Diners Delight X and R charts

Problem 6-4: Diners Delight (and R Charts)

The management of the Diners Delight franchised restaurant chain is in the process of establishing quality-control charts for the time that its service people give to each customer. Management thinks the length of time that each customer is given should remain within certain limits to enhance service quality.

A sample of six service people was selected, and the customer service they provided was observed four times. The activities that the service people were performing were identified, and the time to service one customer was recorded as noted below:

Service Person	Sample 1	Sample 2	Sample 3	Sample 4
1	200	150	175	90
2	120	85	105	75
3	83	93	130	150
4	68	150	145	175
5	110	90	75	105
6	115	65	115	125

a)      Copy and paste the data from the table above into Excel. Do the calculations in Excel and develop and R Charts showing the LCL and UCL. Copy and paste the spreadsheet calculations and theand R Charts below. Hint: The sample size is six since each sample contains six observations.

b.      After the control chart was established, a sample of six service personnel was observed, and the following customer service times in seconds were recorded: 180, 125, 110, 98, 156, and 190. Is corrective action called for?

                                                                       

Problem 6-7: Speedway Clinical Laboratory

The Speedway Clinical Laboratory is a scientific blood-testing facility that receives samples from local hospitals and clinics. The blood samples are passed through several automated tests, and the results are printed through a central computer that reads and stores the information about each sample that is tested.

Management is concerned about the quality of the service it provides and wants to establish quality-control limits as a measure for the quality of its tests. Such managerial practice is viewed as significant, because incorrect analysis of a sample can lead to a wrong diagnosis by the physician, which in turn might cost the life of a patient. For this reason, 100 blood samples were collected at random each day after they had gone through testing. After retesting was performed manually on this sample, the results were:

Day	Incorrect Analysis	Day	Incorrect Analysis
1	8	11	4
2	3	12	6
3	1	13	5
4	0	14	10
5	4	15	2
6	2	16	1
7	9	17	0
8	6	18	6
9	3	19	3
10	1	20	2

a)      Copy and paste the data from the table above into Excel. Do the calculations in Excel and develop the p chart with the LCL and UCL. Copy and paste the spreadsheet calculations and the p chart below.

b)      Later, another sample of 100 was taken. After the accuracy of the tests was established, 10 samples were found to have been analyzed incorrectly. What is your conclusion about the quality of this service?

