We are evaluating a project that costs $520,000, has a six-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 73,000 units per year. Price per unit is $45, variable cost per unit is $30, and fixed costs are $840,000 per year. The tax rate is 35 percent, and we require a 10 percent return on this project.

   

a.	Calculate the accounting break-even point. (Do not round intermediate calculations and round your final answer to nearest whole number. (e.g., 32))

  

Break-even point

units

     

b-1	Calculate the base-case cash flow and NPV. (Do not round intermediate calculations and round your NPV answers to 2 decimal places. (e.g., 32.16))

  

Cash flow	$
NPV	$

  

b-2	What is the sensitivity of NPV to changes in the sales figure? (Do not round intermediate calculations and round your final answer to 3 decimal places. (e.g., 32.161))

  

ΔNPV/ΔQ

$

  

c.	What is the sensitivity of OCF to changes in the variable cost figure? (Do not round intermediate calculations and Negative amount should be indicated by a minus sign.)

  

ΔOCF/ΔVC

$

Find the future value of the following annuities. The first payment in these annuities is made at the end of Year 1; that is, they are ordinary annuities. Round your answers to the nearest cent. (Notes: If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can "override" the variable that changes by simply entering a new value for it and then pressing the key for the unknown variable to obtain the second answer. This procedure can be used in many situations, to see how changes in input variables affect the output variable. Also, note that you can leave values in the TVM register, switch to Begin Mode, press FV, and find the FV of the annuity due.)

ode, press FV, and find the FV of the annuity due.)

1. $800 per year for 10 years at 8%.
   $  
   
2. $400 per year for 5 years at 4%.
   $  
   
3. $800 per year for 5 years at 0%.
   $  

Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due.

4. $800 per year for 10 years at 8%.
   $  
   
5. $400 per year for 5 years at 4%.
   $  
   
6. $800 per year for 5 years at 0%.
   $  

Explore jobs related to your area of study in relationship to the Information Technology field. Pick an architecture category from computer, information, network, software, technology, and security architecture. Select three positions which would indicate a career path.

Complete a 2-3-page paper with an abstract and conclusion (plus cover sheet and reference page) that discusses the job duties and skills necessary for the position in the current job market. You should include the requirements such as experience, education, certifications, along with salary ranges. This can be illustrated in a table of the positions with criteria for an easy visual comparison.

Discuss related professional organizations, career development resources and other methods to stay current in the position with changes to technology and progress through the career path.

Specific questions or items to address:

You need to discuss the job duties and skills necessary for the position in the current job market. You should include the requirements such as experience, education, certifications, along with salary ranges. This can be illustrated in a table of the positions with criteria for an easy visual comparison.

Discuss related professional organizations, career development resources and other methods to stay current in the position with changes to technology and progress through the career path.

Future Value of an Annuity

Find the future value of the following annuities. The first payment in these annuities is made at the end of Year 1, so they are ordinary annuities. Round your answers to the nearest cent. (Notes: If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can "override" the variable that changes by simply entering a new value for it and then pressing the key for the unknown variable to obtain the second answer. This procedure can be used in many situations, to see how changes in input variables affect the output variable. Also, note that you can leave values in the TVM register, switch to Begin Mode, press FV, and find the FV of the annuity due.)

1. $600 per year for 10 years at 10%.
   $_____?   
   
2. $300 per year for 5 years at 5%.
   $_____?   
   
3. $600 per year for 5 years at 0%.
   $_____?

Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due.

4. $600 per year for 10 years at 10%.
   $_____?   
   
5. $300 per year for 5 years at 5%.
   $_____?   
   
6. $600 per year for 5 years at 0%.
   $_____?

We are evaluating a project that costs $768,000, has a six-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 57,000 units per year. Price per unit is $60, variable cost per unit is $35, and fixed costs are $770,000 per year. The tax rate is 35 percent, and we require a return of 15 percent on this project.

   

a.	Calculate the accounting break-even point. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

  

Break-even point

units

     

b-1	Calculate the base-case cash flow and NPV. (Do not round intermediate calculations and round your NPV answer to 2 decimal places, e.g., 32.16.)

