Suppose that you have just borrowed $250,000 in the form of a 30 year mortgage. The loan has an annual interest rate of 9% with monthly payments and monthly compounding.

*** I NEED TO KNOW HOW TO SOLVE THIS ON A CALCULATOR. i AM USING A HP-10B2+

a. What will your monthly payment be for this loan?

b. What will the balance on this loan be at the end of the 12th year?

c. How much interest will you pay in the 7th year of this loan?

d. How much of the 248th payment will consist of principal?

Suppose there is a 3-year bond with a $1000 face value, 12% coupon payments and a 6% yield to maturity.

a) Without any calculation, briefly explain whether this bond will be selling a premium or a discount

b) Calculate the price of this bond.

c) Calculate the duration of this bond. d) If someone buys this bond and holds it for three years, what is their rate of return? e) Suppose after one year, interest rates in the economy fall by 2%. If the person that bought this bond sells it at that time, what would be their rate of return? (Hint: First think about what the fall in interest rates will do to the bond’s price and then think about the rate of return.)

Assume a nation has an output level of 150 units per year, and that consumption is also 150. Suppose there is a sudden temporary drop in GDP by 16%. What does the long-run consumption path look like if this country has access to global financial markets with an interest rate of 5%?

The Distance Plus partnership has the following capital balances at the beginning of the current year:

Each of the following questions should be viewed independently.

1. If Sergio invests $60,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used.

2. If Sergio invests $40,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used.

3. If Sergio invests $50,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the goodwill method is used.

Note: there is one JE for A to record the admission of new partner under bonus method, one JE for B, to record the admission of new partner under bonus method, and 2 JE's for C, the first to record the entry for goodwill allocation, during the admission of a new partner and the second to record the investment made by the new partner in the business.

A condensed income statement for the Electronics Division of Gihbli Industries Inc. for the year ended December 31, 20Y9, is as follows:

Assume that the Electronics Division received no charges from service departments.

The president of Gihbli Industries Inc. has indicated that the division’s return on a $2,900,000 investment must be increased to at least 22.5% by the end of the next year if operations are to continue. The division manager is considering the following three proposals:

Proposal 1: Transfer equipment with a book value of $580,000 to other divisions at no gain or loss and lease similar equipment. The annual lease payments would be less than the amount of depreciation expense on the old equipment by $104,400. This decrease in expense would be included as part of the cost of goods sold. Sales would remain unchanged.

Proposal 2: Reduce invested assets by discontinuing a product line. This action would eliminate sales of $616,300, reduce cost of goods sold by $411,800, and reduce operating expenses by $181,300. Assets of $1,468,300 would be transferred to other divisions at no gain or loss.

Proposal 3: Purchase new and more efficient machinery and thereby reduce the cost of goods sold by $382,800 after considering the effects of depreciation expense on the new equipment. Sales would remain unchanged, and the old machinery, which has no remaining book value, would be scrapped at no gain or loss. The new machinery would increase invested assets by $1,450,000 for the year.

Required:

1. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and rate of return on investment for the Electronics Division for the past year. Round your answers to one decimal place.

2. Prepare condensed estimated income statements and compute the invested assets for each proposal.

3. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment for each proposal. Round your answers to one decimal place.

4. Which of the three proposals would meet the required 22.5% return on investment.

5. If the Electronics Division were in an industry where the profit margin could not be increased, how much would the investment turnover have to increase to meet the president's required 22.5% rate of return on investment? Enter your increase in investment turnover answer as a percentage of current investment turnover. If required, round your answer to one decimal place.
%

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.

Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:

Required:

1-a. Compute the throughput time for each month.

1-b. Compute the delivery cycle time for each month.

1-c. Compute the manufacturing cycle efficiency (MCE) for each month.

2. Evaluate the company’s performance over the last four months.

3-a. Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE.

3-b. Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.

The total factory overhead for Diva-nation is budgeted for the year at $169,465, divided into four activities: cutting, $18,130; sewing, $34,121; setup, $87,055; and inspection, $30,159. Diva-nation manufactures two types of men’s pants: jeans and khakis. The activity-base usage quantities for each product by each activity are as follows:

Each product is budgeted for 20,000 units of production for the year.