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URL Encoding a String

Assignment 2 - URL Encoding a String

Skills Looping Branching Use of the length(), indexOf(), and charAt() methods of class String Use of the static Integer.toHexString method to convert a character to its ASCII hex value Description In this assignment, you'll be URL encoding of a line of text. Web browsers URL encode certain values when sending information in requests to web servers (URL stands for Uniform Resource Locator). Your program needs to perform the following steps: Prompt for a line of input to be URL encoded Read the line of text into a String (using the Scanner class nextLine method) Print the line that was read. Print the number of characters in the line (using String.length) Create an output String that is the URL encoded version of the input line (see below for details on encoding). Print the URL encoded String Print the number of characters in the encoded String. To convert a String to URL encoded format, each character is examined in turn: The ASCII characters 'a' through 'z', 'A' through 'Z',  '0' through '9', '_' (underscore), '-' (dash), '.' (dot), and '*' (asterisk) remain the same. The space (blank) character ' ' is converted into a plus sign '+'. All other characters are converted into the 3-character string "%xy", where xy is the two-digit hexadecimal representation of the lower 8-bits of the character. Use a for loop which increments it's index variable from 0 up to the last character position in the input string. Each iteration of the loop retrieves the character at the 'index' position of the input string  (call the String class charAt() method on the input string). Use if statements to test the value of the character to see if it needs to be encoded. If encoding is not required, just concatenate it to the output encoded String. If encoding is required, concatenate the encoded value to the output encoded String. For example, if the input character is a blank, you want to concatenate a '+' character to the output encoded String (as described above). Note: one technique to determine if a character is one that remains the same is to first create an initialized String containing all of the letters (both upper and lower case), digits, and other special characters that remain the same as described above. Then, call the String indexOf method on that String, passing the character to be tested. If -1 is returned from indexOf, the character was not one of those that remains the same when URL encoding. For those characters that need to be converted into hex format (%xy above), you can call the pre-defined static Integer.toHexString method, passing the character as an argument. It returns the hex value of the character as a String, which you can concatenate to the encoded output String with the accompanying '%' symbol:     String hexValue = Integer.toHexString(srcChar);     encodedLine += '%' + hexValue; Values that are URL encoded in this manner can be URL decoded by reversing the process. This is typically done by a web server upon receiving a request from a browser. Sample Output Enter a line of text to be URL encoded This should have plus symbols for blanks The string read is:  This should have plus symbols for blanks Length in chars is:  40 The encoded string:  This+should+have+plus+symbols+for+blanks Length in chars is:  40 Enter a line of text to be URL encoded This should have hex 2f for / The string read is:  This should have hex 2f for / Length in chars is:  29 The encoded string:  This+should+have+hex+2f+for+%2f Length in chars is:  31 Test Data Use all the following test data to test your program, plus an example of your own: This should have hex 2f for / An encoded + should be hex 2b 123 and _-.* are unchanged Angles, equals, question, ampersand > < = ? & Getting started Before you start writing Java code, it's usually a good idea to 'outline' the logic you're trying to implement first. Once you've determined the logic needed, then start writing Java code. Implement it incrementally, getting something compiled and working as soon as possible, then add new code to already working code. If something breaks, you'll know to look at the code you just added as the likely culprit. To help you get started with this homework, here's an outline of the logic you'll need (sometime referred to as 'pseudo-code'): Prompt for the line of input. Read a line into the input string. Set the encoded output string to empty. Loop through each character in the input string. {   Get the n'th character from the input string (use String's charAt method).   if (the character is a blank)     concatenate '+' to the encoded output string   else if (the character remains unchanged)     concatenate the character to the encoded output string   else     concatenate '%' and the hex encoded character value     to the encoded output string } Print the encoded output string. Once you understand this logic, start writing your Java code. An example of the steps you could take are as follows: Create your Java source file with the public class and main() method (like homework 1). In the main() method, add code to prompt for the input line, read in the line of input, and print it out. Next, add the for-loop that loops through each character of the input string. You can use the length() method on your input string to get the number of characters in it to control your loop. The first statement in the loop should call charAt() on the input string to get the next character to examine. To check things are working ok so far, make the next statement in the loop print out the character position (the for-loop index variable) and character from the string. Get this much compiled and running first. With this much done, if you read in a line containing "hello", you'd get output something like this from the temporary output statement within the loop: char 0 is h char 1 is e char 2 is l char 3 is l char 4 is o Once you've got this compiled and working, starting adding the if/else-if/else logic inside the loop to build the encoded output string.

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Planning, Performance, Evaluation, and Control MCQ

1. The budget or schedule that provides necessary input data for the direct-labor budget is the
A. production budget. B. raw materials purchases budget.
C. schedule of cash collections. D. cash budget.

2. The company plans to sell 22,000 units of Product WZ in June. The finished-goods inventories on June 1 and June 30 are budgeted to be 100 and 400 units, respectively. The direct labor hours are 11,000 and the direct labor rate is $10.50. Budgeted direct-labor costs for June would be A. $234,150. B. $117,075. C. $462,000. D. $455,700.

3-Werber Clinic uses client visits as its measure of activity. During January, the clinic budgeted for 2,700 client visits, but its actual level of activity was 2,730 client visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January:
Data used in budgeting:
Fixed element Variable element
Per month per client-visit
Revenue ___-___ $33.60
Personnel expenses $22,100 $8.70
Medical supplies 1,100 6.60
Occupancy expenses 5,600 1.60
Administrative expenses 3,700 0.40
Total expenses $32,500 $17.30
Actual results
for January:
Revenue $93,408- Personnel expenses - $46,251-Medical supplies $19,348
Occupancy expenses $9,508 - Administrative expenses $4,772
3. The activity variance for administrative expenses in January would be closest to
A. $8 U. B. $12 F. C. $8 F. D. $12 U.