  

Cash flow	$
NPV	$

  

b-2	What is the sensitivity of NPV to changes in the sales figure? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)

  

ΔNPV/ΔQ

$

  

c.	What is the sensitivity of OCF to changes in the variable cost figure? (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.)

  

ΔOCF/ΔVC

$

What are some of the consequences (psychologically, socially, emotionally) of the fact that girls mature about 2 years earlier than boys during puberty?

Why do YOU think obesity is such an issue in America, particularly for adolescents and children? What do you think are the most important contributing factors?

Do you think body image is an issue for males in the same way that it is for females? Why/ why not?

What is your opinion on the start times of schools, given the video clip you watched regarding sleep changes in adolescence?

website-  pbs.org/wgbh/frontline/film/inside-the-teenage-brain., from 32:15-42:13).

Discuss whether or not you think males and females should be separated on sports teams prior to puberty. Technically, they have equal physical strength prior to puberty. But of course this changes with puberty…should they be separated beforehand in preparation for what is to come later? Or should they be allowed to play together? What about after puberty…should post-pubescent males or females who wish to (and would be capable of) participate(ing) on a sports team with members of the opposite sex (e.g., female football players or male field hockey players) be allowed to do so?

(a) A constant force < 31, -13, 36 > N acts through a displacement < 0.17, 0.34, -0.24 > m. How much work does this force do?
Work =           ?J

(b) An object with mass 7 kg moves from a location < 28, 28, -43 > m near the Earth's surface to location < -34, 16, 45 > m. What is the change in the potential energy of the system consisting of the object plus the Earth?
Change of potential energy =     ?J

(c) A spring whose stiffness is 900 N/m has a relaxed length of 0.59. If the length of the spring changes from 0.48 m to 0.86 m, what is the change in the potential energy of the spring?
Change of potential energy =      ?J

(d) You observe someone pulling a block of mass 33 kg across a low-friction surface. While they pull a distance of 6 m in the direction of motion, the speed of the block changes from 3 m/s to 5 m/s. Calculate the magnitude of the force exerted by the person on the block.
F =     ?N

(e) What was the change in internal energy (chemical energy plus thermal energy) of the person pulling the block?
Change in internal energy =     ?J

Climatic and Ecological Change: Past and Future The earth and its life are always changing. However, many of the most important changes occur over such long periods of time or at such large spatial scales that they are difficult to study. Two approaches that provide insights into long-term and large-scale processes are studies of pollen preserved in lake sediments and evolutionary studies. Margaret Davis (1983, 1989) carefully searched through a sample of lake sediments for pollen. The sediments had come from a lake in the Appalachian Mountains, and the pollen they contained would help her document changes in the community of plants living near the lake during the past several thousand years. Davis is a paleoecologist trained to think at very large spatial scales and over very long periods of time. She has spent much of her professional career studying changes in the distributions of plants during the Quaternary period, particularly during the most recent 20,000 years. S ome of the pollen produced by plants that live near a lake falls on the lake surface, sinks, and becomes trapped in lake sediments. As lake sediments build up over the centuries, this pollen is preserved and forms a historical record of the kinds of plants that lived nearby. As the lakeside vegetation changes, the mix of pollen preserved in the lake’s sediments also changes. In the example shown in f igure 1.8, pollen from spruce trees, Picea spp., first appears in lake sediments about 12,000 years ago then pollen from beech, Fagus grandifolia, occurs in the sediments beginning about 8,000 years ago. Chestnut pollen does not appear in the sediments until about 2,000 years ago. The pollen from all three tree species continues in the sediment record until about 1920, when chestnut blight killed most of the chestnut trees in the vicinity of the lake. Thus, the pollen preserved in the sediments of lakes can be used to reconstruct the history of vegetation in the area. Margaret B. Davis, Ruth G. Shaw, and Julie R. Etterson review extensive evidence that during climate change, plants evolve, as well as disperse (Davis and Shaw 2001; Davis, Shaw, and Etterson 2005). As climate changes, plant populations simultaneously change their geographic distributions and undergo the evolutionary process of    adaptation    , which increases their ability to live in the new climatic regime. Meanwhile, evidence of evolutionary responses to climate change is being discovered among many animal groups. Willranging from small mammals and birds to insects ( fig. 1.9 ), in response to increasing growing season length as a consequence of the now-well-documented phenomenon of globaliam Bradshaw and Chrranging from small mammals and birds to insects ( fig. 1.9 ), in response to increasing growing season length as a consequence of the now-well-documented phenomenon of global istina Holzapfel (2006) summarized several studies documenting evolutionary change in northern animals, ranging from small mammals and birds to insects ( fig. 1.9 ), in response to increasing growing season length as a consequence of the now-well-documented phenomenon of global warming (see chapter 23, p. 519). Research such as that by Davis and her colleagues will be essential to predicting and understanding ecological responses to global climate change. I n the remainder of this book we will fill in the details of the sketch of ecology presented in this chapter. This brief survey has only hinted at the conceptual basis for the research described. Throughout this book we emphasize the conceptual foundations of ecology. Each chapter focuses on a few e cological concepts. We also explore some of the applications associated with the concepts introduced. Of course, the most important conceptual tool used by ecologists is the scientific method, which is introduced on page 9. W e continue our exploration of ecology in section I with natural history and evolution. Natural history is the foundation on which ecologists build modern ecology for which evolution provides a conceptual framework. A major premise of this book is that knowledge of natural history and evolution improves our understanding of ecological relationships.