On December 31 of last year, Lauren burst into the family living room and announced that she and Connor (her college boyfriend) were going to be married. After recovering

from the shock, her mother hugged her and asked, “When?” The following conversation resulted:

Lauren: January 21.

Mom: What?

Dad: The Now Wedding will be the social hit of the year. Wait a minute. Why so soon?

Lauren: Because on January 30 Connor, who is in the National Guard, will be shipping out overseas. We want a week for a honeymoon.

Mom: But Honey, we can't possibly finish all the things that need to be done by then. Remember all the details that were involved in your sister's wedding?

Even if we start tomorrow, it takes a day to reserve the church and reception hall, and they need at least 14 days' notice. That has to be done before we can start decorating, which takes 3 days. An extra $200 on Sunday would probably cut that 14 day notice to 7 days, though.

Dad: Oh, boy!

Lauren: I want Jane Summers to be my maid of honor.

Dad: But she's in the Peace Corps in Guatemala, isn't she? It would take her 10

days to get ready and drive up here.

Lauren: But we could fly her up in 2 days and it would only cost $1,000.

Dad: Oh, boy!

Mom: And catering! It takes 2 days to choose the cake and decorations, and Jack's Catering wants at least 5 days' notice. Besides, we'd have to have those things before we could start decorating.

Lauren: Can I wear your wedding dress, Mom?

Mom: Well, we'd have to replace some lace, but you could wear it, yes. We could order the lace from New York when we order the material for the bridesmaids' dresses. It takes 8 days to order and receive the material. The pattern needs to be chosen first, and that would take 3 days.

Dad: We could get the material here in 5 days if we paid an extra $20 to airfreight it. Oh, boy!

Lauren: I want Mrs. Jacks to work on the dresses.

Mom: But she charges $48 a day.

Dad: Oh, boy!

Mom: If we did all the sewing we could finish the dresses in 11 days. If Mrs. Jacks helped we could cut that down to 6 days at a cost of $48 for each day less than 11 days. She is very good too.

Lauren: I don't want anyone but her.

Mom: It would take another 2 days to do the final fitting and 2 more days to clean and press the dresses. They would have to be ready by rehearsal night. We must have rehearsal the night before the wedding.

Dad: Everything should be ready rehearsal night.

Mom: We've forgotten something. The invitations!

Dad: We should order the invitations from Bob's Printing Shop, and that usually takes 7 days. I'll bet he would do it in 6 days if we slipped him an extra $20!

Mom: It would take us 2 days to choose the invitation style before we could order them and we want the envelopes printed with our return address.

Lauren: Oh! That will be elegant.

Mom: The invitations should go out at least 10 days before the wedding. If we let them go any later, some of the relatives would get theirs too late to come and that would make them mad. I'll bet that if we didn't get them out until 8 days before the wedding, Aunt Ethel couldn't make it and she would reduce her wedding gift by $200.

Dad: Oh, boy!!

Mom: We'll have to take them to the Post Office to mail them and that takes a day. Addressing would take 3 days unless we hired some part-time girls and we can't start until the printer is finished. If we hired the girls we could probably save 2 days by spending $40 for each day saved.

Lauren: We need to get gifts for the bridesmaids. I could spend a day and do that.

Mom: Before we can even start to write out those invitations we need a guest list. Heavens, that will take 4 days to get in order and only I can understand our address file.

Lauren: Oh, Mom, I'm so excited. We can start each of the relatives on a different job.

Mom: Honey, I don't see how we can do it. Why, I've got to choose the invitations and patterns and reserve the church and . . .

Dad: Why don't you just take $3,000 and elope. Your sister's wedding cost me $2,400 and she didn't have to fly people up from Guatemala, hire extra girls and Mrs. Jacks, use airfreight, or anything like that.

Considering the list of items Lauren and Mom plan for the wedding, identify a contingency plan for three key items essential to the wedding. The list may not include the three original items you suggested alternates for, but it may include the alternates since you may assume that Lauren loved your suggestions. Why are these items essential to the wedding and therefore in need of a contingency plan?

On December 31 of last year, Lauren burst into the family living room and announced that she and Connor (her college boyfriend) were going to be married. After recovering

from the shock, her mother hugged her and asked, “When?” The following conversation resulted:

Lauren: January 21.

Mom: What?