4-Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows:

Standard Standard Cost
Quantity per bag
Direct material 20 pounds $8.00
Direct labor 0.1 hours $1.10
Variable overhead 0.1 hours $0.40
The company had no beginning inventories of any kind on January 1. Variable overhead is applied to production on the basis of standard direct-labor hours. During January, the company recorded the following activity:
• Production of Fastgro: 4,000 bags
• Direct materials purchased: 85,000 pounds at a cost of $32,300
• Direct-labor worked: 390 hours at a cost of $4,875
• Variable overhead incurred: $1,475
• Inventory of direct materials on January 31: 3,000 pounds
4. The labor rate variance for January is A. $585 F. B. $475 U. C. $585 U. D. $475 F.

5. There are various budgets within the master budget. One of these budgets is the production budget. Which of the following best describes the production budget?
A. It's calculated based on the sales budget and the desired ending inventory.
B. It details the required raw materials purchases.
C. It summarizes the costs of producing units for the budget period.
D. It details the required direct-labor hours.

6-Moorhouse Clinic uses client visits as its measure of activity. During December, the clinic budgeted for 3,700 client visits, but its actual level of activity was 3,690 client visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December:
Data used in budgeting:
Fixed element Variable element
per month per client-visit

Revenue ____-____ $25.10
Personnel expenses $27,100 $7.10
Medical supplies 1,500 4.50
Occupancy expenses 6,000 1.00
Administrative expenses 3,000 0.10
Total expenses $37,600 $12.70

Actual results
for December:
Revenue $96,299- Personnel expenses $51,009- Medical supplies $17,425
Occupancy expenses $9,240- Administrative expenses $3,239
6. The activity variance for personnel expenses in December would be closest to
A. $71 U. B. $2,361 U. C. $71 F. D. $2,361 F.

7-Werber Clinic uses client visits as its measure of activity. During January, the clinic budgeted for 2,700 client visits, but its actual level of activity was 2,730 client visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January:
Data used in budgeting:
Fixed element Variable element
per month per client-visit
Revenue ___-___ $33.60
Personnel expenses $22,100 $8.70
Medical supplies 1,100 6.60
Occupancy expenses 5,600 1.60
Administrative expenses 3,700 0.40
Total expenses $32,500 $17.30
Actual results
for January:
Revenue $93,408-- Personnel expenses $46,251-- Medical supplies $19,348
Occupancy expenses $9,508-- Administrative expenses $4,772
7. The activity variance for personnel expenses in January would be closest to
A. $261 U. B. $661 F. C. $261 F. D. $661 U.

8. Manufacturing Cycle Efficiency (MCE) is computed as
A. Value-Added Time divided by Delivery Cycle Time.
B. Process Time divided by Delivery Cycle Time.
C. Throughput Time divided by Delivery Cycle Time.
D. Value-Added Time divided by Throughput Time.

9-Moorhouse Clinic uses client visits as its measure of activity. During December, the clinic budgeted for 3,700 client visits, but its actual level of activity was 3,690 client visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December:

Data used in budgeting:
Fixed element Variable element
per month per client-visit

Revenue ____-____ $25.10
Personnel expenses $27,100 $7.10
Medical supplies 1,500 4.50
Occupancy expenses 6,000 1.00
Administrative expenses 3,000 0.10
Total expenses $37,600 $12.70

Actual results
for December:
Revenue $96,299----Personnel expenses $51,009----Medical supplies $17,425
Occupancy expenses $9,240--Administrative expenses $3,239
9. The personnel expenses in the planning budget for December would be closest to
A. $51,147. B. $51,009. C. $53,299. D. $53,370.

10- Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows:

Standard Standard Cost
Quantity per bag
Direct material 20 pounds $8.00
Direct labor 0.1 hours $1.10
Variable overhead 0.1 hours $0.40
The company had no beginning inventories of any kind on January 1. Variable overhead is applied to production on the basis of standard direct-labor hours. During January, the company recorded the following activity:
• Production of Fastgro: 4,000 bags
• Direct materials purchased: 85,000 pounds at a cost of $32,300
• Direct-labor worked: 390 hours at a cost of $4,875
• Variable overhead incurred: $1,475
• Inventory of direct materials on January 31: 3,000 pounds
10. The materials quantity variance for January is A. $300 U. B. $800 U. C. $300 F.D. $750F.

