Contemporary Mathematics for Business & Consumers
8th Edition
ISBN: 9781305585447
Author: Robert Brechner, Geroge Bergeman
Publisher: Cengage Learning
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Chapter 17, Problem 10CR
To determine
The formula for the depreciation per unit in production method units.
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McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $895 per set and have a variable cost of $431 per set. The company has spent $200,000 for a marketing study that determined the company will sell 80,000 sets per year for seven years. The marketing study also determined that the company will lose sales of 8,600 sets per year of its high-priced clubs. The high-priced clubs sell at $1,325 and have variable costs of $645. The company will also increase sales of its cheap clubs by 10,800 sets per year. The cheap clubs sell for $340 and have variable costs of $141 per set. The fixed costs each year will be $14,350,000. The company has also spent $1,500,000 on research and development for the new clubs. The plant and equipment required will cost $43,700,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $3,625,000 that will be returned at the end of the project. The tax rate is 25…
Chapter 17 Solutions
Contemporary Mathematics for Business & Consumers
Ch. 17.I - Wild Flour Bakery purchased a new bread oven for...Ch. 17.I - Prob. 2TIECh. 17.I - Prob. 3TIECh. 17.I - Prestige Limousine Sen ice purchased a limousine...Ch. 17.I - Prob. 1RECh. 17.I - Prob. 2RECh. 17.I - Prob. 3RECh. 17.I - Prob. 4RECh. 17.I - Prob. 5RECh. 17.I - Prob. 6RE
Ch. 17.I - Prob. 7RECh. 17.I - Prob. 8RECh. 17.I - The Huffy Laundromat purchased new washing...Ch. 17.I - Prob. 10RECh. 17.I - Prob. 11RECh. 17.I - Prob. 12RECh. 17.I - Prob. 13RECh. 17.I - Prob. 14RECh. 17.I - Prob. 15RECh. 17.I - Prob. 16RECh. 17.I - Prob. 17RECh. 17.I - Complete Exercises 18-23 as they relate to the...Ch. 17.I - Prob. 19RECh. 17.I - Prob. 20RECh. 17.I - Complete Exercises 18-23 as they relate to the...Ch. 17.I - Prob. 22RECh. 17.I - Complete Exercises 18-23 as they relate to the...Ch. 17.I - Prob. 24RECh. 17.I - Prob. 25RECh. 17.I - Prob. 26RECh. 17.I - Prob. 27RECh. 17.I - Prob. 28RECh. 17.I - Prob. 29RECh. 17.I - Prob. 30RECh. 17.I - Prob. 31RECh. 17.I - You are the accountant for Raleigh Industries, a...Ch. 17.I - BUSINESS DECISION: REPLACING AN ASSET Supreme Auto...Ch. 17.II - Prob. 5TIECh. 17.II - Prob. 6TIECh. 17.II - 1. Ink Masters Printing purchased a new printing...Ch. 17.II - Prob. 2RECh. 17.II - Prob. 3RECh. 17.II - Prob. 4RECh. 17.II - Prob. 5RECh. 17.II - All-That-Glitters Mining Company paid $49.250.000...Ch. 17.II - 7. Sequoia Timber Company purchased land...Ch. 17.II - Prob. 8RECh. 17 - Prob. 1CRCh. 17 - Prob. 2CRCh. 17 - 3. The useful _____ is the length of time an asset...Ch. 17 - Prob. 4CRCh. 17 - 5. Depreciation methods that assume an asset...Ch. 17 - Prob. 6CRCh. 17 - Prob. 7CRCh. 17 - 8. A method of accelerated depreciation that uses...Ch. 17 - Prob. 9CRCh. 17 - Prob. 10CRCh. 17 - Prob. 11CRCh. 17 - Prob. 12CRCh. 17 - Prob. 13CRCh. 17 - When natural resources are depleted, the average...Ch. 17 - Calculate the total cost, total depreciation, and...Ch. 17 - Calculate the total cost, total depreciation, and...Ch. 17 - Oxford Manufacturing. Inc., purchased new...Ch. 17 - Prob. 4ATCh. 17 - Prob. 5ATCh. 17 - Prob. 6ATCh. 17 - Prob. 7ATCh. 17 - Prob. 8ATCh. 17 - Prob. 9ATCh. 17 - Prob. 10ATCh. 17 - Prob. 11ATCh. 17 - Screen Gems Movie Theater purchased a new...Ch. 17 - Stone Age Concrete, Inc. MACRS Depreciation...Ch. 17 - Prob. 14ATCh. 17 - In January 2002. Marine Science Corporation was...
