1. Coquitlam Builders is a medium size home construction company. It wants to test the hypothesis that the average size of a new home unit exceeds 2,400 square feet. A random sample of 36 newly constructed homes had a mean of 2,510 square feet. Assume that the standard deviation of the size for all newly constructed homes is 480 square feet. Toll Brothers would like to set α = 0.02. Using the confidence interval approach, what is the decision in this case?

5. The ticketing agency of the Vancouver Whitecaps football team would like to test the hypothesis that the average price of a ticket is less than $225 on the secondary market. A random sample of 40 customers paid an average of $207 for their ticket. Assume that the standard deviation of the price of tickets for Whitecaps games is $43. The Vancouver Whitecaps would like to set α = 0.01. Use the p value approach to test this hypothesis. What will be your decision? (3 points)

The Charming City Construction Company is considering six projects. The projects, the number of supervisors and the number of workers required for each project, and the expected profits for each project are given below.

Project

1 2 3 4 5 6

________________________________________________________________

Supervisors Required 5 4 6 3 4 2

Workers Required 15 24 35 22 26 32

Profit (in thousands of dollars) 210 290 330 240 300 200

The objective is to maximize the company's total expected profit subject to the following constraints:

- Use no more than 20 supervisors

- Use no more than 108 workers

- If project 4 is done, then project 2 must be done and vice versa

- At least four projects are to be done.

Formulate a capital budgeting integer optimization problem by defining

(a) The decision variables

(b) The objective function. What does it represent?

(c) All the constraints. What does each constraint represent?

You plan to invest $4 million in the construction of an oil well which has a potential revenue of $10 million. The oil well will be located in the Golf of Mexico. As we all know, this region is constantly hit by hurricanes. Assuming that if there is a hurricane of category 1 or 2, this will disrupt your production and the well will produce half its capacity, and if there is a category 3 or 4, your well will produce one fifth of its capacity, if there is a category 5 your well will be closed. In order to reduce the risk on your investment you plan to buy an insurance policy. One unit of this policy cost $1 and will pay $3 if the region is hit with a storm of category 1 or 2, $5 if the region is hit with a storm of category 3 or 4, and $7 if the region is hit by a storm of category 5. We know from the weather prediction that there is 20% chance that the region will be hit with a category 1 or 2 storm, 20% for a category 3, or 4, and 20% for a category 5, 40% chance that the region will not be hit.

1. What is the expected rate of return on your investment if you buy u units of this policy?

2. What is the variance of the rate of return on your investment if you buy u units of this policy?

3. What is the number of units that will minimize variance, and what is the corresponding rate of return?

A recent study examined the effects of carbon monoxide exposure on a group of construction workers. The following table presents the numbers of workers who reported various symptoms, along with the shift (morning,  evening,  or night) that they worked.

Test the hypothesis of independence. Use the

=α0.01

level of significance and the P-value method with the TI-84 Plus calculator. What do you conclude?

Part 1 of 4

Your Answer is correct

State the null and alternate hypotheses.

H0

: The shift and reported symptoms ▼are independent.

H1

: The shift and reported symptoms ▼are not independent.This hypothesis test is a ▼right-tailed test.

Part 2 of 4

Your Answer is correct

Find the P-value. Round your answer to four decimal places.

The P-value is

.0014

.

Alternate Answer:

0.0014

Your audit client is in the construction industry. As such, the company has numerous fixed asset additions during the year, as well as a material expense for equipment rental. In your planning phase of the audit, you discover from conversations with the audit client's accounting personnel that there appears to be a lack of understanding on the correct accounting treatment for capital leases versus operating leases for equipment. Based upon this information, what relevant assertion(s) for fixed assets should you as the auditor be concerned about? Explain.

A recent study examined the effects of carbon monoxide exposure on a group of construction workers. The following table presents the numbers of workers who reported various symptoms, along with the shift (morning,  evening,  or night) that they worked.

Test the hypothesis of independence. Use the a=0.10

level of significance and the P-value method with the TI-84 Plus calculator.What do you conclude?

Part 1 of 4

Your Answer is correct

State the null and alternate hypotheses.

H0: The shift and reported symptoms ▼are independent.

H1: The shift and reported symptoms ▼are not independent.This hypothesis test is a ▼right-tailed test.

Part: 1 / 4

1 of 4 Parts Complete

Part 2 of 4

Find the P-value. Round your answer to four decimal places.

A construction company is purchasing a new Tractor for over the road use. The IRS classifies this as 3-year property. The truck costs $280000.

a) Determine the depreciation allowance for each year using SLN method.

Year 1 $

Year 2 $

Year 3 $

Year 4 $

b) Determine the depreciation allowance for each year using DDB method.

Year 1 $

Year 2 $

Year 3 $

Year 4 $

c) Determine the depreciation allowance for each year using MACRS.

Year 1 $

Year 2 $

Year 3 $

Year 4 $

d) Using a 10% MARR calculate the present worth of the depreciation for each of the 3 methods above.

PWa = $

PWb = $

PWc = $

A construction company plans to invest in new equipment to improve their productivity. The planned investment is $500,000 now and $100,000 in year 1.   The gross income for year 1 is $175,000, year 2 is $300,000, and year 3 is $600,000. Taxes related to the investment are $50,000 in year 1, $75,000 in year 2 and $100,000 in year 3.

Determine:

1. The before tax rate of return for the investment
2. The after-tax rate of return for the investment
3. How does the after-tax rate of return compare to the company’s MARR of 15%?

SHOW WORK AND DONT USE EXCEL

For the past year, you have been working as a secretary/ processor for a local construction company, XYZ Homes, which specializes in the building of low-cost, limited-option homes. You left a comfortable, good- paying job to work for XYZ because it was family- owned and operated by longtime friends.

Soon after you began working for XYZ, you noticed questionable behavior on the part of Mr. and Mrs. XYZ’s two sons, who are company salesmen. In fact, you are positive that they are falsifying documents to increase their commissions and to trick local banks into approving mortgages to customers who don’t meet credit standards.

You are trying to decide how to handle the situation when one of the sons approaches you and asks you to produce and sign a memo to a bank, falsely stating that a certain potential home buyer is credit worthy. You refuse to do so and, after much consideration, approach Mr. XYZ about the situation. To your surprise, he simply brushes off your comments as unimportant and laughingly states that “boys will be boys.”

What would you do in this situation? Is the fact that you correctly refused to produce and sign a false memo enough, or are you obligated to report these crimes to the banks and proper authorities? Discuss the options, responsibilities, and implications you are facing. ANSWER IN THREE PARAGRAPHS OR SO.

The mean time required to complete a certain type of construction project is 52 weeks with a standard deviation of 3 weeks. Answer questions 4–7 using the preceding information and modeling this situation as a normal distribution.

4. What is the probability of the completing the project in no more than 52 weeks? a) 0.25 b) 0.50 c) 0.75 d) 0.05

5. What is the probability of the completing the project in more than 55 weeks? a) 0.1587 b) 0.5091 c) 0.7511 d) 0.0546

6. What is the probability of completing the project between 56 weeks and 64 weeks? a) 0.2587 b) 0.3334 c) 0.5876 d) 0.0911

7. What is the probability of completing the project within plus or minus one standard deviation of the mean? a) 0.951 b) 0.852 c) 0.759 d) 0.683