11-Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows:

Standard Standard Cost
Quantity per bag
Direct material 20 pounds $8.00
Direct labor 0.1 hours $1.10
Variable overhead 0.1 hours $0.40

The company had no beginning inventories of any kind on January 1. Variable overhead is applied to production on the basis of standard direct-labor hours. During January, the company recorded the following activity:
• Production of Fastgro: 4,000 bags
• Direct materials purchased: 85,000 pounds at a cost of $32,300
• Direct-labor worked: 390 hours at a cost of $4,875
• Variable overhead incurred: $1,475
• Inventory of direct materials on January 31: 3,000 pounds
11. The total variance (both rate and efficiency) for variable overhead for January is
A. $125 F. B. $40 F. C. $85 F. D. $100 U.

12. Which of the following will not result in an increase in return on investment (ROI), assuming other factors remain the same?
A. An increase in operating assets B. An increase in sales
C. A reduction in expenses D. An increase in net operating income

13. Coles Company, Inc. makes and sells a single product, Product R. Three yards of Material K are needed to make one unit of Product R. Budgeted production of Product R for the next five months is as follows:
August 14,000 units. September 14,500 units. October 15,500 units
November 12,600 units December 11,900 units
The company wants to maintain monthly ending inventories of Material K equal to 20% of the following month's production needs. On July 31, this requirement wasn't met because only 2,500 yards of Material K were on hand. The cost of Material K is $0.85 per yard. The company wants to prepare a Direct Materials Purchase Budget for the rest of the year.
The total cost of Material K to be purchased in August is
A. $33,840. B. $40,970.C. $48,200. D. $42,300.

14. The LFM Company makes and sells a single product, Product T. Each unit of Product T requires 1.3 hours of direct labor at a rate of $9.10 per direct-labor hour. LFM Company needs to prepare a direct-labor budget for the second quarter of next year. The budgeted direct-labor cost per unit of Product T would be. A. $11.83. B. $7.00. C. $9.10. D. $10.40.

15. Division X of Charter Corporation makes and sells a single product which is used by manufacturers of fork lift trucks. Presently it sells 12,000 units per year to outside customers at $24 per unit. The annual capacity is 20,000 units and the variable cost to make each unit is $16. Division Y of Charter Corporation would like to buy 10,000 units a year from Division X to use in its products. There would be no cost savings from transferring the units within the company rather than selling them on the outside market. What should be the lowest acceptable transfer price from the perspective of Division X? A. $16.00 B. $24.00 C. $21.40 D. $17.60

16. Vandall Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During April, the company budgeted for 7,300 units, but its actual level of activity was 7,340 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for April:
Data used in budgeting:
Fixed element Variable element
per month per unit

Revenue ___-___ $35.40
Direct labor 0 $3.30
Direct materials 0 15.90
Manufacturing overhead 49,200 1.20
Selling and
Administrative expenses 26,600 0.10
Total expenses $75,800 $20.50
Actual results for April:
Revenue $254,146. - Direct labor $24,722.-Direct materials $116,496
Manufacturing overhead $59,608. - Selling and administrative expenses $26,494
The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for April would be closest to. A. $6,144 U. B. $6,144 F. C. $6,740 F. D. $6,740 U.

17-Moorhouse Clinic uses client visits as its measure of activity. During December, the clinic budgeted for 3,700 client visits, but its actual level of activity was 3,690 client visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December:
Data used in budgeting:
Fixed element Variable element
per month per client-visit

Revenue ____-____ $25.10
Personnel expenses $27,100 $7.10
Medical supplies 1,500 4.50
Occupancy expenses 6,000 1.00
Administrative expenses 3,000 0.10
Total expenses $37,600 $12.70
Actual results for December:
Revenue $96,299 - Personnel expenses $51,009 - Medical supplies $17,425
Occupancy expenses $9,240- Administrative expenses $3,239
17. The spending variance for medical supplies in December would be closest to
A. $680 F. B. $680 U. C. $725 F. D. $725 U.

