The California Daily 3 lottery game is identical to the Pennsylvania Daily Number game describe in Example 15.15. The following table contains the observed distribution of all digits drawn in the California Daily 3 on the 200 days between May 14th, 2000, and November 29, 2000. Three digits are drawn each day, so the sample size is n = 600 for this table. (SHOW YOUR WORK)

table.
Digit    0   1   2   3 4   5 6   7   8 9
Count 49 61 64 62 50 64 59 65 63 63
(a) (3 points) State the null and alternative hypotheses using words and proper statistical notation.
(b) (1 point) Find the expected counts for each number, assuming each number is equally likely.
(c) (3 points) Calculate the chi-square goodness-of-fit statistic. Round your test statistic to two decimal places.
(d) (1 point) What are the degrees of freedom?
(e) (2 points) Find the p-value (Excel) and p-value range (Table).
(f) (2 points) Form a conclusion using the = 0:05 level of significance, and write it in the context of the
situation.

A businessman has an opportunity to invest in one of three mutually exclusive alternatives. The first alternative has a first cost of $7000, a uniform annual benefit of $2000, and a salvage value of $500. The second has a first cost of $3500, a benefit of $900 the first year, and increasing by $100 per year thereafter. Its salvage value is $400. The third alternative has a first cost of $8000, a benefit of $2000 the first year, and increasing by 2% each year thereafter. Its salvage value is $500. Assume all alternatives have a 10 year life, and the company’s MARR is 10%.

A) Use incremental rate of return analysis to determine which alternative is best. State the rates as percentages, formatted to two decimal places (i.e., xx.xx%).You can do this manually or using Excel… in either case, be sure to show all your work!

B) Plot the results on a graph for values of i from 0 – 50%, and construct a choice table. Assuming a MARR of 10%, which alternative would you choose?

C) Are the results from part “a” and “b” consistent? Briefly discuss… (in 1-2 sentences).

(if using excel please post code)

You are a manager at Das Köstliche Waffelhaus, a small food manufacturing firm specializing in the production of frozen waffles. The CEO of the company has asked you assess optimal profitability at one of your factories (factory A). Currently, factory A contains 3 AquaPruf series stainless steel conveyor systems for mixing and baking the waffles. These machines have an estimated monthly maintenance cost of $1500 each. Your firm also has an installed freezer system which costs $2000 per month total to operate. Labor is paid $2000 per month (each). Monthly unit production is approximately equal to 5000*L0.25 where L = the number of workers on the factory floor. Identify the optimal number of workers to hire and resulting production levels when the price per unit of waffles is $3.50, $5.00 and $6.50 (round to the nearest unit).

1. Journal & T Account

• June 3 Sold for $700 office equipment that had cost $2000 and has associated accumulated depreciation of $1,500

• June 7 Made sales of $2000 on credit; the cost of the inventory sold was $1200

• June 10 Purchased $1000 of inventory for cash

• June 15 Purchased new office equipment costing $4000 paying $1500 and signing a 90-day note for the balance

• June 16 Received check for June 7 credit sale

• June 17 Made cash sales of $4200; the cost of the inventory sold was $2300

• June 20 Purchased $2600 of inventory on credit

• June 24 Returned $200 of defective inventory from the June 20 purchase for a credit to its account

• June 29 Paid for the June 20 purchase minus the return

June 30 Paid the June utility bill, $210

As a prospective owner of a club known as the Red​ Rose, you are interested in determining the volume of sales dollars necessary for the coming year to reach the​ break-even point. You have decided to break down the sales for the club into four​ categories, the first category being beer. Your estimate of the beer sales is that 32000 drinks will be served. The selling price for each unit will average $ 1.50​; the cost is $ 1.25. The second major category is​ meals, which you expect to be 12000 units with an average price of $ 12.50 and a cost of $ 5.50. The third major category is desserts and​ wine, of which you also expect to sell 10000 ​units, but with an average price of $ 2.50 per unit sold and a cost of $ 1.00 per unit. The final category is lunches and inexpensive​ sandwiches, which you expect to total 22500 units at an average price of $ 6.00 with a food cost of $ 3.25. Your fixed cost​ (i.e., rent,​ utilities, and so​ on) is $ 2000 per month plus $ 2000 per month for entertainment.

​a) For Red​ Rose, the monthly​ break-even point in dollars​ = ​$ nothing per month ​(round your response to two decimal​ places).

b).What is the expected number of meals each day if you are open 30 days a month?

1. From the table below giving the quantity demanded of a commodity (Y), its price (X10, and consumer income (X2) from 1996 to 2015,

1. Find the least-squares regression equation of Y on X1 and X2 USING EXCEL’S DATA ANALYSIS TOOL.
2. Test at the 5 percent for the statistical significance of the slope parameters,
3. Find the adjusted and the adjusted coefficients of determination, and
4. Test at 5 percent level for the overall statistical significance of the regression.