During the course of the studies reviewed in this chapter, each scientist or team of scientists measured certain variables. What major variable studied by Margaret Davis and her research team distinguishes their work from that of the other research reviewed in the chapter?

Question 1

Apple has the following financial statement information for fiscal year 2001 (in millions):

Income Statement	2001	Balance Sheet	2001	2000
Revenues	$5,363	Cash and Marketable Securities	$2,310	$1,191
Cost of Goods Sold	4,026	Inventory	11	33
Gross Profit	1,337	Total Current Assets	5,143	5,427
SG&A Exp.	1,568	Total Assets	6,021	6,803
Net Income (Net Loss)	-25	Total Current Liabilities	1,518	1,933
		Total Liabilities	2,101
		Total Equity	3,920	4,107
Sales (Year 2000)	7,983	Cash Flow Statement
Net Income (Year 2000)	786	Cash Flows from Operations	185

Using common-size analysis, Apple's total liabilities for 2001 is:

	a.	39.2%
	b.	53.6%
	c.	38.7%
	d.	34.9%

Question 2

Following Question 1, Apple's operating cash flow ratio for 2001 is:

	a.	12.2%
	b.	3.5%
	c.	3.1%
	d.	3.6%

Question 3

Following Question 1, Apple's inventory turnover ratio for 2001 is:

	a.	243.8x
	b.	547.4x
	c.	183.0x
	d.	366.0x

Question 4

Following Question 1, Apple's working capital turnover ratio for 2001 is:

	a.	1.13x
	b.	2.32x
	c.	1.48x
	d.	1.51x

Question 5

Following Question 1, Apple's debt ratio for 2001 is:

	a.	34.9%
	b.	39.2%
	c.	25.2%
	d.	53.6%

Question 6

Following Question 1, Apple's gross margin for 2001 is:

	a.	24.8%
	b.	1.9%
	c.	22.2%
	d.	75.1%

Question 7

Following Question 1 and using common-size analysis, Apple's Gross Profit is for 2001 is:

	a.	1.9%
	b.	24.9%
	c.	100.0%
	d.	22.2%

Question 8

Following Question 1, Apple's current ratio for 2001 is:

	a.	338.8%
	b.	152.2%
	c.	29.5%
	d.	244.8%

Question 9

Following Question 1, Apple's total asset turnover for 2001 is:

	a.	89.1%
	b.	41.8%
	c.	119.6%
	d.	83.6%

Question 10

Following Question 1, Apple's debt to equity ratio for 2001 is:

	a.	38.7%
	b.	34.9%
	c.	53.6%
	d.	39.2%

Question 11

Following Question 1, Apple's return on sales ratio for 2001 is:

	a.	0.5%
	b.	24.9%
	c.	100.0%
	d.	9.8%

Question 12

The following financial information is given for General Electric for fiscal year 2001 (in thousands):