18-The Adams Company, a merchandising firm, has budgeted its activity for November according to the following information:
• Sales were at $450,000, all for cash.
• Merchandise inventory on October 31 was $200,000.
• The cash balance on November 1 was $18,000.
• Selling and administrative expenses are budgeted at $60,000 for November and are paid for in cash.
• Budgeted depreciation for November is $25,000.
• The planned merchandise inventory on November 30 is $230,000.
• The cost of goods sold is 70% of the selling price. • All purchases are paid for in cash.
18. The budgeted net income for November is A. $135,000. B. $50,000. C. $75,000.
D. $68,000.

19. The Charade Company is preparing its Manufacturing Overhead budget for the fourth quarter of the year. The budgeted variable factory overhead is $5.00 per direct-labor hour; the budgeted fixed factory overhead is $75,000 per month, of which $15,000 is factory depreciation. If the budgeted direct-labor time for December is 8,000 hours, then total budgeted factory overhead per direct-labor hour (rounded) is
A. $16.25. B. $12.50. C. $14.38. D. $9.38.

20. The cash budget must be prepared before you can complete the
A. raw materials purchases budget.
B. schedule of cash disbursements.
C. production budget.
D. budgeted balance sheet.

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Business 379 midterm solved papers

1. (TCO 1) What is the goal of financial management for a sole proprietorship? (Points : 3)

       decrease long-term debt to reduce the risk to the owner

       maximize net income given the resources of the firm

       maximize the market value of the equity

       minimize the tax impact on the proprietor

       minimize costs and increase production

Question 2.2. (TCO 1) Working capital management includes which of the following? (Points : 3)

       establishing the inventory level

       deciding when to pay suppliers

       determining the amount of cash needed on a daily basis

       establishing credit terms for customers

       all of the above

Question 3.3. (TCO 1) Market value reflects which of the following: (Points : 3)

       The amount someone is willing to pay today for an asset.

       The value of the asset based on generally-accepted accounting principles.

       The asset’s historical cost.

       A and B only

       None of the above

Question 4.4. (TCO 1) Which of the following is true regarding income statements? (Points : 3)

       It shows the revenue and expenses, based upon selected accounting methods.

       It reveals the net cash flows of a firm over a stated period of time.

       It reflects the financial position of a firm as of a particular date.

       It records revenue only when cash is received for the product or service provided.

       It records expenses based on the recognition principle.

Question 5.5. (TCO 1) Tato’s Pizza has sales of $625,000. They paid $43,000 in interest during the year and depreciation was $79,000. Administrative costs were $100,000 and other costs were $160,000. Assuming a tax rate of 35 percent, what is Tato’s Pizza net income?  (Points : 3)

       $157,950

       $322,000

       $243,000

       $200,000

Question 6.6. (TCO 1) Home Best Hardware had $315,000 in taxable income last year. Using the tax rates provided in Table 2.3, what is the marginal tax rate?(Points : 3)

       35%

       39%

       34%

       32%

Question 7.7. (TCO 1) Pizza A had earnings after taxes of $390,000 in the year 2008 and 300,000 shares outstanding. In year 2009, earnings after taxes increased by 20 percent to $468,000 and 25,000 new shares were issued for a total of 325,000 shares. What is the EPS figure for 2008? (Points : 3)

       $1.30

       $1.44

       $0.77

       $0.69

Question 8.8. (TCO 1) The income statement reflects: (Points : 3)

       income and expenses at the time when those items affect the cash flows of a firm.

       income and expenses in accordance with GAAP.

       the cash flows in accordance with GAAP.

       the flow of cash into and out of a firm during a stated period of time.

       the flow of cash into and out of a firm as of a particular date.

Question 9.9. (TCO 1) Print Imaging has EBIT of $150,000, interest of $30,000, taxes of $50,000, and depreciation of $50,000. What is the company’s operating cash flow? (Points : 3)

       $120,000

       $180,000

       $170,000

       $150,000

       $120,000

Question 10.10. (TCO 3) Mark deposited $1,000 today, in an account that pays eight percent interest, compounded semi-annually. Which one of the following statements is correct concerning this investment? (Points : 3)

       Mark will earn more interest in year 4 than he will in year 3.

