5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls? 6. Refer to the data in (5) above. a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $109,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 32,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage.

Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. Last year, the company sold 56,000 of these balls, with the following results: Sales (56,000 balls) $ 1,400,000 Variable expenses 840,000 Contribution margin 560,000 Fixed expenses 373,000 Net operating income $ 187,000 Required: 1. Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year’s sales level. 2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls? 3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $187,000, as last year? 4. Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs? 5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls? 6. Refer to the data in (5) above. a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $187,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 56,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage.

1. Which of the following statements best describes a sampling distribution?

Select one:

a. It is the distribution of the values of a variable in the population from which the sample is taken

b. It is the distribution of the values of a statistic that resembles the normal distribution when the sample size is large

c. It is the distribution of the values of a statistic calculated from 1000 simple random samples displayed in a histogram.

d. It is the distribution of the values of a particular variable that are observed in a random sample.

2. The weight of extra-large egg has a Normal distribution with a mean of 3 oz and a standard deviation of 0.1 oz.

What is the sampling distribution of the mean weight of extra-large egg (i.e., the distribution of the sample mean weight of an egg in a randomly selected carton of a dozen eggs (i.e., 12 eggs))?     

Select one:

a. N(12,1)

b. N(3, 0.1)

c. N(3, 0.03)

d. N(3, 0.2)

3. The manager at a movie theater would like to estimate the true mean amount of money spent by customers on popcorn only. He selects a simple random sample of 26 receipts and calculates a 92% confidence interval for true mean to be ($12.45, $23.32). The confidence interval can be interpreted to mean that, in the long run,                   

Select one:

a. 92% of all customers who buy popcorn spend between $12.45 and $23.22

b. 92% of similarly constructed intervals would contain the population mean

c. 92% of similarly constructed intervals would contain the sample mean

4. A population variable has a distribution with mean µ = 25 and variance σ² is 256. From this population a simple random sample of n observations is to be selected and the mean of the sample values calculated. If the population variable is known to be Normally distributed and the sample size is to be n = 25, what is the probability that the sample mean will be between 20.5 and 31.50, i.e., P(20.5 ≤ x-bar ≤ 31.5)?

5. Since confidence intervals are based on the sampling distribution of the sample mean, it is possible to form confidence intervals when sampling from slightly skewed distributions due to the central limit theorem

Select one:

True

False

6. The heights of a simple random sample of 200 male high school sophomores in a midwestern state are measured. The sample mean (x-bar) is 70 inches. Suppose that the heights of male high school sophomores follow a Normal distribution with a standard deviation is 5 inches.    

What is a 99% confidence interval for the population mean μ?

Select one:

a. (59.46, 72.94)

b. (69.09, 70.91)

c. (65.67, 66.73)

d. (58.16, 74.24)

7. The heights of a simple random sample of 200 male high school sophomores in a midwestern state are measured. The sample mean (x-bar) is 70 inches. Suppose that the heights of male high school sophomores follow a Normal distribution with a standard deviation of σ is 5 inches.

Suppose the heights of a simple random sample of 100 male sophomores were measured instead of 200. Which of the following statements is true?  

Select one:

a. The margin of error for the 95% confidence interval would decrease

b. The margin of error for the 95% confidence interval would increase

c. The standard deviation would decrease

                
IPG Photonics Corporation                          
CONSOLIDATED BALANCE SHEETS                          
amounts in thousands, except share and per share data                          
   "December 31,
2017"       "December 31,
2016"           Increase (Decrease)  
                          
