The shape of the distribution of the time required to get an oil change at a

1010​-minute

​oil-change facility is unknown.​ However, records indicate that the mean time is

11.6 minutes11.6 minutes​,

and the standard deviation is

4.5 minutes4.5 minutes.

Complete parts​ (a) through​ (c) below.

Click here to view the standard normal distribution table (page 1).

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Click here to view the standard normal distribution table (page 2).

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​(a) To compute probabilities regarding the sample mean using the normal​ model, what size sample would be​ required?

Choose the required sample size below.

A.

The sample size needs to be less than 30.

B.

The normal model cannot be used if the shape of the distribution is unknown.

C.

The sample size needs to be greater than 30.

D.

Any sample size could be used.

​(b) What is the probability that a random sample of

nequals=4545

oil changes results in a sample mean time less than

1010

​minutes?The probability is approximately

​(Round to four decimal places as​ needed.)

​(c) Suppose the manager agrees to pay each employee a​ $50 bonus if they meet a certain goal. On a typical​ Saturday, the​ oil-change facility will perform

4545

oil changes between 10 A.M. and 12 P.M. Treating this as a random​ sample, at what mean​ oil-change time would there be a​ 10% chance of being at or​ below? This will be the goal established by the manager.

The Village of Hawksbill issued $4100,000 in 5 percent general obligation, tax-supported bonds on July 1, 2019, at 101. A fiscal agent is not used. Resources for principal and interest payments are to come from the General Fund Interest payment dates are December 31 and June 30. The first of 20 annual principal payments are to made on June 30, 2020. Hawksbill has a calendar fiscal year.

1. A capital projects fund transferred the premium ( in the amount of $ 41,000) to the debt service fund.

2. On December 31, 2019, funds in the amount of $102,500 were received from the General Fund and the first interest payment was made.

3.The books were closed for 2019

4. On June 30, 2020, funds in the amount of $266,500 were received from the General Fund and the second interest payment ($102,500) was made along with principal payment ( $205,000)

5. On December 31, 2020 funs in the amount of $ 97,375 were received from the General Fund and the third interest payment was made ( also in the amount of $ 97,375)

6.the books were closed for 2020

A. Prepare journal entries to record the events above in the debt service fund

B. Prepare a statement of Revenues, Expenditures, and Changes in Fund Balance for the debt service fund for the year ended December 31, 2019

C. Prepare a statement of Revenues, Expenditures, and Changes in Fund Balance for the debt service fund for the year ended December 31 2020

You are advising a company that is working to raise $100,000,000. You believe that it is best for the company to issue stocks and bonds to raise these funds. The key market conditions during the planning period are as follows: the required interest rates on bonds with a AAA rating is 3.35%; the company's stock is currently priced to deliver an 11% return. The company stock will pay an annual dividend of $1.60 per share after one year and dividends are expected to grow by 8%.

1. What is the share price in the planning period?

2. If the stock price changes to reflect a required return of 9% what is the share price assuming the dividends remain as planned (use the constant dividend growth model)?

3. The company bonds will have a par value of $1,000 If the yield to maturity for AAA-rated bonds changes from 3.35% in the planning period to 3.0% when the deal closes, what will the price per bond be when the deal closes?

4. If you plan to raise 40% of the funds from selling bonds and 60% of the funds from selling stock, how many bonds and how many shares of stock do you expect to sell in the planning period?

5. If you still plan to raise 40% of the funds from selling bonds and 60% of the funds from selling stock, how many bonds and how many shares of stock do you have to sell to raise the funds using the new prices on the day the market closes?

You are thinking of purchasing a house that costs $450,000. You have $55,000 in cash that you can use as a down payment, but you need to borrow the rest of the purchase price. The bank is offering a 30-year mortgage that requires monthly payments and has an annual interest rate of 6.32% per year.

• What will your monthly payments be if you sign up for this mortgage?

• Present the amortization schedule (Beginning balance, Monthly payment, Principal payment, Interest payment, Ending balance) on a monthly basis using Excel.

• Calculate the total amount of interest paid throughout the life of the loan.

• Create a graph depicting the changes in the portions of interest and principal for each monthly payment throughout the life of the loan.

Suppose the interest rate decreases to 5.47% per year and the length of repayment decreases to 15 years.

• What will the new monthly payment be?

• Present a new amortization schedule (Beginning balance, Monthly payment, Principal payment, Interest payment, Ending balance) in a separate Excel sheet.

• Calculate the total amount of interest paid throughout the life of the loan.

• Create a graph depicting the changes in the portions of interest and principal for each monthly payment throughout the life of the loan.

How much do you save if you go with the 15-year mortgage versus the 30-year mortgage example above? Compute the difference between the total interest paid in parts A and B.

