You need a particular piece of equipment for your production process. An equipment-leasing company has offered to lease the equipment to you for $10,600 per year if you sign a guaranteed 5 -year lease (the lease is paid at the end of each year). The company would also maintain the equipment for you as part of the lease. Alternatively, you could buy and maintain the equipment yourself. The cash flows from doing so are listed below (the equipment has an economic life of 5 years). If your discount rate is 7.9% , what should you do?

Select one:

a.

The NPV of the leasing alternative is -$53,000. The NPV of the purchase alternative is -$53,500. Choose the leasing alternative because it has the lowest NPV.  

b.

The NPV of the leasing alternative is -$53,000. The NPV of the purchase alternative is -$53,500. Choose the buying alternative because it has the highest NPV.  

c.

d.

The NPV of the leasing alternative is -$42,435. The NPV of the purchase alternative is -$51,108. Choose the buying alternative because it has the highest NPV.  

e.

The NPV of the leasing alternative is -$42,435. The NPV of the purchase alternative is -$51,108. Choose the leasing alternative because it has the lowest NPV.  

The quarterly returns for a group of 58 mutual funds with a mean of 3.4​% and a standard deviation of 4.3​% can be modeled by a Normal model. From these​ funds, find the cutoff return​ value(s) that would separate the ​

a) highest 30​%.

​b) lowest 40​%.

​c) middle 60​%.

​d) highest 60​%.

​a) Select the correct choice and fill in any answer boxes in your choice below. ​(Round to two decimal places as​ needed.)

A. nothing​%less thanxless than nothing​%

B. xgreater than nothing​%

C. xless than nothing​% ​

b) Select the correct choice and fill in any answer boxes in your choice below. ​(Round to two decimal places as​ needed.)

A. xless than nothing​%

B. xgreater than nothing​%

C. nothing​%less thanxless than nothing​%

​c) Select the correct choice and fill in any answer boxes in your choice below. ​(Round to two decimal places as​ needed.)

A. xgreater than nothing​%

B. nothing​%less thanxless than nothing​%

C. xless than nothing​%

​d) Select the correct choice and fill in any answer boxes in your choice below. ​(Round to two decimal places as​ needed.)

A. nothing​%less thanxless than nothing​%

B. xgreater than nothing​%

C. xless than nothing​%

Please, provide detailed explanation.

5.Bristol-Myers Squibb Company (stock ticker is BMY) is expected pay a dividend of $1.86 per share at the end of this year and a $1.92 per share at the end of the second year. Immediately after Bristol-Meyers Squibb pays the $1.92 per share dividend at the end of the second year, you expect its stock price to be $62.10 per share. Bristol-Meyers Squibb's cost of equity capital is 13% per year.

a. What is the most that an investor would be willing to pay today for a share of Bristol-Meyers Squibb stock if the investor plans to hold the stock for two years? The highest price the investor should pay is: ????

b. What is the most that an investor would be willing to pay today for a share of Bristol-Meyers Squibb stock if the investor plans to hold the stock for twenty years? The highest price the investor should pay is: ????

c. At the end of the second year (e.g., at time t=2), immediately beforeBristol-Meyers Squibb pays the $1.92 per share dividend, at what price would you expect shares of Bristol-Meyers Squibb stock to be selling? Immediately before the time t=2 dividend is paid, a share of Bristol-Meyers Squibb stock should be selling for: ????

Carmel Inc. started the business year with 200 units of inventory that cost a total amount of $34,000 (all units were purchased for the same price). During the year, the company entered into the following transactions:

1 .Purchasing on Feb 1st an additional 200 units for the price of 180 each.

2 .Purchasing on April 15th an additional 70 units for the price of 210 each.

3 .Purchasing on November 1st an additional 110 units for the price of 260 each.

4 .Selling on October 1st, 450 units for the total amount of $2,000,000.