Dad: The Now Wedding will be the social hit of the year. Wait a minute. Why so soon?

Lauren: Because on January 30 Connor, who is in the National Guard, will be shipping out overseas. We want a week for a honeymoon.

Mom: But Honey, we can't possibly finish all the things that need to be done by then. Remember all the details that were involved in your sister's wedding?

Even if we start tomorrow, it takes a day to reserve the church and reception hall, and they need at least 14 days' notice. That has to be done before we can start decorating, which takes 3 days. An extra $200 on Sunday would probably cut that 14 day notice to 7 days, though.

Dad: Oh, boy!

Lauren: I want Jane Summers to be my maid of honor.

Dad: But she's in the Peace Corps in Guatemala, isn't she? It would take her 10

days to get ready and drive up here.

Lauren: But we could fly her up in 2 days and it would only cost $1,000.

Dad: Oh, boy!

Mom: And catering! It takes 2 days to choose the cake and decorations, and Jack's Catering wants at least 5 days' notice. Besides, we'd have to have those things before we could start decorating.

Lauren: Can I wear your wedding dress, Mom?

Mom: Well, we'd have to replace some lace, but you could wear it, yes. We could order the lace from New York when we order the material for the bridesmaids' dresses. It takes 8 days to order and receive the material. The pattern needs to be chosen first, and that would take 3 days.

Dad: We could get the material here in 5 days if we paid an extra $20 to airfreight it. Oh, boy!

Lauren: I want Mrs. Jacks to work on the dresses.

Mom: But she charges $48 a day.

Dad: Oh, boy!

Mom: If we did all the sewing we could finish the dresses in 11 days. If Mrs. Jacks helped we could cut that down to 6 days at a cost of $48 for each day less than 11 days. She is very good too.

Lauren: I don't want anyone but her.

Mom: It would take another 2 days to do the final fitting and 2 more days to clean and press the dresses. They would have to be ready by rehearsal night. We must have rehearsal the night before the wedding.

Dad: Everything should be ready rehearsal night.

Mom: We've forgotten something. The invitations!

Dad: We should order the invitations from Bob's Printing Shop, and that usually takes 7 days. I'll bet he would do it in 6 days if we slipped him an extra $20!

Mom: It would take us 2 days to choose the invitation style before we could order them and we want the envelopes printed with our return address.

Lauren: Oh! That will be elegant.

Mom: The invitations should go out at least 10 days before the wedding. If we let them go any later, some of the relatives would get theirs too late to come and that would make them mad. I'll bet that if we didn't get them out until 8 days before the wedding, Aunt Ethel couldn't make it and she would reduce her wedding gift by $200.

Dad: Oh, boy!!

Mom: We'll have to take them to the Post Office to mail them and that takes a day. Addressing would take 3 days unless we hired some part-time girls and we can't start until the printer is finished. If we hired the girls we could probably save 2 days by spending $40 for each day saved.

Lauren: We need to get gifts for the bridesmaids. I could spend a day and do that.

Mom: Before we can even start to write out those invitations we need a guest list. Heavens, that will take 4 days to get in order and only I can understand our address file.

Lauren: Oh, Mom, I'm so excited. We can start each of the relatives on a different job.

Mom: Honey, I don't see how we can do it. Why, I've got to choose the invitations and patterns and reserve the church and . . .

Dad: Why don't you just take $3,000 and elope. Your sister's wedding cost me $2,400 and she didn't have to fly people up from Guatemala, hire extra girls and Mrs. Jacks, use airfreight, or anything like that.

• Using the time estimates offered in the case create a simple timeline/schedule. This need not be detailed, just the basics are sufficient.

The mean number of sick days an employee takes per year is believed to be about 10. Members of a personnel department do not believe this figure. They randomly survey 8 employees. The number of sick days they took for the past year are as follows: 12; 6; 14; 3; 11; 9; 7; 9. Let X = the number of sick days they took for the past year. Should the personnel team believe that the mean number is about 10? Conduct a hypothesis test at the 5% level. State the distribution to use for the test. What is the test statistic? What is the p-value? Construct a 95% confidence interval for the true mean. Sketch the graph of the situation. Label the point estimate and the lower and upper bounds of the confidence interval. (Round your answers to three decimal places.) **Please use a TI*$ Plus where possible**