Question 1

1. Data collected (including the normalized values) by a riding mower manufacturer on its existing customers are listed below.

   Customer ID	Income	Lot_Size	Normalized Income	Normalized Lot_Size	Ownership
   1	61.5	20.8	-0.351	0.762	Owner
   2	82.8	22.4	0.726	1.421	Owner
   3	52.8	20.8	-0.790	0.762	Nonowner
   4	84	17.6	0.786	-0.556	Nonowner
   5	63	14.8	-0.275	-1.709	Nonowner

   The riding mower manufacturer wants to classify a new customer (data given below) as either an owner or a nonowner using k-Nearest Neighbors method.

   Income	Lot_Size	Normalized Income	Normalized Lot_Size
   81	20	0.635	0.532

   Round your answers to 3 digits after the decimal point.

   The Euclidean distance between the new customer and Customer 1 is?

   The Euclidean distance between the new customer and Customer 2 is?

   The Euclidean distance between the new customer and Customer 3 is?

   The Euclidean distance between the new customer and Customer 4 is?

   The Euclidean distance between the new customer and Customer 5 is?

   The new customer should be classified as?(owner or nonowner?) if k is set to 3.

QUESTION 28

1. Current evidence indicates the first humans infected with HIV lived in

   		a. Haiti
   		b. Indonesia
   		c. Africa
   		d. San Francisco

2 points   

QUESTION 29

1. If nondisjunction occurs in one chromosome pair in meiosis I during gametogenesis, what will be the result at the completion of meiosis?

   		a. All the gametes will be diploid.
   		b. Half of the gametes will have an extra chromosome, and half will be missing one.
   		c. There will be three extra gametes
   		d. Two of the four gametes will be haploid, and two will be diploid.

2 points   

QUESTION 30

1. What is the reason that alleles of linked genes are usually inherited together?

   		a. They are located close together on the same chromosome.
   		b. The number of genes in a cell is greater than the number of chromosomes.
   		c. Chromosomes are unbreakable.
   		d. Alleles are paired together during meiosis.

2 points   

QUESTION 31

1. This is the pedigree of a family with dry earwax syndrome, a single gene trait. Individuals with dry earwax often need professional flushing of the ear canals to avoid blockage. Individuals with dry earwax also have less body odor, and are less likely to get breast cancer. Affected individuals are colored circles and squares. Open circles and squares indicate those with normal wet earwax. Based on the pedigree, does this dry earwax appear to be dominant or recessive?

   		a. Dominant: Almost half the family has it
   		b. Recessive: Mostly boys are affected
   		c. Dominant: Every affected parent has an affected child
   		d. Recessive: Unaffected parents can have an affected child

2 points   

QUESTION 32

1. Which of the following is an example of a genotype?

   		a. Blood type O
   		b. Curly hair
   		c. Dwarfism is defined as an adult 4’ 10” or shorter
   		d. Someone has two copies of the allele for brown eyes, BB

2 points   

QUESTION 33

1. In the table above, what does the word “stop” mean?

   		a. The ribosome will stop and release the completed peptide
   		b. The RNA polymerase will stop transcribing the gene
   		c. Mutations will not occur here
   		d. Primary transcript modification stops

2 points   

QUESTION 34

1. Which of the following does not occur in prokaryotic gene expression, but does in eukaryotic gene expression?

   		a. mRNA, tRNA, and rRNA are transcribed.
   		b. RNA polymerase binds to the promoter.
   		c. A poly-A tail is added to the 3' end of an mRNA and a cap is added to the 5' end.
   		d. Transcription can begin as soon as translation has begun even a little.

