Please give us one example from your research, work, or personal life of an application whilw Describing what concepts of Financial Economics and the contexts within which it is practiced. Describe the elements of financial statement analysis and how they are applied Explain the principles of Finance Describe how these principles apply in managerial and economic contexts.

1. Your friend Nigel is a management graduate and therefore has little chance of finding a job outside the fast-food industry. Luckily for him, Nigel's rich uncle has left him $20 million in his will. Having been a management student, Nigel partied while you studied. In fact, he took no courses in finance and thus knows nothing about investment. In a drunken stupor, late one Saturday night Nigel watched an interview with the Guru Jack ma. The Guru claims material wealth lies beneath the ground in Melbourne. It is clear from the tone of the interview, the title of the documentary was "An interview with a crackpot," that the interviewer and the "experts" on the show think the Guru is insane. However, Nigel believes in the Guru because his management training taught him to believe in gurus (Peter Drucker, for example). Nigel decides to use his new-found fortune to prove the Guru correct, making himself one of the richest people in Australia in the process! Nigel knows you have superior intellect (otherwise you wouldn't be in Finance) and asks you to work out the details. After some discreet investigation you find the homes and land can be purchased for $15 million. In addition, the local council insist on a $4 million fee for defacing the views from the city. Finally, it costs $1 million to lease the mining equipment. You and Nigel meet with the Guru and after several hours of meditation the Guru provides you with estimated annual after-tax cash-flows. These cash-flows are in millions and are provided to you below in table 2-1. Nigel thinks the cash-flows sound fantastic (compared to a career flipping burgers. Who wouldn't), you however decide to check the numbers using what you have learned in Finance. You believe the project is very risky and therefore in consultation with Westpac Bank Risk Management team decide to use a discount rate of 23%.

1. Should Nigel invest his fortune based on the crackpot's ideas?

2. Would your decision change if you used a discount rate of 18% or 10% ? Support the answer with the NPV and IRR.

              Table 2-1

               Projected Cash Flows

Shamrock Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Shamrock and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2021, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two $35,170 notes, which are due on June 30, 2021, and September 30, 2021. Another note of $6,020 is due on March 31, 2022, but he expects no difficulty in paying this note on its due date. Brown explained that Shamrock’s cash flow problems are due primarily to the company’s desire to finance a $300,530 plant expansion over the next 2 fiscal years through internally generated funds.

The commercial loan officer of Topeka National Bank requested the following financial reports for the last 2 fiscal years.

(a)

Compute the following items for Shamrock Corporation. (Round answers to 2 decimal places, e.g. 2.25 or 2.25%.)

1. Results of the Youth Risk Behavior Surveillance Survey indicate that 15% of young adults are heavy drinkers, 65% are moderate drinkers, and 20% are non-drinkers. The University of South Dakota conducts its own survey, and finds the following:      

Is the distribution of alcohol consumers on the University of South Dakota campus approximately normal? Use α = .05 as your level of significance.

An instructor at a major research university occasionally teaches summer session and notices that that there are often students repeating the class. Out of curiosity, she designs a random sample of students enrolled in summer sessions and counts the number repeating a class. She counts 105 students in the sample, of which 19 are repeating the class. The university enrolls 15,000 students.

A 95% confidence interval is given by:

(0.09, 0.272).

(0.107, 0.255).

(0.15, 0.23).

(0.345, 0.453).

In each of the following sets of variables, which are likely candidates to be treated as independent and which as dependent within a research study?

• Gender, alcohol consumption, and driving record In the following set of variables

• High school GPA (grade point average), university freshman year GPA, choice of university major (selected before enrollment), race/ethnicity, and gender

• Age, race/ethnicity, smoking habits, and occurrence of breast cancer

Explain each answer please.

