What would be the real cost of borrowing in the following case? A home equity loan is advertised at 5% compounded annually, however, there is a legal fee of $520 and appraisal fee of $300 to set up the house as collateral. If Jessie needs to borrow $35 000 for one year, at which time will be able to repay the full amount, what is the effective rate of borrowing the $35 000 for the year?

An important application of regression analysis in accounting is cost estimation. By developing an estimated
regression equation relating volume and cost, an analyst can estimate the cost associated with a particular
manufacturing volume. Consider the following sample production volumes and total cost data.
Production Volume (units) Total Cost ($)
400 6590
450 8235
550 8895
600 9720
700 10,540
750 11,530
a. Use these data to develop an estimated regression equation that could be used to predict the total cost for a
given production volume.
b. Compute the coefficient of determination. Interpret the coefficient of determination in terms of the percentage of the variability in total cost that can be explained by the regression of cost on production volume.
c. The company’s production schedule shows that 580 units must be produced next month. Determine the
estimated cost for this operation.
d. Use a one percent level of significance to test whether the production volume is significantly related to the
total cost and state your conclusion.
e. Support your results in part (d) with an interval estimate of the slope of the regression (i.e. the variable cost of production)
f.prepare ANOVA table

Duluth Ranch, Inc. purchased a machine on January 1, 2018. The cost of the machine was $38,000. Its estimated residual value was $12,000 at the end of an estimated 5-year life. The company expects to produce a total of 20,000 units. The company produced 1,400 units in 2018 and 1,850 units in 2019.


Required:

Calculate depreciation expense for 2018 and 2019 using the straight-line method.

Calculate the depreciation expense for 2018 and 2019 using the units-of-production method.

Calculate depreciation expense for 2018 through 2022 using the double-declining balance method.

A firm is considering investing in a new project. According to its cost of capital while using debt, preferred stock and new common stock, the project is expected to have an initial after tax cost of $5,000,000. Furthermore, the project is expected to provide after-tax operating cash flows of $1,800,000 in year 1, $2,900,000 in year 2, $2,700,000 in year 3 and $2,300,000 in year 4.

A firm has determined its optimal capital structure, which is composed of the following sources and target market value proportions.

Debt: The firm can raise debt by selling 15-year, $1,000 par value, 9% coupon interest rate bonds that pay annual interest. A flotation cost of 4 percent of the face value would be required in addition to the premium of $10.

Preferred Stock: Preferred stock, regardless of the amount sold, can be issued with an $80 par value and a 12% annual dividend rate. The cost of issuing and selling the stock is $3 per share.

Common Stock: The firm’s common stock is currently selling for $10 per share. The dividend that was paid last year was $0.87. Its dividend payments have been growing at a constant rate of 5% per year. It is expected that to attract buyers, a new common stock issue must be underpriced $2 per share, and the firm must also pay $1 per share in flotation costs.

Retained Earnings: A corporation expects to have earnings available to common shareholders (net income) of $1,000,000 in the coming year. The firm plans to pay 40 percent of earnings available in cash dividends. The retained earnings have been already exhausted. Therefore, the firm will use new common stock as the form of common equity financing. Additionally, the firm’s marginal tax rate is 40 percent.

1. Maximum acceptable payback period of this project is 3 years. Calculate the payback period for this project.
2. Calculate the project’s NPV.
3. Calculate the project’s IRR.
4. Should the firm make the investment? Why?

Nuclear Fuel Cycle:

Assuming that the price per SWU is $80 and the cost of conversion is $4/kgU, what is the
price of the U3O8 ($/lb U3O8) beyond which it will cost less to enrich the already mined, purified, and
converted (to UF6) tails that contain 0.2% U-235 rather than mine new uranium? Assume the product
will be 3% enriched in U-235 in either case and the new tails will be 0.1% (when the old tails are
enriched). Tails stored as UF6 cost nothing.

some key findings about the Economic and cost issue of the opioid crises in the US.

Explain why the marginal cost of production must increased if the marginal product of the marginal resource is decreasing.

1. The Owner’s ability to influence design and cost is highest at the construction phase.

1. True
2. False

2. The conceptual estimate is useful in the schematic design phase when design details are not available.

1. True
2. False

3. A Cost-Plus contract is considered a reimbursable type of contract.

3. True
4. False

4. An advantage of a Lump Sum Contract is that the owner assumes the risk of construction cost.

5. True
6. False

to critically analyze some of the problems associated with basing depreciation expenses on cost model and detrimental impact of fair value based revaluation model.

Suppose a government department would like to investigate the relationship between the cost of heating a home during the month of February in the Northeast and the home's square footage. The accompanying data set shows a random sample of 10 homes. Construct a 90% confidence interval to estimate the average cost in February to heat a Northeast home that is 2,200 square feet.

Determine the upper and lower limits of the confidence interval.

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LCL=