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Compact Electronics is a leading manufacturer of digital camera equipment. Assume the following transactions occur during the year ended December 31, 2018. Record any amounts as a result of each of these contingencies. 1. Accounts receivable were $29 million (all credit) at the end of 2018. Although no specific customer accounts have been shown to be uncollectible, the company estimates that 3% of accounts receivable will eventually prove uncollectible. 2. Compact Electronics is the plaintiff in a$5 million lawsuit filed against a supplier. The suit is in final appeal, and attorneys advise it is virtually certain that Compact Electronics will win and be awarded $3.5 million. 3. In November 2018, Compact Electronics became aware of a design flaw in one of its digital camera models. A product recall appears probable and would likely cost the company$600,000. 4. Compact Electronics is the defendant in a patent infringement lawsuit brought by a competitor. It appears reasonably likely Compact Electronics will lose the case, and potential losses are estimated to be in the range of $2.5 to$3.5 million.
Two numerically controlled drill presses are being considered by the production department of Zunni’s Manufacturing; one must be selected. Comparison data is shown in the table below. MARR is 10 percent/year.
Initial Investment Estimated Life Estimated Salvage Value Annual Operating Cost Annual Maintenance Cost Drill Press T$20,00010 years $5,000$12,000$2,000 Drill Press M $30,00010 years $7,000$6,000$4,000
a. What is the annual worth of each drill press?
b. Which drill press should be recommended?
The director of graduate admissions at a local university is analyzing the relationship between scores on the Graduate Record Examination (GRE) and subsequent performance in graduate school, as measured by a student's grade point average (GPA). She uses a sample of 7 students who graduated within the past five years, as shown in the accompanying table.
Student GRE GPA 115003.4214003.5310003.0410502.9511003.0612503.378002.7
a. Calculate and interpret the Spearman rank correlation coefficient rs′.
b. Specify the competing hypotheses to determine whether the Spearman rank correlation coefficien is greater than zero.
c. At the 5% significance level, specify the critical value and the decision rule.
d. Are GRE and GPA positively correlated? Explain.