The following data show the brand, price ($), and the overall score for six stereo headphones that were tested by a certain magazine. The overall score is based on sound quality and effectiveness of ambient noise reduction. Scores range from 0 (lowest) to 100 (highest). The estimated regression equation for these data is

ŷ = 21.258 + 0.327x,

where x = price ($)and y = overall score.

(a)

Compute SST (Total Sum of Squares), SSR (Regression Sum of Squares), and SSE (Error Sum of Squares). (Round your answers to three decimal places.)

SST=SSR=SSE=

(b)

Compute the coefficient of determination

r².

(Round your answer to three decimal places.)

r²

=

Comment on the goodness of fit. (For purposes of this exercise, consider a proportion large if it is at least 0.55.)

The least squares line provided a good fit as a large proportion of the variability in y has been explained by the least squares line.The least squares line did not provide a good fit as a small proportion of the variability in y has been explained by the least squares line.    The least squares line provided a good fit as a small proportion of the variability in y has been explained by the least squares line.The least squares line did not provide a good fit as a large proportion of the variability in y has been explained by the least squares line.

The following data show the brand, price ($), and the overall score for six stereo headphones that were tested by a certain magazine. The overall score is based on sound quality and effectiveness of ambient noise reduction. Scores range from 0 (lowest) to 100 (highest). The estimated regression equation for these data is

ŷ = 23.659 + 0.323x,

where x = price ($) and y = overall score.

(a)

Compute SST, SSR, and SSE. (Round your answers to three decimal places.)

SST = SSR = SSE =

(b)

Compute the coefficient of determination

r².

(Round your answer to three decimal places.)

r²

=

Comment on the goodness of fit. (For purposes of this exercise, consider a proportion large if it is at least 0.55.)

The least squares line provided a good fit as a small proportion of the variability in y has been explained by the least squares line.The least squares line provided a good fit as a large proportion of the variability in y has been explained by the least squares line.     The least squares line did not provide a good fit as a small proportion of the variability in y has been explained by the least squares line.The least squares line did not provide a good fit as a large proportion of the variability in y has been explained by the least squares line.

(c)

What is the value of the sample correlation coefficient? (Round your answer to three decimal places.)

Ennerdale Ltd has been asked to quote a price for a one-off contract. The company's management accountant has asked for your advice on the relevant costs for the contract. The following information is available:

Materials

The contract requires 3,000 kg of material K, which is a material used regularly by the company in other production. The company has 2,000 kg of material K currently in stock which has been purchased last month for a total cost of $19,600. Since then the price per kilogram for material K has increased by 5%.

The contract also requires 200 kg of material L. There are 250 kg of material L in stock which are not required for normal production. This material originally cost a total of $3,125. If not used on this contract, the stock of material L would be sold for $11 per kg.

Labour

The contract requires 800 hours of skilled labour. Skilled labour is paid $9.50 per hour. There is a shortage of skilled labour and all the available skilled labour is fully employed in the company in the manufacture of product P. The following information relates to product P:

Required:

(a) Prepare calculations showing the total relevant costs for making a decision about the contract in respect of the following cost elements:

(i) materials K and L; and

(ii) Skilled labous

(b) Explain how you would decide which over head costs would be relevant in the financial appraisal of the contract.

INSTRUCTIONS: Complete the statement in proper form. Revenue will be provided in an announcement at the end of Module 4 (based on actual number of services for your pricing levels). Additional information necessary to complete the income statement: General and Administrative Salaries paid = $1,200 Advertising = $100 Cleaning Products = $120 Depreciation = $83 Rent = $650 Loan = $420 Utilities and Insurance = $600 Quintinn's Furry Beasts Pet Co. Income Statement For the Month Ended January 31, xxxx Revenue: Grooming $- Day Care - Boarding - Total Revenue $- Cost of Goods Sold * - Gross Profit $- Expenses: G&A Salaries $- Advertising - Cleaning Products - Depreciation - Rent - Loan - Utilities and Insurance - Total Expenses $- Net Income / Loss $- * Cost of Goods Sold = Cost of Services (COS) There is no finished goods inventory to maintain. Quintinn's Furry Beasts Pet Co. Statement of Cost of Services For the Month Ended January 31, xxxx Beginning Work-in-Process Inventory $- Direct Materials: Materials - Beginning $- Add: Purchases for month of January 5,000 Materials Available for Use $5,000.00 Deduct: Ending Materials 3,000 Materials Used $2,000.00 Direct Labor 6,240 Factory Overhead 2,800 Total Manufacturing Overhead $11,040.00 Deduct: Ending Work-in-Process Inventory - Cost of Services $11,040 Grooming price $25 4 grooms per day Kennel price $25 12 dogs per day Daycare price $18 22 dogs per day

