You started Max Inc., a seed stage web-oriented entertainment venture, with 10,000 shares. You do not expect to make a profit until year 4 when your net income is expected to be $4 million. An investor wants to invest $1.5 million in your venture. You and the investor agree that the required return on this investment is 40% and that the investor will exit at the end of year 4. Meanwhile, the common stock of TDC, a comparable firm, currently trades in the over the counter market at $10 per share. TDC’s net income for the most recent year was $300,000 and the firm has 150,000 shares of common stock outstanding. However, two years after this deal, it turns out that the venture needs an additional investment of $1 million. Another investor is willing to invest $1 million in your venture provided you give her 30% return. Calculate the percentage of ownership dilution suffered by the first-round investor after the second investment.                                                                                           

Question #1 Please specify he output of the following code (2.4)
# import the pandas library and aliasing as pd
import pandas as pd
import numpy as np

df = pd.DataFrame(np.random.randn(8, 4),
index = ['a','b','c','d','e','f','g','h'], columns = ['A', 'B', 'C', 'D'])

# for getting values with a boolean array
print df.loc['a']>0

Question #2 Please specify the output of the following code (2.2)

import pandas as pd
import numpy as np

df = pd.DataFrame(np.random.randn(5, 3), index=['a', 'c', 'e', 'f',
'h'],columns=['one', 'two', 'three'])

df = df.reindex(['a', 'b', 'c', 'd', 'e', 'f', 'g', 'h'])
print df.dropna(axis=1)

Question #3 Given the following temp.csv (2.1)

S.No,Name,Age,City,Salary
1,Tom,28,Toronto,20000
2,Lee,32,HongKong,3000
3,Steven,43,Bay Area,8300
4,Ram,38,Hyderabad,3900

Please specify what is the output of the following code:

import pandas as pd 

df=pd.read_csv("temp.csv",names=['a','b','c','d','e'],header=0)
print df

Question 4 Please describe what the following code is doing (2.3)

import pandas as pd
import numpy as np

df = pd.DataFrame(np.random.randn(10, 4),
      index = pd.date_range('1/1/2000', periods=10),
      columns = ['A', 'B', 'C', 'D'])
print df
r = df.rolling(window=3,min_periods=1)
print r['A'].aggregate(np.sum)

Spiders. These are creepy, crawly things that scuttle over you when you sleep. And sometimes, or so the urban legend goes, they crawl into your mouth; swallowed whole by you during sleep!?! If the urban legend is to be believed, the total amount of spiders swallowed per year, per person, is 8. That is a lot of spiders! (Maloney, 2017).

Scientists, however, assure us that this urban legend is completely untrue; that the myth flies in the face of both spider and human biology. Shear argued, “spiders regard us much like they’d regard a big rock. . . we’re so large that we’re really just part of the landscape” (cited in Sneed, 2014, para 4). If anything, spiders find sleeping humans terrifying. Why? A slumbering person breaths, has a beating heart, and perhaps snores – all of which creates vibrations that warn spiders of danger (Sneed, 2014). In short, spiders typically stay away from sleeping humans.

Still, you are not convinced. And it is bedtime soon. You decide to call 20 of your friends and ask them to report how many spiders they have swallowed in a year.

The data you collected is presented below:

1. (5 pt) Conduct a t-test to see to see if there is a difference in the number of spiders swallowed per year by your friends and the rate of spiders swallowed – allegedly that is – per year by the general population. Use a two-tailed design with α= 0.05. Each step of the test is worth 1 point.

2. (2 pt) Write a sentence regarding the results of your hypothesis test as it might be reported in a scientific journal. Remember, at the end of the sentence report the t-value, df, and p-value in parentheses (as shown in class).

3. (2 pt) Explain how your hypothesis test would have been different if you were given this information: σ = 3. Would you have had the same conclusion? Show your calculations.

4. (2 pt) Explain how your t-test would have been different if you had been asked to test whether the number of spiders swallowed was less thanthe average of μ = 8 (i.e. one-tail, directional hypothesis, α= 0.05). Would you have had the same conclusion?

5. (4 pt) Comment on the importance of sample size (N) for making statistical conclusions in the current study. As part of your response, discuss the following: what role did sample size play in your calculations for 1) variance, 2) standard deviation, 3) final test statistic, and 4) cut-off. For each, discuss how increasing the sample size would affect these calculations? Refer to the formulas throughout your explanations.

Need answers for parts 5, 7 and 8.

Capital Rationing Decision for a Service Company Involving Four Proposals

Clearcast Communications Inc. is considering allocating a limited amount of capital investment funds among four proposals. The amount of proposed investment, estimated income from operations, and net cash flow for each proposal are as follows:

The company's capital rationing policy requires a maximum cash payback period of three years. In addition, a minimum average rate of return of 12% is required on all projects. If the preceding standards are met, the net present value method and present value indexes are used to rank the remaining proposals.

