A pharmaceutical company claims that its new drug reduces systolic blood pressure. The systolic blood pressure (in millimeters of mercury) for nine patients before taking the new drug and 2 hours after taking the drug are shown in the table below. Using this data, find the 99% confidence interval for the true difference in blood pressure for each patient after taking the new drug. Assume that the blood pressures are normally distributed for the population of patients both before and after taking the new drug. Patient 1 2 3 4 5 6 7 8 9 Blood pressure (before) 187 186 176 203 182 168 199 167 204 Blood pressure (after) 178 166 158 187 157 159 192 148 196 Step 1 of 4 : Find the point estimate for the population mean of the paired differences. Let x1 be the blood pressure before taking the new drug and x2 be the blood pressure after taking the new drug and use the formula d=x2−x1 to calculate the paired differences. Round your answer to one decimal place.

Answer all questions. Showing your work may earn you partial credit.

Proposal #1 would extend trade credit to some customers that previously have been denied credit because they were considered poor risks.   Sales are projected to increase by $200,000 per year if credit is extended to these new customers. Of the new accounts receivable generated, 6% are projected to be uncollectible. Additional collection costs are projected to be 5% of incremental sales, and production and selling costs are projected to be 78% of sales. Your firm expects to pay a total of 30% of its income after expenses in taxes.

1. Compute the incremental income after taxes that would result from these projections:

2. Compute the incremental Return on Sales if these new credit customers are accepted:If the receivable turnover ratio is expected to be 5 to 1 and no other asset buildup is needed to serve the new customers…
3. Compute the additional investment in Accounts Receivable
4. Compute the incremental Return on New Investment
5. If your company requires a 20% Rate of Return on Investment for all proposals, do the numbers suggest that trade credit should be extended to these new customers? Explain.

RDH, Inc., manufactures high quality ladies boots. The company is considering the launch of a new boot style. Given the company’s history, it believes that it can sell 34,000, 27,000, 24,000, and 18,000 pair of boots per year for the next 4 years, respectively. The new boots would have variable costs of $134 per pair. Fixed production costs are $4.25 million per year and the equipment necessary for the new line costs $7.8 million. The equipment will be depreciated on a 5-year MACRS schedule. The line would require an investment in NWC of 15 percent of sales to be stockpiled one year ahead of sales, the tax rate is 40 percent, and the required return is 9 percent. The company expects that because of changes in styles, the new design can only be sold for the next four years. In four years, the equipment can be sold for $1.8 million, although the company believes it will keep the machinery for another product line. Additionally, the CEO has stated that she requires an NPV of $250,000 to undertake the new line of boots. What is the price per pair of boots that the company must set in order to undertake the new boot?

Travelocity would like to test if the standard deviation for roundtrip airfares between New York and London is less than $200. A random sample of 22 roundtrip airfares between New York and London had a standard deviation of $142. Using a = 0.05, the conclusion for this hypothesis test would be that because the test statistic is

A) less than the critical value, we fail to reject the null hypothesis and cannot conclude that the standard deviation for the roundtrip airfares between New York and London is less than $200.

B) more than the critical value, we can reject the null hypothesis and conclude that the standard deviation for the roundtrip airfares between New York and London is less than $200.

C) more than the critical value, we fail to reject the null hypothesis and cannot conclude that the standard deviation for the roundtrip airfares between New York and London is less than $200.

D) less than the critical value, we can reject the null hypothesis and conclude that the standard deviation for the roundtrip airfares between New York and London is less than $200.

Please write down the steps clearly, thank you in advance

Proposal #1 would extend trade credit to some customers that previously have been denied credit because they were considered poor risks. Sales are projected to increase by $150,000 per year if credit is extended to these new customers. Of the new accounts receivable generated, 7% are projected to be uncollectible. Additional collection costs are projected to be 3% of incremental sales (whether they actually end up collected or not), and production and selling costs are projected to be 80% of sales. Your firm expects to pay a total of 40% of its income after expenses in taxes.

1) Compute the incremental income after taxes that would result from these projections:

2) Compute the incremental Return on Sales if these new credit customers are accepted: If the receivable turnover ratio is expected to be 3 to 1 and no other asset buildup is needed to serve the new customers…

3) Compute the additional investment in Accounts Receivable

4) Compute the incremental Return on New Investment

5) If your company requires a 20% Rate of Return on Investment for all proposals, do the numbers suggest that trade credit should be extended to these new customers? Explain.

Proposal #1 would extend trade credit to some customers that previously have been denied credit because they were considered poor risks. Sales are projected to increase by $150,000 per year if credit is extended to these new customers. Of the new accounts receivable generated, 7% are projected to be uncollectible. Additional collection costs are projected to be 3% of incremental sales (whether they actually end up collected or not), and production and selling costs are projected to be 80% of sales. Your firm expects to pay a total of 40% of its income after expenses in taxes.

1) Compute the incremental income after taxes that would result from these projections:

2) Compute the incremental Return on Sales if these new credit customers are accepted: If the receivable turnover ratio is expected to be 3 to 1 and no other asset buildup is needed to serve the new customers…

3) Compute the additional investment in Accounts Receivable

4) Compute the incremental Return on New Investment

5) If your company requires a 20% Rate of Return on Investment for all proposals, do the numbers suggest that trade credit should be extended to these new customers? Explain.

Admitting New Partner With Bonus

Cody Jenkins and Lacey Tanner formed a partnership to provide landscaping services. Jenkins and Tanner shared profits and losses equally. After all the tangible assets have been adjusted to current market prices, the capital accounts of Cody Jenkins and Lacey Tanner have balances of $78,000 and $46,000, respectively. Valeria Solano has expertise with using the computer to prepare landscape designs, cost estimates, and renderings. Jenkins and Tanner deem these skills useful; thus, Solano is admitted to the partnership at a 30% interest for a purchase price of $32,000.

a. Determine the recipient and amount of the partner bonus.
$ Valeria Solano

Feedback

a. Determine the total capital, including the new contribution. Calculate the new partners' share of the total capital. If the new partner's contribution exceeds his share of the capital, the bonus goes to the current partners. If the new partner's share of the capital exceeds the contribution, the bonus goes to the new partner.

b. Provide the journal entry to admit Solano into the partnership. For a compound transaction, if an amount box does not require an entry, leave it blank.

A firm is considering an investment in a new machine with a price of $17.6 million to replace its existing machine. The current machine has a book value of $7.3 million and a market value of $6 million. The new machine is expected to have a four-year life, and the old machine has four years left in which it can be used. If the firm replaces the old machine with the new machine, it expects to save $7.25 million in operating costs each year over the next four years. Both machines will have no salvage value in four years. If the firm purchases the new machine, it will also need an investment of $440,000 in net working capital. The required return on the investment is 11 percent, and the tax rate is 24 percent. Assume the company uses straight-line depreciation.

A. What is the NPV of the decision to purchase a new machine? (round to 2 decimal places) B. What is the IRR of the decision to purchase a new machine (round to 2 decimal places) C. What is the NPV of the decision to purchase the old machines? (round to 2 decimal places) D. What is the IRR of the decision to purchase the old machines? (round to 2 decimal places)