​(Individual or component costs of capital​) Compute the cost of the​ following:

a. A bond that has ​$1,000 par value​ (face value) and a contract or coupon interest rate of 8 percent. A new issue would have a floatation cost of 8 percent of the ​$1,140 market value. The bonds mature in 11 years. The​ firm's average tax rate is 30 percent and its marginal tax rate is 36 percent.

b. A new common stock issue that paid a ​$1.60 dividend last year. The par value of the stock is​ $15, and earnings per share have grown at a rate of 12 percent per year. This growth rate is expected to continue into the foreseeable future. The company maintains a constant​ dividend-earnings ratio of 30 percent. The price of this stock is now ​$23​, but 7 percent flotation costs are anticipated.

c. Internal common equity when the current market price of the common stock is ​$43. The expected dividend this coming year should be ​$3.00​, increasing thereafter at an annual growth rate of 9 percent. The​ corporation's tax rate is 36 percent.

d. A preferred stock paying a dividend of 9 percent on a ​$100 par value. If a new issue is​ offered, flotation costs will be 13 percent of the current price of ​$169.

e. A bond selling to yield 9 percent after flotation​ costs, but before adjusting for the marginal corporate tax rate of 36 percent. In other​ words, 9 percent is the rate that equates the net proceeds from the bond with the present value of the future cash flows​ (principal and​ interest).

The shareholders’ equity section of Superior Corporation’s balance sheet as of December 31, 2015, is as follows: Shareholders’ Equity Preferred stock, $100 par value; authorized, 300,000 shares; issued, 33,000 shares $3,300,000 Common stock, $5 par value; authorized, 2,000,000 shares; issued, 377,000 shares 1,885,000 Paid-in capital in excess of par—preferred 96,000 Paid-in capital in excess of par—common 825,000 Retained earnings 2,920,000 $9,026,000 The following events occurred during 2016: Jan. 5 10,500 shares of authorized and unissued common stock were sold for $7 per share. 16 10,000 shares of authorized and unissued preferred stock were sold for $108 per share. Apr. 1 79,000 shares of common stock were repurchased for the treasury at a price of $21 per share. Superior uses the cost method to account for treasury stock. Sept. 1 3,500 shares of preferred stock are issued in exchange for a piece of land. The land has an appraised value of $389,500. The preferred stock currently trades on the New York Stock Exchange at a price of $109 per share. Dec. 1 24,000 shares of treasury stock are reissued at a price of $24 per share.

Required: 1. Prepare journal entries for each of the above transactions.

2. Calculate the number of authorized, issued, and outstanding common shares as of December 31, 2016.

3. Calculate Superior’s legal capital at December 31, 2016.

Exercise 1. Firm Supply in the Short Run

Consider a firm with the following production function: y=L^½K^½. The cost function is C=w∙L+r∙K.

1. In the short-run the input K is given at K=100. What is the short-run production function y(L)?

2. Let w=0.1 and r=1. What is the cost function C(y)? Using the expression y(L) you found in part a, transform it into L(y) and plug it into the cost function C(L) to get C(y). Was a minimization necessary? Why or why not?

3. Given C(y) you find in part b, find AC(y) and MC(y). What is the firm’s short-run supply function S(p)?

4. At what level of y is the average cost minimized?

5. When the market price is p=0.2, how much does the firm supply? Find S(0.2). What is the firm’s profit? What is the firm’s producer surplus? How many workers does the firm employ? Find L.

