Selected transactions for A. Mane, an interior decorator, in her first month of business, are as follows. Jan. 2 Invested $14,600 cash in business. 3 Purchased used car for $4,380 cash for use in business. 9 Purchased supplies on account for $730. 11 Billed customers $3,504 for services performed. 16 Paid $511 cash for advertising. 20 Received $1,022 cash from customers billed on January 11. 23 Paid creditor $438 cash on balance owed. 28 Withdrew $1,460 cash for personal use by owner.

The following frequency table summarizes the ages of 50 customers for both shopping stores,

50                                    50

1. Compute, the mean and standard deviation per customer age group for both shopping stores in excel
2. Distinguish the customers for each store per the results

1 a) List at least one (1) substitute for your product. Briefly (1 – 3 sentences) describe how the benefits of the substitute product are similar but not exactly the same as your product. What is the relative power of substitutes in the market?  In other words, is it relatively easy or hard for customers to migrate to a substitute market including going without or making the product oneself?

b) What does the market demand curve look like?  How would you describe the elasticity of demand? What is the relative power of customers in the market?

4. [5 marks] Suppose that Best Buy sells 4 TVs per day on average.

a) [1 marks] What is the probability that 8 TVs will be sold in a day?

b) [2 marks] What is the probability that fewer than 3 TVs (inclusive) will be sold in a day?

c) [2 marks] Suppose 5 customers enter Best Buy independently. The probability that a single customer will buy a TV is 0.1. What is the probability that at least one of these 5 customers buys a TV? Do not round your answer.

Consider this situation. Julie is the owner of an airport shuttle. The shuttle transports passengers between Bowling Green and the Nashville Airport. Most customers pay with cash because there is a big discount. Since she is old and spends most of the time in Florida, she hired Mark, as the only employee and driver. Julie is far away from Bowling Green, therefore she has to believe Mark unless there is an unambiguously clear evidence against Mark’s claim/report. Assume that Mark is rational (in economics, rational is synonymous with selfish) and he will always cheat on Julie if doing so is beneficial (increasing his monetary benefits).

     Julie is considering the following five possible compensation methods:

            I)           Pay Mark a flat salary (e.g., $3,500 each month)

            II)         Pay Mark an amount equal to reported revenue less fixed amount

             (e.g., reported revenue less $3,000; negative pay if reported revenue < $3,000)

            III)       Pay Mark a certain percent of sales (e.g., 30% of reported fares from passengers)

4. Pay Mark on an hourly basis (e.g., $25 per hour * Reported work hours)
5. Pay Mark based on the mileage (e.g., $0.30 for each mile added in the mileage gauge)
6. Pay Mark based on his efforts (how hard he works)

Julie is trying to find the best method in avoiding potential cheating by Mark.

Required:

A. Which of the following methods is the best one as far as the owner Julie is concerned? And why?

B. For each of the other 5 methods (the ones you did not choose in A), explain why it is not good for Julie.

Jan 1, Abi started a photography business. During January, the following transactions occurred and were recorded in the company's books:

Abi invested $13,700 cash in the business in exchange for common stock.

Abi contributed $22,000 of photography equipment to the business.

The company paid $2,300 cash for an insurance policy covering the next 24 months.

The company received $5,900 cash for services provided during January.

The company purchased $6,400 of office equipment on credit.

The company provided $2,950 of services to customers on account.

The company paid cash of $1,700 for monthly rent.

The company paid $3,300 on the office equipment purchased in transaction #5 above.

Paid $295 cash for January utilities.

Based on this information, the balance in the cash account at the end of January would be:

$44,050

$14,955

$19,300

$12,005

$15,650.

The Australian Competition and Consumer Commission (ACCC) has released a report stating that across all supermarkets in Australia, the percentage increase in prices approximately follows a normal distribution with a mean increase of 4.2% and standard deviation of 0.9%.

If 16 supermarkets are randomly chosen, what is the probability that the average percentage increase is between 4% and 5%.

Show all your calculations

Question 1 (4 points)

Calculate a 95% confidence interval of the mean expenditure of all male customers given that there were n = 131 males in the sample of 400, sample mean x = 50.1 and standard deviation s= 52.0.

Show all your calculations.

Question 2 (6 points)

Goodbuys is interested in determining the true proportion of all customers who rank the length of time they have to spend in queues as ‘excellent’. Given that 16.25% of the 400 customers who were surveyed gave a rating of ‘excellent’, calculate a 90% confidence interval for the true proportion.

Show all your calculations.

Interpret this confidence interval.

Question 3 (2 points)

State the assumptions you need to check before calculating the confidence interval in question 12.

Question 4 (4 points)

Suppose Goodbuy’s management want to know the true proportion of customers who rank the length of time they have to spend in queues as ‘excellent’ to within 3% with 95% confidence. How large a sample would need to be taken to achieve these requirements?

Show all your calculations.