ASSETS   Amount   Percent   Amount   Percent       Amount   Percent
Current Assets:                          
Cash and cash equivalents   $909,900        $623,855    34.9%          
Short-term investments   206,257        206,779    11.6%          
Accounts receivable, net   237,278        155,901    8.7%          
Inventories   307,712        239,010    13.4%          
Prepaid income taxes   44,944        34,128    1.9%          
Prepaid expenses and other current assets   47,919        41,289    2.3%          
Total Current Assets   1,754,010    74.1%   1,300,962    72.7%       453,048    34.8%
Long-Term Assets:                          
Deferred income taxes, net   26,976    1.1%   42,442    2.4%       (15,466)   (36.4%)
Goodwill   55,831    2.4%   19,828    1.1%       36,003    181.6%
Intangible assets, net   51,223    2.2%   28,789    1.6%       22,434    77.9%
Property, plant and equipment, net   460,206    19.4%   379,375    21.2%       80,831    21.3%
Other assets   19,009    0.8%   18,603    1.0%       406    2.2%
TOTAL ASSETS   $2,367,255    100.0%   $1,789,999    100.0%       $577,256    32.2%
LIABILITIES AND STOCKHOLDERS’ EQUITY                          
Current Liabilities                          
Current portion of long-term debt   3,604    0.2%   3,188    0.2%       416    13.0%
Accounts payable   35,109    1.5%   28,048    1.6%       7,061    25.2%
Accrued expenses and other liabilities   144,417    6.1%   102,485    5.7%       41,932    40.9%
Income taxes payable   15,773    0.7%   24,554    1.4%       (8,781)   (35.8%)
Total Current Liabilities   198,903    8.4%   158,275    8.8%       40,628    25.7%
"Deferred income taxes and other Long-Term
      Liabilities"   100,652    4.3%   36,365    2.0%       64,287    176.8%
Long-Term Debt, net of current portion   45,378    1.9%   37,635    2.1%       7,743    20.6%
Total Liabilities   344,933    14.6%   232,275    13.0%       112,658    48.5%
STOCKHOLDERS’ EQUITY                          
Common stock, $0.0001 par value; 175,000,000 shares authorized; 54,007,708 shares issued and 53,629,439 shares outstanding at December 31, 2017; 53,354,579 shares issued and 53,251,805 shares outstanding at December 31, 2016   5    0.0%   5    0.0%       -     0.0%
Additional paid-in capital   704,727    29.8%   650,974    36.4%       53,753    8.3%
Retained earnings   1,443,867    61.0%   1,094,108    61.1%       349,759    32.0%
Treasury stock, at cost (378,269 shares at 12/31/17 and 102,774 shares at 12/31/2016)   (48,933)   (2.1%)   (8,946)   (0.5%)       (39,987)   447.0%
Accumulated other comprehensive loss   (77,344)   (3.3%)   (178,583)   (10.0%)       101,239    (56.7%)
Noncontrolling interests   -    0.0%   166    0.0%       (166)   N/A
Total Stockholders’ Equity   2,022,322    85.4%   1,557,724    87.0%       464,598    29.8%
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY   $2,367,255    100.0%   $1,789,999    100.0%       $577,256    32.2%

SEE THE INSTRUCTIONS IN THE CANVAS MODULE BEFORE BEGINNING THIS ASSIGNMENT.

Use the information you calculated in the yellow cells of the "IPG Photonics Horizontal and Vertical Analysis" file (available in the Canvas module). Remember, there are two sheets (the Balance Sheet and the Income Statement) in that file. Enter the answers below and Check your Work. After getting all correct answers, make any necessary corrections in the Excel file, then use that file to help you complete the Analysis Questions in the Canvas module.

For the vertical analysis answers, write your answers with one decimal place, and do not type the % sign.

For IPG Photonics year ended December 31, 2017:

Cash and cash equivalents as a percent of Total Assets %

Short-term investments as a percent of Total Assets %

Accounts receivable, net as a percent of Total Assets %

Inventories as a percent of Total Assets %

Prepaid income taxes as a percent of Total Assets %

Prepaid expenses and other current assets as a percent of Total Assets %

Gross Profit as a percent of Net Sales %

Operating Income as a percent of Net Sales %

For the horizontal analysis answers, write the dollar amounts with no decimal places.

Include all the zeros in the answers. Remember, the amounts in the financial statements are all in thousands, so the amount of increase or decrease is also in thousands of dollars. Do not type commas in the numbers.

Write the percents with one decimal place. Do not type the percent sign.

For both the dollars and percents, use a minus sign before the number if there is a decrease.