The following selected transactions relate to investment activities of Ornamental Insulation Corporation. The company buys securities, not intending to profit from short-term differences in price and not necessarily to hold debt securities to maturity, but to have them available for sale when circumstances warrant. Ornamental’s fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2015. 2016 Feb. 21 Acquired Distribution Transformers Corporation common shares costing $530,000. Mar. 18 Received cash dividends of $10,000 on the investment in Distribution Transformers common shares. Sep. 1 Acquired $1,290,000 of American Instruments' 10% bonds at face value. Oct. 20 Sold the Distribution Transformers shares for $565,000. Nov. 1 Purchased M&D Corporation common shares costing $2,050,000. Dec. 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are: American Instruments bonds $ 1,243,000 M&D Corporation shares $ 2,123,000 (Hint: Interest must be accrued for the American Instruments’ bonds.) 2017 Jan. 20 Sold the M&D Corporation shares for $2,148,000. Mar. 1 Received semiannual interest of $64,500 on the investment in American Instruments bonds. Aug. 12 Acquired Vast Communication common shares costing $780,000. Sept. 1 Received semiannual interest of $64,500 on the investment in American Instruments bonds. Dec. 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are: Vast Communication shares $ 800,000 American Instruments bonds $ 1,223,000 Required: 1. Prepare the appropriate journal entry for each transaction or event during 2016. 2. Indicate any amounts that Ornamental Insulation would report in its 2016 balance sheet and income statement as a result of these investments. 3. Prepare the appropriate journal entry for each transaction or event during 2017. 4. Indicate any amounts that Ornamental Insulation would report in its 2017 balance sheet and income statement as a result of these investments.

What is the total tax due for 2020, for Stuart, assuming that he earned 20,000 in wages, earned 24,000 in self-employment income from his first business, had a loss of 10,000 from his second business, received 3,000 of interest income, and had 5,100 in nonqualified dividend income?

Blue Department Store converted from the conventional retail method to the LIFO retail method on January 1, 2020, and is now considering converting to the dollar-value LIFO inventory method. During your examination of the financial statements for the year ended December 31, 2021, management requested that you furnish a summary showing certain computations of inventory cost for the past 3 years.

Here is the available information.

Compute the cost of inventory on hand at December 31, 2019, based on the conventional retail method. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987)

Compute the inventory to be reported on December 31, 2019, in accordance with procedures necessary to convert from the conventional retail method to the LIFO retail method beginning January 1, 2020. Assume that the retail value of the December 31, 2019, inventory was $60,900. (Round ratios for computational purposes to 2 decimal places, e.g. 78.72% and final answer to 0 decimal places, e.g. 28,987.)

Without prejudice to your solution to part (b), assume that you computed the December 31, 2019, inventory (retail value $60,900) under the LIFO retail method at a cost of $36,845. Compute the cost of the store’s 2020 and 2021 year-end inventories under the dollar-value LIFO method. (Round ratios for computational purposes to 2 decimal places, e.g. 78.72% and final answer to 0 decimal places, e.g. 28,987.)

The worldwide market share for a web browser was 20.1​% in a recent month. Suppose that a sample of 100 random students at a certain university finds that 25 use the browser.

A. At the 0.05 level of​ significance, is there evidence that the market share for the web browser at the university is greater than the worldwide market share of 20.1​%?

Determine the null and alternative hypotheses.

Calculate the test statistic.

The​ p-value is

State the conclusion of the test.

B. Suppose that a sample of n=400 students at the same university​ (instead of n=100​) determines that 25​% of the sample use the web browser. At the 0.05 level of​ significance, is there evidence that the market share for the web browser at the university is greater than the worldwide market share of 20.1​%?

Calculate the test statistic for the second sample.

What is the​ p-value for the second​ sample?

The​ p-value is

State the conclusion of the test using this second sample at the 0.05 level of significance.

C. Compare the results of​ (a) and​ (b) and discuss the effect that sample size has on the​ outcome, and, in​ general, in hypothesis testing.

D. What do you think are your chances of rejecting any null hypothesis concerning a population proportion if a sample size of n=20 is​ used?

The likelihood of rejecting a null hypothesis with N=20 is relatively ( HIGH OR LOW)