6. When the market price is p=0.1, how much does the firm supply? Find S(0.1). What is the firm’s profit? What is the firm’s producer surplus? How many workers does the firm emply? Find L.

7. When the market price is p=0.3, how much does the firm supply? Find S(0.1). What is the firm’s profit? What is the firm’s producer surplus? How many workers does the firm emply? Find L.

Wan purchased a 7-year Treasury bond with a coupon rate of j₂ = 4.5% p.a. and a face value of $100 that matures at par and is subject to a 30% tax on interest and capital gain. The purchase price was $94.230.

a. Use the approximate bond yield formula to estimate the net yield rate. Give your answer in j₂ form, rounded to 3 decimal places.

b. Use linear interpolation to calculate the net yield rate. Give your answer in j₂ form, rounded to 3 decimal places. Hint: 1.9% per half year and 2% per half year are the lower bound and the upper bound for the net yield rate.

c. Recalculate the bond price if the net yield rate is j₂ = 4.3% p.a. and all tax payments (interest tax payments and capital gain tax payment) are delayed by half year. Round the result to 3 decimal places.

d. Wan decides to hold this bond to maturity. Over the seven years the before-tax reinvestment rates he earned are shown in table 1. Calculate Wan's total realised compound yield rate if he has received a tax exemption and so does not need pay the taxes for this bond. Assume that Wan purchased this bond at a yield rate of j₂ = 4.3% p.a. and the purchase price was $101.20. Give your answer in j₂ form, rounded to 2 decimal places.

Annual reinvestment rates as below:

Consider a super market which has different categories of items like grocery, stationary, cosmetics, etc. Under each category, the shop holds a maximum capacity of 100 items. The arrangement of items in the racks vary from time to time. Based on the item type and availability, the supplier also varies. Each supplier can supply different items. The system in the supermarket has the complete description of list of all items which includes item number, name, category, supplier name, price, total quantity and qty available. Based on the items purchased by the customer, billing is done.

          From the above description, initially the owner of the shop needs to allocate the rack for the available items randomly and a data structure in the system to hold the descriptions of items. When the owner checks for an item in the stock, it should show all information related to that item(qty available is calculated based on count of type of item purchased by the customer). When the purchased items are entered in the billing section ,it should print item no, item name, qty taken, price and total price of all the items and finally the grand total to be paid .Help the owner of the shop to achieve the above said using an interactive C program which uses appropriate data structures for allocation of space for items, defining the type of items, calculating the total and providing the bill for the customers. The program should be in such a way to handle both the owner and the customer part.[Hint: Use menu driven method and appropriate derived data types like pointers,structures to achieve the result]

Currently a three-year zero-coupon treasury bond is traded at a price of $70.38. The Treasury plans to issue a three-year annual coupon bond, with a coupon rate of 10%. The face value of all treasury annual coupon bonds is $100.

(a) What is the yield to maturity of the three-year zero-coupon bond?

(b) At what price should the three-year coupon bond be selling for?

(c) A bond analyst comments that without calculation, he can infer whether the bond will sell above its face value or not. How can he do this? Provide a brief explanation.

(d) If two bonds have the same term to maturity, the same yield to maturity, and the same level of risk, the bonds should sell for the same price." Do you agree that this is correct? Provide a brief explanation.

(e) Lily manages a bond portfolio with the following Treasury bonds:

• 3 year zero-coupon bonds
• 3 year 10% coupon bonds
• 10 year zero-coupon bonds
• 10 year 10% coupon bonds

She believes that market interest rates are going to increase over the next several months. Accordingly, she is suggested to do the following. Comment on each suggestion and make your recommendations to Lily (e.g., whether or not to adopt the suggestion).

1. Sell the 3 year zero coupon bonds and buy the 10 year zero coupon bonds
2. Buy the 10 year zero coupon bonds and sell the 10 year 10% coupon bonds