2 points   

QUESTION 35

1. Small nuclear RNAs, or snRNAs, have several functions including:

   		a. Preventing translation of mRNAs
   		b. Preventing transcription of new mRNAs
   		c. Cutting out introns during RNA processing
   		d. Preventing the DNA from unwinding

2 points   

QUESTION 36

1. This pedigree is for a family with Marfan syndrome. Marfan syndrome causes abnormal skeletal growth, long limbs, excessive height and sometimes heart defects. Dark-colored symbols are individuals affected with the disease, light symbols are phenotypically normal. Squares are males, circles are females. Using the pedigree, does Marfan syndrome look like it is dominant or recessive?

   		a. Dominant
   		b. Recessive
   		c. Co-dominant
   		d. Not enough information given

2 points   

QUESTION 37

1. Which enzyme catalyzes the elongation of a DNA strand in the 5' → 3' direction?

   		a. primase
   		b. DNA ligase
   		c. DNA polymerase
   		d. Topoisomerase

Waterways puts much emphasis on cash flow when it plans for capital investments. The company chose its discount rate of 8% based on the rate of return it must pay its owners and creditors. Using that rate, Waterways then uses different methods to determine the best decisions for making capital outlays. This year Waterways is considering buying five new backhoes to replace the backhoes it now has. The new backhoes are faster, cost less to run, provide for more accurate trench digging, have comfort features for the operators, and have 1-year maintenance agreements to go with them. The old backhoes are working just fine, but they do require considerable maintenance. The backhoe operators are very familiar with the old backhoes and would need to learn some new skills to use the new backhoes. The following information is available to use in deciding whether to purchase the new backhoes. Old Backhoes New Backhoes Purchase cost when new $88,700 $199,857 Salvage value now $42,100 Investment in major overhaul needed in next year $55,986 Salvage value in 8 years $15,000 $91,000 Remaining life 8 years 8 years Net cash flow generated each year $30,100 $43,700 Click here to view PV table. (a) Evaluate in the following ways whether to purchase the new equipment or overhaul the old equipment. (Hint: For the old machine, the initial investment is the cost of the overhaul. For the new machine, subtract the salvage value of the old machine to determine the initial cost of the investment.) (1) Using the net present value method for buying new or keeping the old. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round final answer to 0 decimal places, e.g. 5,275.) New Backhoes Old Backhoes Net Present Value $ $ Waterways should equipment. (2) Using the payback method for each choice. (Hint: For the old machine, evaluate the payback of an overhaul.) (Round answers to 2 decimal places, e.g. 1.25) New Backhoes Old Backhoes Payback Period years years Waterways should equipment. (3) Comparing the profitability index for each choice. (Round answers to 2 decimal places, e.g. 1.25) New Backhoes Old Backhoes Profitability Index Waterways should equipment. Calculate the internal rate of return factor for the new and old blackhoes. (Round answers to 5 decimal places, e.g. 5.27647.) New Backhoes Old Backhoes IRR Factor (4) Comparing the internal rate of return for each choice to the required 8% discount rate. Waterways should equipment.

College administrators want to know if students would be willing to pay a new fee if most of it would be budgeted for Student Activities. A random sample of 632 students resulted in 516 that would be willing to pay the new fee. Construct a 90% Confidence Interval estimate for the proportion of students willing to pay the new fee.

The ability to tap the capital markets as a new source of debt capital provided commercial and residential property owners with a new source of capital beyond traditional balance sheet lenders like life companies and banks and provided debt investors with a new structured-finance investment secured by real estate.

True

False

FUTURE OF REVENUE RECOGNITION

I. Do the new standards increase comparability across industries and capital

markets?

II. Do the new standards provide better disclosure, so investors and other

users of financial statements better understand the economics behind the

numbers?

III. Possibility of Fraud with new FASB standards

In the RSA public-key encryption scheme, each user has a public key, e, and a private key, d. Suppose Alice leaks her private key. Rather than generating a new modulus, she decides to generate a new public key and a new private key. Is this safe? why or why not?

Assume Broncoland has the following aggregate demand (AD) and short-run aggregate supply (SRAS) schedules.

With the information in the table above in mind, complete and answer the following:

By hand, using pen(cil) and paper, graph the aggregate demand and short-run aggregate supply curves. Be sure to use the following labels:

Label the aggregate demand curve AD and the short-run aggregate supply curve SRAS.