Sales	$125,679	Cash	$  9,082
Cost of Goods Sold	42,008	Inventory	8,565
Gross Profit	83,671	Current Assets	340,708
Net Income	13,684	Total Assets	495,023
Operating Cash Flow	32,195	Current Liabilities	198,904
Earnings per share	1.38	Total Liabilities	440,111
Dividends per share	0.66	Total Equity	54,824
Net Income (fiscal year 2000)	12,735	Total Assets (fiscal year 2000)	437,006
Sales (fiscal year 2000)	129,417	Inventory (fiscal year 2000)	7,812

In GE's 2001 common-size income statement, Net Income is equal to:

	a.	10.9%
	b.	2.8%
	c.	16.4%
	d.	100.0%

Question 13

Following Question 12, in GE's 2001 common-size balance sheet, Current Liabilities are equal to:

	a.	45.2%
	b.	158.3%
	c.	362.9%
	d.	40.2%

Question 14

Following Question 12, the Cash Ratio for GE in 2001 is:

	a.	58.4%
	b.	4.6%
	c.	16.6%
	d.	2.1%

Question 15

Following Question 12, GE's 2001 Long-term Debt to Equity Ratio is:

	a.	9.0
	b.	4.4
	c.	8.0
	d.	3.6

Question 16

Following Question 12, GE's 2001 Return on Assets is:

	a.	25.0%
	b.	2.8%
	c.	2.9%
	d.	27.0%

  

Question 17

Following Question 12, GE's 2001 Dividend Payout is:

	a.	47.8%
	b.	0.01%
	c.	10.9%
	d.	42.5%

Question 18

Which of the following ratios is part of the Du Pont Model:

	a.	Dividend Payout
	b.	Operating Cash Flow Ratio
	c.	Current Ratio
	d.	Return on Equity

Question 19

Using the Du Pont Model, solvency (leverage) is measured as:

	a.	Sales / average total assets
	b.	Average total assets / average common equity
	c.	Sales / average working capital
	d.	Net income / sales

Question 20

Using the Du Pont Model, return on assets can be calculated as:

	a.	Return on Sales x Return on Assets
	b.	Return on Equity x Total Assets
	c.	Return on Sales x Asset Turnover
	d.	Gross Margin x Inventory Turnover

Question 21

A limitation on the use of ratios analysis is:

	a.	Relative size of the companies is not considered
	b.	The numbers used are assumed to be correct
	c.	Important qualitative issues such as business strategy are not involved
	d.	It can be difficult to determine what results are good or bad
	e.	All of the above

Question 22

The following data is given for annual operations for Hilton Hotels (in millions):

Hilton

	1997	1998	1999	2000	2001
Revenue	$1,475	$1,769	$1,959	$3,177	$2,632
Gross Profit	395	464	567	1,008	686
Net Income	250	297	174	272	166

Given the data above, the growth analysis for Hilton shows revenue growth for 1999 of:

	a.	10.7%
	b.	34.4%
	c.	8.9%
	d.	24.7%

Question 23

Following Question 22, the growth analysis for Hilton shows net income growth for 2000 of:

	a.	39.0%
	b.	36.0%
	c.	56.3%
	d.	8.8%

Question 24

Following Question 22, which year would be used as the base year for Hilton?

	a.	1997
	b.	1998
	c.	2001
	d.	2000

Question 25

Following Question 22, trend analysis for Hilton shows gross profit for 2001 of:

	a.	413.2
	b.	26.1
	c.	173.7
	d.	68.1

Question 26

Below are quarterly performance data for Marriott:

	Mar 2002	Dec 2001	Sept 2001	Jun 2001	Mar 2001
Revenue	$2,364	$2,868	$2,373	$2,450	$2,461
Net Income	82	-116	101	130	121

