The Ajax Company just bought a new machine that makes boots. In a random sample of forty boots produced by the new machine, they find that the mean weight is 1550 grams with a standard deviation of 210 grams. Their old machine produced boots with a true mean weight of 1450 grams. (Answer all 4 parts)
Find a 95% confidence interval for the true mean weight using the new machine. Interpret the confidence interval in context.
Find the error bound of the above interval.
Is there evidence that the true mean weight for the new machine is different than that of the old machine? Justify!
In: Statistics and Probability
The Federal Aviation Administration is a government agency that is in charge of air traffic control. All of the capital equipment (radar, etc.) used by air traffic controllers is purchased through appropriations from Congress. When Apple Corporation purchases new capital equipment, the decision is made by owners and managers that believe the firm can get a return on investment from the new capital because the new capital can be used to produce new and improved goods for Apple customers.
Which entity is likely to have more outdated and rundown capital? Why? Explain in detail.
In: Economics
Niekro Movie Theaters plans to buy projection equipment costing $880,000. In connection with this transaction, old equipment having a book value of $140,000 will be sold for $210,000. Annual cash flow returns from this new investment are estimated at $370,000 before taxes. Depreciation on the new equipment will be $88,000 each year for the next 10 years. No salvage value is expected on this new equipment. No further depreciation can be taken on the old equipment that will be sold. The income tax rate is 30 percent.
Using a discount rate of 20 percent, compute the NPV of the new investment: $ ______________
In: Accounting
Suppose that you are thinking about buying a car and have narrowed down your choices to two options.
The new car option: the new car costs $26,000 and can be financed with a four-year loan at 7.54%.
The used car option: a three-year old model of the same car costs $14,000 and can be financed with a three-year loan at 7.07%.
What is the difference in monthly payments between financing the new car and financing the used car? Use PMT formula
The difference in monthly payments between financing the new car and financing the used car is $____.
In: Finance
Suppose the market for bottled water is competitive and is characterized by the following demand and supply conditions. The inverse demand and supply curves are depicted below.
Demand: QD = 400 – 100 P
Supply: QS = 280 + 20 P (for P > 0)
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Price: |
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Quantity: |
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Consumer surplus: |
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Producer surplus: |
Suppose in anticipation of an approaching hurricane, demand rises to QD = 800 – 100 P. What will happen in the market, including welfare effects, as measured by consumer and producer surplus?
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New price: |
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New quantity: |
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New consumer surplus: |
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New producer surplus: |
In: Economics
1. Are the following capital budgeting or financing decisions?
A. Intel decides to spend $1 billion to develop a new microprocessor.
B. Avon spends $200 million to launch a new range of cosmetics in US markets.
C. Pfizer issues new shares to buy a small biotech company.
D. Toyota borrows 350 million yen from Bank of Tokyo.
2. Would the following activities increase or decrease the firm’s cash balance?
A. Inventories are increased.
B. Accounts payable are decreased.
C. Additional common stock issued.
D. New equipment is purchased.
In: Finance
In: Accounting
You are completing a software development project. This project is expected to add SIX new features to a popular software program you sell to customers. The projected cost for the project is $100,000 and the development is expected to take 5 weeks. At the end of the second week, you spent $17,500 per new software feature and you completed the development of two new features. You are about to start the development of the third new software feature. Based on this information find the BAC, PV, EV, and AC. Please show how you came up with answer.
In: Operations Management
Suppose that a company's equity is currently selling for $24.75 per share and that there are 3.3 million shares outstanding and 13 thousand bonds outstanding, which are selling at 94 percent of par. If the firm was considering an active change to their capital structure so that the firm would have a D/E of 0.6, which type of security (stocks or bonds) would they need to sell to accomplish this, and how much would they have to sell? (Round your intermediate ratio to 4 decimal places.)
$20,051,213 in new equity
$23,035,265 in new debt
$23,035,265 in new equity
$20,051,213 in new debt
In: Finance
Question text
Determining
the Cost of an Asset
Omar Corporation paid $400,000 for a tract of land that had an old
gas station on it. The gas station was demolished at a cost of
$20,000 and a new warehouse was constructed on the site at a cost
of $640,000.
In addition, several other costs were incurred:
| Legal fees (associated with the purchase of the land) | $45,000 |
| Architect fees (associated with the new warehouse) | $50,000 |
| Interest on the construction loan (for the new warehouse) |
$24,000 |
(a) What value should be assigned to the tract of land?
$Answer ?
(b) What value should be assigned to the new warehouse?
$Answer ?
In: Accounting