Label the y-axis, PL (for the price level) and the x-axis either RGDP or Y.

What is the equilibrium price level and equilibrium output?

Assume the aggregate quantity demanded increases 900 at every price level. Graph the original and new aggregate demand curves as well as the short-run aggregate supply curve. Label the new aggregate demand curve AD2. What happened to the new equilibrium price and output when aggregate demand increased?

List three factors that would cause aggregate demand to increase.

Go back to the original values for aggregate demand and short-run aggregate supply. Suppose the aggregate quantity supplied decreases 1,100 at every price level. Graph aggregate demand, the original short-run aggregate supply, and the new short-run aggregate supply. What happened to the new equilibrium price and output when short-run aggregate supply decreased?

List three factors that would cause short-run aggregate supply to decrease, and explain why you selected the factors you chose.

Return to the original values of aggregate demand and short-run aggregate supply. Assume the long-run full-employment level of output (often called either potential GDP or the natural rate of output) is equal to 8800. Graph aggregate demand, short-run aggregate supply, and long-run aggregate supply. Remember to label the curves. Also, remember that if the economy is operating at the full-employment level of output, the unemployment rate is equal to the natural rate of unemployment, and the economy experiences full employment of resources.

Return to the original values of aggregate demand and short-run aggregate supply. Assume potential GDP decreases to 7,000. Graph the aggregate demand curve, short-run aggregate supply, and the new potential GDP. Be sure to describe where the economy is operating in the short-run relative to where we want the economy to operate. Is the economy operating at full-employment? Is the unemployment rate greater or less than the natural rate of unemployment?

Inflationary Gaps

An inflationary gap exists when the economy is producing a level of output greater than Potential GDP. With an inflationary gap, the short-run level of output produced in the economy is not sustainable. It is greater than Potential GDP; we are operating outside our production possibilities frontier.

There are shortages of labor and other resources. These shortages of labor and other resources cause nominal wages and other resource prices to increase. This increases production costs, causing the short-run aggregate supply curve to decrease. The short-run aggregate supply curve will continue to decrease until long-run equilibrium is reached where AD = SRAS = LAS.

With that information in mind, do the following:

Return to the original value of aggregate demand and short-run aggregate supply. Assume long-run aggregate supply increases to 9,500. Graph aggregate demand, short-run aggregate supply, and the new long-run aggregate supply. Remember to label each of the parts of your graph. You should also describe where the economy is operating in the short-run relative to where we want the economy to operate. Is the economy operating at full-employment? Is the unemployment rate greater or less than the natural rate of unemployment?

Graph an inflationary gap. Graph the decrease in short-run aggregate supply that will move the economy back to long-run equilibrium. Label the second short-run aggregate supply curve SRAS2.

Recessionary Gaps

A recessionary gap exists when the economy is producing a level of output less than potential GDP. If either an inflationary gap or a recessionary gap exists, the economy does not achieve full employment of resources. Classical School economists believe the economy has a self-correcting mechanism, a natural adjustment process that will take place to move the economy back to long-run equilibrium without any type of government interference.

With a recessionary gap, the short-run level of output produced in the economy is less than the full-employment level of output. We are operating inside our production possibilities curve, and labor and other resources are unemployed. Because there is a surplus of labor and other resources, nominal wages and other resource prices fall. This will decrease production costs, increasing the short-run aggregate supply curve.

With that information in mind, do the following:

Graph a recessionary gap. Graph the increase in short-run aggregate supply that will move the economy back to long-run equilibrium. Label the second short-run aggregate supply curve SRAS3.

OpenSeas, Inc., is evaluating the purchase of a new cruise ship. The ship would cost $400 million today. OpenSeas expects annual cash flows from the new ship to be $70 million and these cash flows will last forever. The cost of capital is 16%.

What is the IRR of the new cruise ship? Please make your answer in the unit of percent.

______%

Following question 4, suppose the company has a desired payback period of 5 years.

Which statement is true about applying the payback method to the new project?