Amount of increase (decrease) in Cash and cash equivalents from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Cash and cash equivalents from Dec. 31, 2016 to Dec. 31, 2017 %

Amount of increase (decrease) in Short-term investment from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Short-term investments from Dec. 31, 2016 to Dec. 31, 2017 %

Amount of increase (decrease) in Accounts receivable, net from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Accounts receivable, net from Dec. 31, 2016 to Dec. 31, 2017 %

Amount of increase (decrease) in Inventories from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Inventories from Dec. 31, 2016 to Dec. 31, 2017 %

Amount of increase (decrease) in Prepaid income taxes from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Prepaid income taxes from Dec. 31, 2016 to Dec. 31, 2017 %

Amount of increase (decrease) in Prepaid expenses and other current assets from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Prepaid expenses and other current assets from Dec. 31, 2016 to Dec. 31, 2017 %

in each region of the world we adapt to cultural norms and nuances, but we hold true to our standards and best practices that benefit our owners, team members, and guests. This impacts our approach to every aspect of our business—from the ways we train and engage our team members to our customer marketing campaigns and service delivery. Our strategic perspective is that a brand is a promise consistently delivered. Equally important, we strive to be culturally relevant. Cultural differences largely come to life in food and beverage and leisure amenities, such as spa offerings. For example, our eforea: spa at Hilton treatment menus are designed so that each hotel offers core elements that our guests expect, but the menus also give our owners in China flexibility to add treatments specific to their local market. Hilton Guangzhou Tianhe will feature spa treatments such as a foot massage and a variety of full-body massages inspired by traditional Chinese aromatherapy oils.

As a global brand with hotels in 78 countries, we invest a great deal of time and research into understanding the needs and expectations of travelers today, and we are prepared to meet these needs as they evolve over time. Research tells us that travelers have a great deal of trust for Hilton, particularly when traveling abroad. Because traveling abroad is a new experience for many of our guests from mainland China, our brand gives them confidence that the hotel experience will meet their needs so that they can focus on exploring a new destination.

From our more than two decades of experience operating in mainland China, we see two trends that differentiate the Chinese traveler. These trends are similar to the trends we have historically experienced with other rapidly expanding customer segments. First, we must provide our guests with familiar comforts, and make it a point to have team members fluent in Mandarin on staff at our hotels outside China. The recent global launch of the Hilton Huanying program is helping us achieve this goal.

Second, we recognize that most travelers from China are booking through government-approved travel agents and tour operators, rather than booking directly with a hotel or online. This affects how we communicate with our customers when they are considering lodging options. With more than 20 years of experience serving the China market, we have developed longstanding relationships with government travel agencies and tour operators. Hilton Worldwide opened its first international sales offices in Beijing and Shanghai in 2005, so we have teams in the market who really understand the travelers and communicate regularly with government travel agencies and tour operators. With Hilton Huanying, for example, we invited many of the tour operators to participate in the global launch events in San Francisco, Beijing, and Shanghai.

Our brand also has an aggressive marketing campaign in China, offers a Chinese version of our consumer site (www.hilton.com.cn) and recently launched a Chinese version of our global press site (www.hiltonglobalmediacenter.com.cn) as a resource for Chinese media

QUESTION

How do Hiltons china operations differ from its operations elsewhere?

Consider a T­bill with a rate of return of 5% and the following risky securities:

Security A: E(r) = 0.15; Standard deviation= 0.2

Security B: E(r) = 0.10; Standard deviation= 0.15

Security C: E(r) = 0.17; Standard deviation= 0.28

Security D: E(r) = 0.13; Standard deviation= 0.25

If an investor wants to use the risk-free asset and one of the risky assets to form a complete portfolio, which risky asset should the investor choose?

Group of answer choices

Security B

Security D

Security C

Security A

In any given year, an insurance company believes the following:

-0.6 of drivers are safe.

-0.25 of safe drivers wear seatbelts

-0.10 of unsafe drivers wear seatbelts

-0.10 of safe drivers experience an accident in a year

-0.20 of unsafe drivers experience an accident in a year

-Given a driver experiences an accident, the driver has probability 0.01 they will be taken to the hospital if they were wearing a seatbelt

-Given a driver experiences an accident, the driver has probability 0.2 they will be taken to the hospital if they were not wearing a seatbelt

Given that a driver is taken to the hospital, what is the probability they were not wearing a seatbelt?

Suppose a math teacher takes a sample of 169 students and calculates their mean math test score to be 78. suppose it is known that the test score is distributed normally with standard deviation of 9.

a. Give 90% confidence interval for u, the population mean, for the average math test score.

b. Interpret the interval in part a. in terms of the problem.

c. what is the value of z for a 98% confidence interval?

d.What is the value of z for 96% confidence interval?

e. How many students must be sampled in order to estimate u within +- 0.2 degree with 90% confidence?