Show all your results to three decimal places.

Colby Firestone Corporation is considering the purchase of a new machine to replace an old machine. The new machine will cost $135,000, has an installation cost of $5000, and will have an expected life of five years with a salvage value of $5,000. The new machine will require $2000 additional working capital. The new machine will result in a cost savings of $20,000 a year. Sales are expected to increase $9,000 per year. The old machine was purchased five years ago at a cost of $100,000 and has been depreciated on a (McSlim) straight-line basis with an expected life of ten years and a salvage value of $2000. The old machine can be sold for $50,000 today. The firm’s cost of capital is 9 percent, and its tax rate is 30 percent.

1. Modified Internal Rate of Return---Compute the Modified Internal Rate of Return. What does the Modified Internal Rate of Return tell us?
2. Should Colby Firestone Corporation purchase the new machine? Why or why not?
3. What is the reinvestment rate assumption for IRR? What is the reinvestment rate assumption for MIRR? Which do you think is a better assumption? Why?
4. What is Depreciation in accounting and capital budgeting? Depreciation is an expense method.
5. What is McSlim? What does each letter mean?

Assume you wish to purchase a property for $400,000 and you are evaluating two mortgage choices. You are only able to afford a 10% downpayment, so you have the following options. The first option is a 4.75% fully amortizing, monthly payment, fixed rate loan for 30 years with $2000 in origination fees and no points. This loan is for 90% of the purchase price.

Alternatively, you can borrow 80% of the purchase price at a rate of 3.875%, with $4000 in closing costs. In order to cover the remaining 10%, you will need to take out a 2nd mortgage with an interest rate of 6.5%, and additional closing costs of $2000. The second mortgage is interest only for the first 5 years, and becomes fully amortizing after that. Both loans are for 30 years, and have fixed rates.  

A. What is the payment on the first loan?

B. What is the effective rate on the first loan if it is held for the entire 30 years?

C. What is the payment on the 80% loan that is the first part of the second loan package if it is held for the entire 30 years?

D. What is the payment on the 10% loan that is the second part of the second loan package if it is held for the entire 30 years?

E. What is the effective rate on the entire second loan package if it is held for the entire 30 years?

An article considered regressing y = 28-day standard-cured strength (psi) against x = accelerated strength (psi). Suppose the equation of the true regression line is  y = 1900 + 1.4x,

and that the standard deviation of the random deviation ϵ is 350 psi.

(a)

What is the probability that the observed value of 28-day strength will exceed 5000 psi when the value of accelerated strength is 2000? (Round your answer to four decimal places.)

(b)

What is the probability that the observed value of 28-day strength will exceed 5000 psi when the value of accelerated strength is 2500? (Round your answer to four decimal places.)

(c)

Consider making two independent observations on 28-day strength, the first for an accelerated strength of 2000 and the second for

x = 2500.

What is the probability that the second observation will exceed the first by more than 1000 psi? (Round your answer to four decimal places.)

(d)

Let Y₁ and Y₂ denote observations on 28-day strength when x = x₁ and x = x₂, respectively. By how much would x₂ have to exceed x₁ in order that P(Y₂ > Y₁) = 0.95?(Round your answer to two decimal places.)

The next 5 questions (11-15) can be answered using the following information:

C(Y-T) = 125 + 0.75(Y-T)

I = 200 – 10r

G=150

T = 100

Ms= 800

Md= 0.8Y – 16r

Assume that the full-employment level of output equals 1,600

1. Calculate the IS curve
   1. r=40-0.025Y
   2. Y=1600-40r
   3. r=50-0.75Y
   4. a and b
   5. None of the above

2. Calculate the short-run equilibrium for this economy
   1. Y*=1200 and r*=15
   2. Y*=2000 and r*=10
   3. Y*=2000 and r*=15
   4. Y*=1200 and r*=10
   5. None of the above

3. Suppose that there is expansionary fiscal policy and G increases to G’=250. The new equilibrium is given by
   1. Y*=1200 and r*=15
   2. Y*=1333,3 and r*=10
   3. Y*=1333,3 and r*=16.7
   4. Y*=1000 and r*=20
   5. None of the above

4. What is the size of the fiscal policy multiplier?
   1. 2.33
   2. 1.5
   3. 4
   4. 1.33
   5. None of the above

5. What is the level of the long-run equilibrium in this economy?
   1. Y*=1600 and r*=15
   2. Y*=1200 and r*=10
   3. Y*=1600 and r*=10
   4. Y*=1000 and r*=20
   5. None of the above