       Mark will receive equal interest payments every six months over the life of the investment.

       Mark would have earned more interest if he had invested in an account paying 8 percent simple interest.

       Mark would have earned more interest if he had invested in an account paying annual interest.

       Mark will earn less and less interest each year over the life of the investment.

Question 11.11. (TCO 3) Mr. Smith will receive $7,500 a year for the next 14 years from his trust. If the interest rate on this investment is eight percent, what is the approximate current value of these future payments? (Points : 3)

       $61,800

       $53,500

       $113,400

       $97,200

Question 12.12. (TCO 3) Your neighbor just received a credit offer in an e-mail. The company is offering him $6,000 at 12.8 percent interest. The monthly payment is only $110. If he accepts this offer, how long will it take him to pay off the loan? (Points : 3)

       81.00 months

       81.50 months

       83 months

       82.17 months

       90.70 months

13. (TCO 3) Fine Oak Woodworks is considering a project that has cash flows of $5,000, $3,000, and $8,000 for the next three years. If the appropriate discount rate of this project is 10 percent, which of the following statements is true? (Points : 3)

       The current value of the project’s inflows is $16,000

       The approximate current value of the project’s inflows is $13,000

       The current value of the project’s inflows is somewhere in between $14,000 and $16,000

       The project should be rejected because its present value is negative

Question 14.14. (TCO 4) You are considering two investments. Investment I is in a software company, and Investment II is an engineering company. The investments offer the following cash flows:

Year       Software Company         Engineering Company

1              $5,000   $15,000

2              $3,000   $8,000

3              $4,000   $9,000

4              $3,600   $11,000

If the appropriate discount rate is 10 percent, what is the approximate present value of the Engineering Company investment? (Points : 3)

       $33,200

       $34,500

       $42,000

       $43,500

Question 15.15. (TCO 3) North Bank offers you an APR of 9.76 percent compounded semiannually, and South Bank offers you an effective rate of 9 percent on a business loan. Which bank should you choose and why? (Points : 3)

       South Bank because its effective rate is higher.

       North Bank because the APR is lower.

       South Bank because its effective rate is lower.

       North Bank because its effective rate is lower.

1. (TCO 3) Tim needs to borrow $5,000 for two years. The loan will be repaid in one lump sum at the end of the loan term. Which one of the following interest rates is best for Tim? (Points : 3)

       7.5 percent simple interest

       7.5 percent interest, compounded monthly

       8.0 percent simple interest

       8.0 percent interest, compounded annually

       8.0 percent interest, compounded monthly

Question 2.2. (TCO 3) Which one of the following is an example of an annuity, but not a perpetuity? (Points : 3)

       unequal payments each month, for 18 months

       payments of equal amount each quarter forever

       unequal payments each year forever

       equal payments every six months for 48 months

       unending equal payments every other month

Question 3.3. (TCO 3) Fanta Cola has $1,000 par value bonds outstanding at 12 percent interest. The bonds mature in 25 years. What is the current price of the bond if the YTM is 16 percent? Assume annual payments. (Points : 3)

       $1315

       $1300

       $756

       $1000

Question 4.4. (TCO 6 and 8) Which one of the following statements is correct? (Points : 3)

       Bond issuers maintain a listing of bondholders when bonds are issued in bearer form.

       An indenture, is a contract between a corporation and its shareholders.

       Collateralized bonds are called debentures.

       The description of any property used to secure a bond issue is included in the bond indenture.