Required:

A. Compute the cost of ending inventory and COGS assuming FIFO (Using the periodic or the perpetual method.

B. Compute the cost of ending inventory and COGS assuming LIFO and using the periodic method.

C. Compute the cost of ending inventory and COGS assuming LIFO and using the perpetual method.

D. Compute the cost of ending inventory and COGS assuming Average Cost and the periodic method.

E. When prices are rising, which method will result in:

1. Highest gross profit?

2. A more accurate (i.e., closer to replacement cost) ending balance of Inventory on the balance sheet?

3. Highest pre-tax earnings, which lead to higher tax payments?

4. A more accurate (i.e., closer to economic profit) net income?

Consider a small town, with two restaurants: a tapas bar and a bistro. Both restaurants have a set menu and the cost of serving each customer is $8 for both restaurants. Tapas bar chooses its price for the menu denoted by Pt, and bistro chooses its price for the menu denoted by Pb. Both restaurants are trying to maximize their profits. Tapas bar faces the demand curve Qt = 44 − 2Pt + Pb and bistro faces the demand curve Qb = 44 − 2Pb + Pt.

a) Write down the profit function of the tapas bar.

b) Write down the profit function of the bistro.

c) Find the best reply function of the tapas bar.

d) Find the best reply function of the bistro.

e) Find the Nash equilibrium using the best reply functions you derived in part c and d.

f) Draw the best reply functions you found in part c and d in the same graph. Show the Nash 2 equilibrium on your graph.

g) Does the Nash equilibrium you found generate the highest possible total profits (that is the sum of profits of the tapas bar and the profits of the bistro) for the two firms? If so, argue why this is the case. If not, argue why this is not the case and find the point that generates the highest possible total profits for the two firms.

1. Comparing Operating Characteristics Across Industries: Followings are selected income statement and balance sheet data companies in different industries.

a)   Compute the following ratios for each company:

b)   Comment on any differences among the companies’ gross profit-to-sale ratios and net income as a percentage of sales. Do differences in the companies’ business models explain the differences observed?

c)   Which company reports the highest ratio of net income to equity? Suggest one or more reasons for this result.

d)   Which company has financed itself with the highest percentage of liabilities to equity? Suggest one or more reasons for this result on such debt levels.

Which of the following is true of variable costing?

1. It expenses administrative costs as costs of goods sold
2. It is required for external reporting to shareholders
3. It treats direct manufacturing costs as a product cost
4. It includes fixed manufacturing overhead as an inventoriable cost

Tauton Company uses the high low to estimates its cost function. The information for 2017 is provided below:

Machine hour’s                costs

Highest observation of cost driver                            4000                                      332000

Lowest observation of cost driver                            3000                                       312000

What is the estimated total cost when 1900 machine hours are used?

1. 509600
2. 290000
3. 157700
4. 489700

Quantum Company uses the high low method to estimate the cost function the information for 2017 is provided below:

Machine hour’s                                costs

Highest observation of cost driver                            1000                                      32000

Lowest observation of cost driver                            200                                        16000

What is the constant for the estimated cost equation?

1. 12000
2. 32000
3. 16000
4. 20000

Which cost estimating method uses time and motion studies to reveal that to make a high quality men’s suit jacket it takes of 3 hours of direct labor effort per jacket and 5 minutes of a salaried manager to perform quality control?

A. the accrual accounting method

B .the industrial engineering method

C .the cash accounting method

D .the high low method

Rudder Company prints a variety of publications and coloured inserts for newspapers. Currently, the company produces its own ink, including a special metallic colour. India Inks has offered to supply the company with the 25,000 mL of metallic ink that it needs each year for $1.24 per millilitre. The company is interested because this is a particularly difficult ink to make. Purchasing must make special efforts to locate suppliers; the metallic component requires special handling; and, since the metallic ink uses machinery that is also used to make other colours of ink, the machinery must be cleaned very well before every batch of metallic.

The accounting department supplied the following unit costs:

Use the excel document found in the Assignments tab to answer the questions below.

