SBS Company purchased a new machine on January 1, at a cost of $420,000. The machine has an expected useful life of four years and an expected salvage value of $40,000. The company expects to use the machine for 1,300 hours in the first year, 1,900 hours in the second year, and 900 hours in the third and fourth year, respectively.

(a) Calculate Depreciation Expenses for each year using Straight-Line Method

(b) Calculate Depreciation Expenses for each year using Double-Declining-Balance Method

A working table is provided on the next page.

(c) Calculate Depreciation Expenses for each year using Units of Production Method

Working Table for Double-Declining-Balance Method

1.   Does the mean cost of a 1999 Honda Civic differ by location? To answer this question, a researcher with a lot of free time collected data on recent sales of these cars for four major cities, which is shown in the table below.

Notice: It’s 10 cars for each city. They’re not in any particular order.

Calculations notes
You’re going to go through the calculations to find the p-value from the data, but you can check all the calculations by using Excel, a calculator, or something else.
The calculations for this module are way more complicated than we’ve seen before, so please ask if you’re not sure. There’s also an Excel file on D2L where you can see the formulas to see where each number comes from.

a.   Write hypotheses appropriate to test the question here.

b.   A comparison boxplot of the prices is shown below. Based on the boxplot, does it appear the mean selling price for the cars is the same for every city? Explain your answer with evidence from the boxplot.

c1.   Calculate the mean price for each city.
c2.   Calculate the variance of the means.
c3.   Multiply that value by 10 to get the MST. (10 because its 10 observations / city.)
d1.   Calculate the variance in price for each city.
d2.   Calculate the mean of the variances. This is the MSE.
e.   Calculate the F-ratio as F = MST/MSE
f.   To calculate the p-value, we need the numerator df and the denominator df. What are those?
g.   What is the p-value for the test?
h.   Based on your p-value, make a conclusion with the context of this situation.

Below is a table that represents price, output, cost, revenue and profit data for a monopoly.

(a) Fill in the missing numbers for Firm B. Note: there are no numbers for MR and MC when Q=0. When output level is 4, the Average Total Cost is $320. When output level is equal to 8 the Total Variable Cost is equal to $700.

(b) At which unit of output does this Firm first start to experience Diminishing Marginal Returns (also know as Decreasing Marginal Returns). Explain your answer.

(c) Determine the TFC for Firm B. Explain how you got your answer.

(d) If this firm is to produce in the Short Run, then determine the output where this firm maximizes its profits or minimizes its loss. Using MC and MR, explain your answer.

(e) ) If this firm is to produce in the Short Run, then determine its best profit number.

(f) If this firm shuts down in the Short Run, what is this firm's profit number?

(g) Will this firm produce or shut down in the short run? Please explain your answer.

(h) What will this firm do in the long run: stay or leave? Please explain your answer.

Users of federal lands and nearby businesses do not pay the cost of the services provided for them by the federal government. Are these subsidies (which are paid for by taxpayers from throughout the country) appropriate, or should users of federal lands and services pay their fair market value? 150 words minimum.

5. Explain why Marginal Cost will initially decline and then increases as the number of products produced increases.

6. Explain why Average Total Cost will initially decline and then increases as the number of products produced increases.

7. Explain why Average Fixed Cost only declines as the number of products increases.

8. Explain how Long-Run Average Total Cost is determined

9. Provide reasons why Long-Run Average Total Cost would decline, stay constant, and increase.

10. Give at least 2 reason why a firm would achieve Economy to Scale.

Compute the MIRR statistic for Project I if the appropriate cost of capital is 13 percent. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Project I Time: 0 1 2 3 4 Cash flow –$11,500 $5,580 $4,430 $1,770 $2,250 MIRR % Should the project be accepted or rejected?

Consider the below estimated cash flows for Project A. Assume the cost of capital is 8%.

8. Find the net present value (NPV) of Project A’s projected cash flows.

9. Find the Internal Rate of Return (IRR) Project A’s projected cash flows.

10. Find the Profitability Index (PI) of Project A’s projected cash flows.

11. Find the Modified Internal Rate of Return (MIRR) for Project A’s projected cash flows.

Gateway Communications is considering a project with an initial fixed assets cost of $1.74 million that will be depreciated straight-line to a zero book value over the 10-year life of the project. At the end of the project the equipment will be sold for an estimated $232,000. The project will not change sales but will reduce operating costs by $383,500 per year. The tax rate is 35 percent and the required return is 10.7 percent. The project will require $48,000 in net working capital, which will be recouped when the project ends. What is the project's NPV?

$133,836

$171,046

$176,748

$164,467

$128,017

A large university claims that the average cost of housing within 5 miles of the campus is $8900 per scholl year. A high shcool student is preparing her budget for her freshman year at the university. She is concerned that the university's esimate is too low. She obtained a random sample of 81 records and computes the average cost is $9050. Based on earlier data, the population stand deviation is $760. Use a=0.01 level of significance.

Step 1. State the null and alternative hypothese.

Step 2. Write doown the appropriate test statistic (formula) and the rejection region of your test (repot z critical(s)

Step 3. Compute the value of the test statistic (z observed)

Step 4. State your conclusin (in one sentence, state whether of not the test reject the null hypothesis and in another sentence apply the result to the problem).

Step 5. Compute the p-value for this test. Is this evidence strong or weak in spporting the alternative hypothesis.