Required:

1. Compute the cash payback period for each of the four proposals.

2. Giving effect to straight-line depreciation on the investments and assuming no estimated residual value, compute the average rate of return for each of the four proposals. If required, round your answers to one decimal place.

3. Using the following format, summarize the results of your computations in parts (1) and (2) by placing the calculated amounts in the first two columns on the left and indicate which proposals should be accepted for further analysis and which should be rejected. If required, round your answers to one decimal place.

4. For the proposals accepted for further analysis in part (3), compute the net present value. Use a rate of 12% and the present value of $1 table above. Round to the nearest dollar.

Note: Select the proposals in alphabetic order.

5. Compute the present value index for each of the proposals in part (4). If required, round your answers to two decimal places.

Note: Select the proposals in alphabetic order.

6. Rank the proposals from most attractive to least attractive, based on the present values of net cash flows computed in part (4).

7. Rank the proposals from most attractive to least attractive, based on the present value indexes computed in part (5).

8. The present value indexes indicate that although Proposal ____ has the larger net present value, it is not as attractive as Proposal ___ in terms of the amount of present value per dollar invested. Proposal ___requires the larger investment. Thus, management should use investment resources for Proposal ___before investing in Proposal ___, absent any other qualitative considerations that may impact the decision.

Project 1 Calculations must be done in Excel

As the financial advisor to Upmarket Car Rentals you are evaluating the following types of cars to add to the fleet: -

1. Speedster: - A sporty convertible with a cost of $120,000 and a useful life of 4 years. It will produce rental income of $80,000 per year and operating costs of $15,000 per year. A major service is required after 2 years costing $20,000. A salvage value of $30,000 is expected after 4 years. The required return is 8%.

2. Cruncher: - A rugged off-road vehicle costing $180,000 but with an expected useful life of only 2 years, due to the harsh conditions. It will produce rental income of $150,000 per year and operating costs of $20,000 per year. A major service is required after 1 years costing $30,000. A salvage value of $45,000 is expected after 2 years. The required rate of return is 10%.

Income tax can be ignored.

Required

1. The NPV’s of the two cars.
2. An analysis of the two cars assuming they are mutually exclusive and can be repeated indefinitely.

Exercise 1:

The following table shows the total utility or the marginal utility of three commodities, which are apples, grapes, and dates. If the price of apples is 10 riyals, the price of grapes is 2 riyals, the price of dates is 8 riyals, and you as a consumer have an income of 74 riyals, using the terms of the consumer's balance to achieve the greatest benefit, I find the following: -

1) Complete the table by calculating the missing data in the table.
2) Find the optimum quantity that each commodity should consume for the greatest utility.
3) Calculate the maximum total utility that you can obtain from your consumption of optimal quantities of the three commodities.

Sloan Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $3,180. The freight and installation costs for the equipment are $640. If purchased, annual repairs and maintenance are estimated to be $430 per year over the four-year useful life of the equipment. Alternatively, Sloan can lease the equipment from a domestic supplier for $1,420 per year for four years, with no additional costs.

Prepare a differential analysis dated December 3, to determine whether Sloan should lease (Alternative 1) or purchase (Alternative 2) the machine. (Hint: This is a "lease or buy" decision, which must be analyzed from the perspective of the machine user, as opposed to the machine owner.) If an amount is zero, enter zero "0". Use a minus sign to indicate a loss.

Sloan Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $3,160. The freight and installation costs for the equipment are $660. If purchased, annual repairs and maintenance are estimated to be $430 per year over the four-year useful life of the equipment. Alternatively, Sloan can lease the equipment from a domestic supplier for $1,400 per year for four years, with no additional costs.

Prepare a differential analysis dated December 3, to determine whether Sloan should lease (Alternative 1) or purchase (Alternative 2) the machine. (Hint: This is a "lease or buy" decision, which must be analyzed from the perspective of the machine user, as opposed to the machine owner.) If an amount is zero, enter "0". Use a minus sign to indicate a loss.

Sloan Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $3,220. The freight and installation costs for the equipment are $650. If purchased, annual repairs and maintenance are estimated to be $390 per year over the four-year useful life of the equipment. Alternatively, Sloan can lease the equipment from a domestic supplier for $1,420 per year for four years, with no additional costs.

Prepare a differential analysis dated December 3, to determine whether Sloan should lease (Alternative 1) or purchase (Alternative 2) the machine. (Hint: This is a "lease or buy" decision, which must be analyzed from the perspective of the machine user, as opposed to the machine owner.) If an amount is zero, enter "0". Use a minus sign to indicate a loss.