Question 5.5. (TCO 3) Bonds issued by Blue Sky Airlines have a face value of $1,000 and currently sell for $1,180. The annual coupon payments are $125. If the bonds have 20 years until maturity, what is the approximate YTM of the bonds? (Points : 3)

       10.50%

       11.50%

       11.75%

       12%

Question 6.6. (TCO 3) Bean Coffee issued preferred stock many years ago. It carries a dividend of $8 per share, fixed. As time has passed, yields have decreased from the original eight percent (at the time of issuance) to six percent. What was the current price of the stock? Hint: Yield is the same as required rate of return. (Points : 3)

       $100

       $133

       $102

       $86.40

       None of the above

Question 7.7. (TCO 3) Intelligence Research, Inc. will pay a common stock dividend of $1.60 at the end of the year. The required rate of return by common stockholders is 13 percent. The firm has a constant growth rate of seven percent. What is the current price of the stock? (Points : 3)

       $23

       $32

       $27

       $29

Question 8.8. (TCO 3) Royal Electric paid a $4 dividend last year. The dividend is expected to grow at a constant rate of six percent over the next four years. Common stockholders require a 13 percent return. What are the values of the dividends for years 1, 2 and 3, respectively? (Points : 3)

       $4, $4.5 and $4.8

       $4.24, $4.76 and $5.05

       $4.24, $4.49, $4.76

       $4, $4.50, $5.05

Question 9.9. (TCO 6) Which of the following is true regarding the primary market? (Points : 3)

       it is the market where the largest number of shares are traded on a daily basis.

       it is the market in which the largest number of issues are listed.

       it is the market with the largest number of participants.

       it is the market where new securities are offered.

       it is the market where shareholders trade most frequently with each other.

Question 10.10. (TCO 6) A member of the NYSE who trades on the floor of the exchange for his or her personal account is called a(n): (Points : 3)

       specialist.

       independent broker.

       floor trader.

       stand-alone agent.

       dealer.

Question 11.11. (TCO 6) The annual interest on a bond divided by the bond's market price is called the: (Points : 3)

       yield to maturity.

       yield to call.

       total yield.

       required yield.

       current yield.

Question 12.12. (TCO 6) Star Industries has one outstanding bond issue. An indenture provision prohibits the firm from redeeming the bonds during the first two years. This provision is referred to as a _____ provision. (Points : 3)

       deferred call

       market

       liquidity

       debenture

       sinking fund

Question 13.13. (TCO 8) Which of the following is true regarding bonds? (Points : 3)

       Most bonds do not carry default risk.

       Municipal bonds are free of default risk.

       Bonds are not sensitive to changes in the interest rates.

       Moody’s and Standard and Poor’s provide information regarding a bond’s interest rate risk.

       None of the above is true

Question 14.14. (TCO 6) Which of the following is not a floating-rate bond? (Points : 3)

       A bond that adjusts the coupon payments based on an interest rate index, such as the T-bill.

       An EE Savings Bond issued by the U.S. government.

       A bond that does not have any coupons until maturity.

       A bond that adjusts the coupon and face value payment based on inflation.

       TIPS

Question 15.15. (TCO 6) Which of the following is true regarding put bonds? Select all that apply: (Points : 3)

       Have coupons that depend on the company’s income

       Can be exchanged for a fixed number of shares before maturity only

       Can be exchanged for a fixed number of shares before maturity

       Allow the holder to require the issuer to buy the bond back

1. (TCO 1) In a general partnership, each partner is personally liable for: (Points : 3)

       the partnership debts that he or she personally obtained for the firm.

       his or her proportionate share of all partnership debts, regardless of which partner incurred that debt.

       the total debts of the partnership, even if he or she was unaware of those debts.

       the debts of the partnership, up to the amount he or she invested in the firm.

       all personal and partnership debts incurred by any partner, even if he or she was unaware of those debts.

Question 2.2. (TCO 1) Trademarks are classified as: (Points : 3)

       short-term assets.

       current liabilities.

       long-term debt.

       tangible fixed assets.

       intangible fixed assets.

4 Short Answer essays:

1.            (TCO 1) Can you provide some examples of recent, well-known unethical behavior cases? Explain the situation in one or two sentences.

2.            What are some real-life scenarios where you can apply the time value of money?  Present two or three scenarios. Briefly explain your rationale.

3.            Explain some of the key risks associated with bonds.

4. What are some of the features of zero-coupon bonds that make them attractive to certain investors? Which type of investors will be most interested in these bonds?

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