10. Suppose r_RF = 6%, r_M = 11%, and b_i = 1.3.

2. Now suppose r_RF decreases to 5%. The slope of the SML remains constant. How would this affect r_M and r_i?

-Select-IIIIIIIVVItem 3

1. What is r_i, the required rate of return on Stock i? Round your answer to two decimal places.
   %

2. 1. Now suppose r_RF increases to 7%. The slope of the SML remains constant. How would this affect r_M and r_i?

   1. Both r_M and r_i will remain the same.
   2. Both r_M and r_i will increase by 1%.
   3. r_M will remain the same and r_i will increase by 1%.
   4. r_M will increase by 1% and r_i will remain the same.
   5. Both r_M and r_i will decrease by 1%.
   
   
   -Select-IIIIIIIVVItem 2
   1. r_M will decrease by 1% and r_i will remain the same.
   2. r_M will remain the same and r_i will decrease by 1%.
   3. Both r_M and r_i will increase by 1%.
   4. Both r_M and r_i will remain the same.
   5. Both r_M and r_i will decrease by 1%.

3. 1. Now assume that r_RF remains at 6%, but r_M increases to 12%. The slope of the SML does not remain constant. How would these changes affect r_i? Round your answer to two decimal places.

   The new r_i will be  %.

   2. Now assume that r_RF remains at 6%, but r_M falls to 10%. The slope of the SML does not remain constant. How would these changes affect r_i? Round your answer to two decimal places.

   The new r_i will be  %.

Suppose r_RF = 7%, r_M = 11%, and b_i = 1.9.

2. Now suppose r_RF decreases to 6%. The slope of the SML remains constant. How would this affect r_M and r_i?

-Select-IIIIIIIVVItem 3

1. What is r_i, the required rate of return on Stock i? Round your answer to two decimal places.
     %

2. 1. Now suppose r_RF increases to 8%. The slope of the SML remains constant. How would this affect r_M and r_i?

   1. r_M will increase by 1% and r_i will remain the same.
   2. Both r_M and r_i will decrease by 1%.
   3. Both r_M and r_i will remain the same.
   4. Both r_M and r_i will increase by 1%.
   5. r_M will remain the same and r_i will increase by 1%.
   
   -Select-IIIIIIIVVItem 2  
   1. Both r_M and r_i will remain the same.
   2. Both r_M and r_i will decrease by 1%.
   3. r_M will decrease by 1% and r_i will remain the same.
   4. r_M will remain the same and r_i will decrease by 1%.
   5. Both r_M and r_i will increase by 1%.

3. 1. Now assume that r_RF remains at 7%, but r_M increases to 12%. The slope of the SML does not remain constant. How would these changes affect r_i? Round your answer to two decimal places.

   The new r_i will be   %.

   2. Now assume that r_RF remains at 7%, but r_M falls to 10%. The slope of the SML does not remain constant. How would these changes affect r_i? Round your answer to two decimal places.

   The new r_i will be   %.

On October 1, 2017, Sharp Company (based in Denver, Colorado) entered into a forward contract to sell 310,000 rubles in four months (on January 31, 2018) and receive $186,000 in U.S. dollars. Exchange rates for the ruble follow:

Sharp's incremental borrowing rate is 12 percent. The present value factor for one month at an annual interest rate of 12 percent (1 percent per month) is 0.9901. Sharp must close its books and prepare financial statements on December 31.

Prepare journal entries, assuming that Sharp entered into the forward contract as a fair value hedge of a 310,000 ruble receivable arising from a sale made on October 1, 2017. Include entries for both the sale and the forward contract.

Entry 1. Record the sale.

Entry 2. Record entry for forward contract entered into by Hanks Company.

Entry 3. Record the entry for changes in the exchange rate.

Entry 4. Record gain or loss on forward contract.

Entry 5. .Record the entry for changes in the exchange rate.

Entry 6. Record gain or loss on forward contract.

Entry 7. Record the receipt of LCUs.

Entry 8. Record settlement of forward contract.

The Village of Hawksbill issued $4,500,000 in 5 percent general obligation, tax-supported bonds on July 1, 2016, at 101. A fiscal agent is not used. Resources for principal and interest payments are to come from the General Fund. Interest payment dates are December 31 and June 30. The first of 20 annual principal payments is to be made June 30, 2017. Hawksbill has a calendar fiscal year.

1. A capital projects fund transferred the premium (in the amount of $52,500) to the debt service fund.
2. On December 31, 2016, funds in the amount of $112,500 were received from the General Fund and the first interest payment was made.
3. The books were closed for 2016.
4. On June 30, 2017, funds in the amount of $285,000 were received from the General Fund, and the second interest payment (112,500) was made along with the first principal payment ($225,000)
5. On December 31, 2017, funds in the amount of $106,875 were received from the General Fund and the third interest payment was made (also in the amount of $106,875).
6. The books were closed for 2017.

Required

a. Prepare journal entries to record the events above in the debt service fund.

b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the debt service fund for the year ended December 31, 2016.

c. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the debt service fund for the year ended December 31, 2017.