Make-or-Buy Decision, Alternatives, Relevant Costs

Each year, Basu Company produces 19,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.18. The unit cost is:

Required:

1. What are the alternatives for Basu Company?

2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production.

List the relevant cost(s) of external purchase.

3. Which alternative is more cost effective and by how much?

  by $

4. What if $21,200 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much?
  by $

A study was designed to compare the mortality rate of two drugs – Drug A and Drug B. There were 7720 patients assigned to Drug A and 7780 patients assigned to Drug B (randomly assigned). The mortality rate in Drug A was 5.4% and the mortality rate in drug B was 3.8%. Use to test whether the mortality rates across the two drugs are significantly different.

Round your solution to two significant digits after decimal.

a. Specify the null and alternate hypothesis using appropriate notation. (1 point)

b. Compute the test statistic. (4 points)

c. Compute the p-value based on test statistic obtained in part b. (2 points)

d. Based on the p-value obtained in part c) specify your decision regarding the null hypothesis. (1 point)

e. Interpret the findings based on part d) in the context of this question. (2 point)

use Excel : The Mann company belongs to a risk class for which the appropriate discount rate is 10%. The company currently has 260,000 outstanding shares selling at $107 each. The firm is contemplating the declaration of a $4 dividend at the end of the fiscal year that just began. Assume there are no taxes on dividends. Answer the following questions based on the Miller and Modigliani model, which is discussed in the text.

A. What will be the price of the stock on the ex-dividend date if the dividend is declared?

B. What will be the price of the stock at the end of the year if the dividend is not declared?

C. If the company makes $3.8 million of new investments at the beginning of the period, earns net income of $1.75 million, and pays the dividend at the end of the year, how many shares of new stock must the firm issue to meet its funding needs?

D. Is it realistic to use the MM model in the real world to value stock? Why or why not?

Ms. Van Dorn, a 19-year-old female student from Holland, visits the college health center for “being tired all the time.” The nurse notes that she is pale with cool skin, mucous membranes are pale and moist, and lungs are clear. Ms. Van Dorn states that she does get short of breath climbing the stairs or walking uphill. Laboratory results;

RBC 3.8 million µL

HGB 9.8 g/dL

HCT 37%

MCV 70 fL

MCH 25 pg

MCHC 300 g/L

WBC 6000/mm³

Her blood smear is abnormal

1.    How should the nurse interpret these findings?

2.   What questions should the nurse ask Ms. Van Dorn to help in differentiating the type of anemia?

3.Are there any other lab results you want to know?

Ten annual returns are listed in the following? table:

a. What is the arithmetic average return over the? 10-year period?

b. What is the geometric average return over the? 10-year period?

c. If you invested? $100 at the? beginning, how much would you have at the? end?

a. What is the arithmetic average return over the? 10-year period? The arithmetic average return over the? 10-year period is (Round to four decimal? places.)

b. What is the geometric average return over the? 10-year period? The geometric average return over the? 10-year period is (Round to four decimal? places.)

c. If you invested? $100 at the? beginning, how much would you have at the? end? If you invested? $100 at the? beginning, at the end you would have?

Yoonie is a personnel manager in a large corporation. Each month she must review 16 of the employees. From past experience, she has found that the reviews take her approximately 4 hours each to do with a population standard deviation of 1.6 hours. Let X be the random variable representing the time it takes her to complete one review. Assume X is normally distributed. Let X be the random variable representing the mean time to complete the 16 reviews. Assume that the 16 reviews represent a random set of reviews. Find the probability that the mean of a month's reviews will take Yoonie from 3.8 to 4.2 hrs.

(b) Express the probability statements for the sample mean as well as for the standard normal Z and find the probability. Use four decimal places.

P(__3.8__<X<__4.2__)=

P(___<Z<_____)=_____

1. A lawyer travels daily from his home (in the suburbs) to his office in the city center. On average, the journey takes 24 minutes with a standard deviation of 3.8 minutes. Assume that the distribution of transfer times are normally distributed.

1. if the office opens at 9:00 a.m. and he leaves at 8:45 a.m. What percentage of the time are you late to work daily?
2. If you leave home at 8:35 a.m. and coffee is served in the office between 8:50 and 9 a.m., what is the probability that you will be served coffee?
3. Find the period above which is the 15% of the slowest transfers.
4. Suppose a sample of 5 trips taken by the lawyer is taken. If the attorney always leaves your home at 8:30 a.m., find the probability that on at least 2 trips he arrived between 9:05 a.m. and 9:20 a.m.

State tax allocation problem

Beach Hut is based in Georgia and has stores in Florida. Georgia has a 3.8% corporate tax rate, Florida is 17%.

Because it is a seasonal operation, Beach Hut sells all merchandise at end of season for 40% of manufacturer’s list price to a discount jobber. There are no opening or closing inventories.

All merchandise is ordered by the Georgia office.

Financial reports show the following activity for 2017.

Purchases 14,000,000

Sales 21,000,000 (16,000,000in Georgia, 5,000,000 in Florida)

Expenses

Executive office rental 150,000

Executive salaries 300,000

Insurance (all properties) 42,000

Georgia stores

Rental 185,000

Utilities 40,000

Salary 160,000

Florida

Rental 27,000

Utilities 8,000

Salary 21,000

For tax reporting, Beach Hut allocates all common expenses based on sales.

Compute Georgia and Florida income based on the above

1) A thermocouple element when taken from a liquid at 50 degrees Celsius and plunged into a liquid at 100 degrees celsius at time equal to zero gave the following e.m.f. values. Determine the 95% response time. Time 0 20 40 60 80 100 120 e.m.f. (mV) 2.5 3.8 4.5 4.8 4.9 5.0 5.0

2) What are the advantages and disadvantages of a plastic film type of potentiometer and when compared with the wired-wound potentiometer.

3) A shaft encoder is to be used with a 50 mm radius tracking wheel to monitor the linear displacement. If the encoder produces 256 pluses per revolution, what will be the number of pulses produced by a linear displacement of 300 mm?.

4) Suggest a sensor that could be used, as part of a control system, to determine the difference in level between two containers. The output is to provide an electrical signal for the control system.

*MiniTab Is Required for this question** Suppose that a precise measuring device for new hair growth has been developed and is used in the experiment described in exercise 1922. The percentages of new hair growth for the 30 pairs of men involved in the experiment were recorded. Do these data allow the chemist to conclude that drug B is more effective?

Drug A   Drug B
3.5   7.1
2.4   6.6
4.2   4.2
1.1   1.0
2.9   2.7
2.8   4.1
5.6   8.3
4.8   8.8
0.8   0.8
3.6   3.4
2.0   1.8
5.6   6.9
4.3   6.8
7.1   7.9
3.8   6.2
3.6   3.5
4.2   7.3
2.8   2.7
6.1   9.5
3.7   6.2
4.0   6.7
3.5   6.8
3.1   3.0
6.0   9.0
5.3   8.4
2.6   4.1
4.8   4.8
2.2   1.8
4.2   5.6
0.8   2.2