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- You have been hired as an intern to run analyses on the data and report the results back to Sarah; the five questions that Sarah needs you to address are given below. Does there appear to be a positive or negative relationship between price and screen size? Use a scatter plot to examine the relationship. Determine and interpret the correlation coefficient between the two variables. In your interpretation, discuss the direction of the relationship (positive, negative, or zero relationship). Also discuss the strength of the relationship. Estimate the relationship between screen size and price using a simple linear regression model and interpret the estimated coefficients. (In your interpretation, tell the dollar amount by which price will change for each unit of increase in screen size). Include the manufacturer dummy variable (Samsung=1, 0 otherwise) and estimate the relationship between screen size, price and manufacturer dummy as a multiple linear regression model. Interpret the…arrow_forwardDoes there appear to be a positive or negative relationship between price and screen size? Use a scatter plot to examine the relationship. How to take snapshots: if you use a MacBook, press Command+ Shift+4 to take snapshots. If you are using Windows, use the Snipping Tool to take snapshots. Question 1: Determine and interpret the correlation coefficient between the two variables. In your interpretation, discuss the direction of the relationship (positive, negative, or zero relationship). Also discuss the strength of the relationship. Value of correlation coefficient: Direction of the relationship (positive, negative, or zero relationship): Strength of the relationship (strong/moderate/weak): Question 2: Estimate the relationship between screen size and price using a simple linear regression model and interpret the estimated coefficients. In your interpretation, tell the dollar amount by which price will change for each unit of increase in screen size. (The answer for the…arrow_forwardTri-County Utilities, Inc., supplies natural gas to customers in a three-county area. The company purchases natural gas from two companies: Southern Gas and Northwest Gas. Demand forecasts for the coming winter season are as follows: Hamilton County, 400 units; Butler County, 200 units; and Clermont County, 300 units. Contracts to provide the following quantities have been written: Southern Gas, 500 units; and Northwest Gas, 400 units. Distribution costs for the counties vary, depending upon the location of the suppliers. The distribution costs per unit (in thousands of dollars) are as follows. From To Hamilton Butler Clermont Southern Gas 10 20 15 Northwest Gas 12 15 18 (a) Develop a network representation of this problem. (Submit a file with a maximum size of 1 MB.) Choose File No file chosen Assignment 3 graph.docx Score: 1 out of 1 Comment: (b) Develop a linear programming model that can be used to determine the plan that will minimize total distribution costs (in thousands of…arrow_forward
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- For each month of the year, Taylor collected the average high temperatures in Jackson, Mississippi. He used the data to create the histogram shown. Which set of data did he use to create the histogram? A 55, 60, 64, 72, 73, 75, 77, 81, 83, 91, 91, 92\ 55,\ 60,\ 64,\ 72,\ 73,\ 75,\ 77,\ 81,\ 83,\ 91,\ 91,\ 92 55, 60, 64, 72, 73, 75, 77, 81, 83, 91, 91, 92 B 55, 57, 60, 65, 70, 71, 78, 79, 85, 86, 88, 91\ 55,\ 57,\ 60,\ 65,\ 70,\ 71,\ 78,\ 79,\ 85,\ 86,\ 88,\ 91 55, 57, 60, 65, 70, 71, 78, 79, 85, 86, 88, 91 C 55, 60, 63, 64, 65, 71, 83, 87, 88, 88, 89, 93\ 55,\ 60,\ 63,\ 64,\ 65,\ 71,\ 83,\ 87,\ 88,\ 88,\ 89,\ 93 55, 60, 63, 64, 65, 71, 83, 87, 88, 88, 89, 93 D 55, 58, 60, 66, 68, 75, 77, 82, 86, 89, 91, 91\ 55,\ 58,\ 60,\ 66,\ 68,\ 75,\ 77,\ 82,\ 86,\ 89,\ 91,\ 91 55, 58, 60, 66, 68, 75, 77, 82, 86, 89, 91, 91arrow_forwardIn this problem, we consider a Brownian motion (W+) t≥0. We consider a stock model (St)t>0 given (under the measure P) by d.St 0.03 St dt + 0.2 St dwt, with So 2. We assume that the interest rate is r = 0.06. The purpose of this problem is to price an option on this stock (which we name cubic put). This option is European-type, with maturity 3 months (i.e. T = 0.25 years), and payoff given by F = (8-5)+ (a) Write the Stochastic Differential Equation satisfied by (St) under the risk-neutral measure Q. (You don't need to prove it, simply give the answer.) (b) Give the price of a regular European put on (St) with maturity 3 months and strike K = 2. (c) Let X = S. Find the Stochastic Differential Equation satisfied by the process (Xt) under the measure Q. (d) Find an explicit expression for X₁ = S3 under measure Q. (e) Using the results above, find the price of the cubic put option mentioned above. (f) Is the price in (e) the same as in question (b)? (Explain why.)arrow_forwardProblem 4. Margrabe formula and the Greeks (20 pts) In the homework, we determined the Margrabe formula for the price of an option allowing you to swap an x-stock for a y-stock at time T. For stocks with initial values xo, yo, common volatility σ and correlation p, the formula was given by Fo=yo (d+)-x0Þ(d_), where In (±² Ꭲ d+ õ√T and σ = σ√√√2(1 - p). дго (a) We want to determine a "Greek" for ỡ on the option: find a formula for θα (b) Is дго θα positive or negative? (c) We consider a situation in which the correlation p between the two stocks increases: what can you say about the price Fo? (d) Assume that yo< xo and p = 1. What is the price of the option?arrow_forward
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