The quarterly % change in revenue for March 2002 from the same quarter one ago was:

	a.	3.5%
	b.	17.6%
	c.	96.1%
	d.	3.9%

Question 27

Following Question 26 and using common-size, September 2001 net income would be:

	a.	4.3%
	b.	100.0%
	c.	18.8%
	d.	16.5%

Question 28

Big Bill Computer has a stock price of $50, an EPS of $4.80, projected earnings growth of 8% a year and pays dividends of $2 per share. It is an investment fit to which fund?

	a.	Gotrocks Growth Fund
	b.	Gotrocks Income Fund
	c.	Gotrocks Value Fund
	d.	Gotrocks Money Market Fund

Question 29

Sell Co. has a stock price of $15, 2.3 millions shares outstanding, total stockholders equity of $12.6 million and total assets of $20 million. Sell Co. has a market to book ratio of:

	a.	$11.6 million
	b.	2.7x
	c.	1.7x
	d.	1.2x

Question 30

Following Question 29, Sell Co. has an intrinsic value of $18. What is the intrinsic value to price ratio?

	a.	1.7
	b.	$41.4 million
	c.	2.7
	d.	1.2

Question 31

The following financial information is given for Du Pont and Dow for fiscal year 2001:

	Du Pont	Dow
Closing Stock Price, Feb. 15, 2002	44.90	30.57
EPS (actual for 2001)	4.50	-0.46
EPS (forecast for 2002)	1.60	0.52
Dividend per share	1.40	1.34
5 year forecast earnings growth rate	10.2%	10.0%
Intrinsic value per share	103.84	33.38

Given the Feb. 15 stock prices, Du Pont & Dow have PE ratios (based on year-ahead EPS forecast) of:

	a.	28.06 & 66.46, respectively
	b.	32.07 & 22.81, respectively
	c.	9.98 & 58.79, respectively
	d.	28.06 & 58.79, respectively

Question 32

Following Question 31, given the Feb. 15 stock prices, Du Pont & Dow have dividend yields of:

	a.	3.56% & 1.70%, respectively
	b.	3.12% & 4.38%, respectively
	c.	31.11% & 2.58%, respectively
	d.	13.72% & 13.40%, respectively

Question 33

Following Question 31, given the Feb. 15 stock prices, PE based on actual EPS & 5-year-ahead earnings forecast, Du Pont has a PEG of:

	a.	2.75
	b.	3.14
	c.	0.98
	d.	4.40

Question 34

Following Question 31, based on PEG, which company seems to be the better investment opportunity?

	a.	Dow because the PEG is less than the benchmark cutoff of 1
	b.	Du Pont because of the very high PEG
	c.	Du Pont because the PEG is less than the benchmark cutoff of 1
	d.	Dow because of the very high PEG

Question 35

Following Question 31, based on intrinsic value to share price, Du Pont and Dow are:

	a.	Du Pont is undervalued but Dow is overvalued
	b.	Both overvalued
	c.	Du Pont is overvalued but Dow is undervalued
	d.	Both are undervalued

Question 36

The following financial information is given for Hilton & Marriott:

	Hilton	Marriott
Closing Stock Price, October 8, 2002	10.54	27.46
EPS (actual for 2001)	0.45	0.92
EPS (forecast for 2002)	0.51	1.83
Dividend per share	0.08	0.28
5 year forecast earnings growth rate	15.1%	15.7%
Common shares outstanding (thousands)	376,025	241,801

Given the October 8 stock prices:

	a.	Based on actual EPS Marriott has a higher PE than Hilton
	b.	Based on either actual or forecast EPS, Marriott has a PE almost double that of Hilton
	c.	Hilton s PE rises from actual to forecast because of poor performance
	d.	Based on forecast EPS Marriott has a higher PE than Hilton

Question 37

Following Question 36, based on the dividend yields for Hilton & Marriott:

	a.	Both are excellent fits to the Gotrocks Income Fund
	b.	Marriott has a higher yield than Hilton at 1.0% versus 0.8% for Hilton
	c.	Hilton has a high yield of 17.8%
	d.	Both Hilton & Marriott pay out dividends higher than actual earnings