1. Based on the cost figures, if Rudder purchases metallic ink from the outside supplier, will operating income be higher or lower?
2. By how much?  
3. What is the highest price per millilitre that Rudder would pay an outside supplier for the ink?
4. Why is the answer above the highest price Rudder would pay an outside supplier for the ink?  

The distribution of wait times for customers at a certain department of motor vehicles in a large city is skewed to the right with mean 23 minutes and standard deviation 11 minutes. A random sample of 50 customer wait times will be selected. Let x¯W represent the sample mean wait time, in minutes. Which of the following is the best interpretation of P(x¯W>25)≈0.10 ? For a random sample of 50 customer wait times, the probability that the total wait time will be greater than 25 minutes is approximately 0.10.

A For a randomly selected customer from the population, the probability that the total customer wait time will be greater than 25 minutes is approximately 0.10.

B For a randomly selected customer from the population, the probability that the sample mean customer wait time will be greater than 25 minutes is approximately 0.10.

C For a random sample of 50 customer wait times, the probability that the sample mean customer wait time will be greater than 23 minutes is approximately 0.10.

D For a random sample of 50 customer wait times, the probability that the sample mean customer wait time will be greater than 25 minutes is approximately 0.10.

A sports magazine reports that the mean number of hot dogs sold by hot dog vendors at a certain sporting event is equal to 150. A random sample of 50 hot dog vendors was selected, and the mean number of hot dogs sold by the vendors at the sporting event was 140. For samples of size 50, which of the following is true about the sampling distribution of the sample mean number of hot dogs sold by hot dog vendors at the sporting event? For all random samples of 50 sporting events, the sample mean will be 150 hot dogs.

A For all random samples of 50 hot dog vendors, the sample mean will be 140 hot dogs.

B The mean of the sampling distribution of the sample mean is 150 hot dogs.

C The mean of the sampling distribution of the sample mean is 140 hot dogs.

D All random samples of 50 hot dog vendors will have a sample mean within 10 hot dogs of the population mean.

A certain company produces fidget spinners with ball bearings made of either plastic or metal. Under standard testing conditions, fidget spinners from this company with plastic bearings spin for an average of 2.7 minutes, while those from this company with metal bearings spin for an average of 4.2 minutes. A random sample of three fidget spinners with plastic bearings is selected from company stock, and each is spun one time under the same standard conditions; let x¯1 represent the average spinning time for these three spinners. A random sample of seven fidget spinners with metal bearings is selected from company stock, and each is likewise spun one time under standard conditions; let x¯2 represent the average spinning time for these seven spinners. What is the mean μ(x¯1−x¯2) of the sampling distribution of the difference in sample means x¯1−x¯2 ? 3(2.7)−7(4.2)=−21.3

A 3−7=−4

B 2.7−4.2=−1.5

C 2.73−4.27=0.3

D 4.2−2.7=1.5

Consider two populations of coins, one of pennies and one of quarters. A random sample of 25 pennies was selected, and the mean age of the sample was 32 years. A random sample of 35 quarters was taken, and the mean age of the sample was 19 years.

For the sampling distribution of the difference in sample means, have the conditions for normality been met?

• Yes, the conditions for normality have been met because the distributions of age for the two populations are approximately normal.

  A

• Yes, the conditions for normality have been met because the sample sizes taken from both populations are large enough.

  B

• No, the conditions for normality have not been met because neither sample size is large enough and no information is given about the distributions of the populations.

  C

• No, the conditions for normality have not been met because the sample size for the pennies is not large enough and no information is given about the distributions of the populations.

  D

• No, the conditions for normality have not been met because the sample size for the quarters is not large enough and no information is given about the distributions of the populations.

1. Explain Judgmental Sampling

2. Define and Explain Response rates

3. What do you mean by Sample Size?

4. Differentiate between Probability Sampling and Non- Probability Sampling