Question 38

Following Question 36, given the October 8 stock prices, PE based on forecast EPS & 5-year-ahead earnings forecast, Hilton & Marriott have PEGs of:

	a.	1.55 & 1.90, respectively
	b.	0.70 & 1.75, respectively
	c.	20.67 & 15.01, respectively
	d.	1.37 & 0.96, respectively

Question 39

Following Question 36, based on PEG (using forecast EPS), which company seems to be the better investment opportunity?

	a.	Hilton because of its very high PEG
	b.	Hilton because its PEG is lower than Marriott
	c.	Marriott because of the very high PEG
	d.	Marriott because the PEG is less than the benchmark cutoff of 1

Question 40

Following Question 36, which company has the higher market capitalization?

	a.	Marriott because its stock price is more than twice as high as Hilton
	b.	Hilton valued at $14.72 billion versus Marriott at $11.89 billion
	c.	Marriott valued at $6.64 billions versus Hilton at $3.96 billion
	d.	Hilton because its book value is much higher than Marriott

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Using the general principles of ordinary income, is income proceeds from selling the copyright to a book where the recipient was an employee accountant who wrote a novel in her spare time over a number of years, considered "ordinary" income in the hands of the receipient?

a. This income represents income from a business and would be added to the tax calculation for the accountants employer. b. This income would not be considered 'ordinary income' in the hands of the receiptient. c. The income would be seen as trust income held by the individual until another book is written. If there is no further book within the next financial year the income would be seen as a capital asset. d. This is ordinary income in the hands of the receipient.

The Big Bang Company was set up by Ed, an Australian resident. It is incorporated in Singapore and has two directors who are resident in Singapore and who hold board meetings in Singapore. Each director has two shares in the Big Bang Company, which they hold on trust for Ed. The Big Bang Company owns real property, all of which is outside Australia, and makes its profits from commercial property leases on a large scale. Ed does not attend the board meetings in Singapore; however, the constitution of the Big Bang Company provides that the decisions of the directors are only effective if Ed concurs with them. The directors carry on all operational activities, such as collecting rent, paying commission, finding tenants, making minor repairs and maintaining the buildings. Is there any possible scenario in which the Big Bang Company could be considered a resident of Australia for tax purposes?

a. The Big Bang Company is an Australian resident for tax purposes. b. The Big Bang Company is not an Australian resident however as Singapore has an extradition agreement with Australia a portion of the corporation's tax to the Singapore government will be forwarded to the Australian commonwealth govenment. c. The Big Bang Company is not an Australian resident for tax purposes. d. The Big Bang Company is now recognised as a tax paying entity in Australia and Ed will be taxed personally as an Australian resident with all money received by the corporation being attributed to him.

Ajay is a student from India who comes to Australia to study for a four-year bachelor degree in business. Ajay lives in rental accommodation near the university with fellow students and works part-time at the university social club as a barman. After six months, he has to withdraw from his studies and return to India because his father is ill. Is Ajay considered a resident of Australia?

a. Ajay would be an Australian resident for tax purposes and pay tax on one third of his income. b. Ajay is not an Australian resident for tax purposes. c. Ajay is not an Australian resident for tax purposes however he will owe the Australian government all the tips he earned while working as a barman. d. Ajay would be an Australian resident for tax purposes.

Fred, an executive of a British corporation specialising in management consultancy, comes to Australia to set up a branch of his company. Although the length of his stay is not certain, he leases a residence in Melbourne for 12 months. His wife accompanies him on the trip but his teenage sons, having just commenced college, stay in London. Fred rents out the family home. Apart from the absence of his children, Fred’s daily behaviour is relatively similar to his behaviour before entering Australia. As well as the rent on the UK property, Fred earns interest from investments he has in France. Because of ill health Fred returns to the UK 11 months after arriving in Australia. Would Fred be an Australian resident for tax purposes?

a. Fred would not be an Australian resident for tax purposes however part of the tax he will pay in the United Kingdom will be paid to the Australian Tax Office as part of a bi-lateral tax agreement. b. Fred would not be an Australian resident for tax purposes. c. Fred would be an Australian resident for tax purposes. d. Fred would be an Australian resident for tax purposes for half of his income