Laser News Technology, Inc. manufactures computerized laser printing equipment used by newspaper publishers throughout North America. In recent years, the company's market share has been eroded by stiff competition from Asian and European competitors. Price and product quality are the two key areas in which companies compete in this market.

Ben McDonough, Laser News Technology's president, decided to devote more resources to the improvement of product quality after learning that his company's products had been ranked fourth in product quality in a recent survey of newspaper publishers. He believed that the company could no longer afford to ignore the importance of product quality. McDonough set up a task force that he headed to implement a formal quality-improvement program. Included on the task force were representatives from engineering, sales, customer service, production, and accounting, as McDonough believed this was a companywide program and all employees should share the responsibility for its success.

After the first meeting of the task force, Sheila Hayes, manager of sales, asked Tony Reese, the production manager, what he thought of the proposed program. Reese replied, "I have reservations. Quality is too abstract to be attaching costs to it and then to be holding you and me responsible for cost improvements. I like to work with goals that I can see and count! I don't like my annual income to be based on a decrease in quality costs; there are too many variables that we have no control over!"

Laser News Technology's quality-improvement program has now been in operation for $18$ months, and the following quality cost report has recently been issued. As they were reviewing the report, Hayes asked Reese what he thought of the quality program now. "The work is really moving through the Production Department," replied Reese. "We used to spend time helping the Customer Service Department solve their problems, but they are leaving us alone these days. I have no complaints so far. I'll be anxious to see how much the program increases our bonuses."

$$\begin{gathered} \textbf{ LASER NEWS TECHNOLOGY, INC. } \\ \textbf{ Cost of Quality Report } \\ \textbf{ (in thousands) } \end{gathered}$$

$$\begin{array}{lrrrrrr} &&& \textbf{ Quarter Ended } \\ \hline & \textbf{ 6/30/x0 } & \textbf{ 9/30/x0 } & \textbf{ 12/31/x0 } & \textbf{ 3/31/x1 } & \textbf{ 6/30/x1 } & \textbf{ 9/30/x1 } \\ \text{ Prevention costs: } & \\ \quad \text{ Design review } & \$ 20 & \$ 102 & \$ 111 & \$ 100 & \$ 104 & \$ 95 \\ \quad \text{ Machine maintenance } & 215 & 215 & 202 & 190 & 170 & 160 \\ \quad \text{ Training suppliers } & \underline{ 5 } & \underline{ 45 } & \underline{ 25 } & \underline{ 20 } & \underline{ 20 } & \underline{ 15 } \\ \quad \quad \text{ Total } & \underline{ \underline{ \$ 240 }} & \underline{ \underline{ \$ 362 }} & \underline{ \underline{ \$ 338 }} & \underline{ \underline{ \$ 310 }} & \underline{ \underline{ \$ 294 }} & \underline{ \underline{ \$ 270 }} \\ \text{ Appraisal costs: } & \\ \quad \text{ Incoming inspection } & \$ 45 & \$ 53 & \$ 57 & \$ 36 & \$ 34 & \$ 22 \\ \quad \text{ Final testing } & \underline{ 160 } & \underline{ 160 } & \underline{ 154 } & \underline{ 140 } & \underline{ 115 } & \underline{ 94 } \\ \quad \quad \text{ Total } & \underline{ \$ 205 } & \underline{ \$ 213 } & \underline{ \$ 211 } & \underline{ \$ 176 } & \underline{ \$ 149 } & \underline{ \$ 116 } \\ \text{ Internal failure costs: } & \\ \quad \text{ Rework } & \$ 120 & \$ 106 & \$ 114 & \$ 88 & \$ 78 & \$ 62 \\ \quad \text{ Scrap } & \underline{ 68 } & \underline{ 64 } & \underline{ 53 } & \underline{ 42 } & \underline{ 40 } & \underline{ 40 } \\ \quad \quad \text{ Total } & \underline{ \$ 188 } & \underline{ \$ 170 } & \underline{ \$ 167 } & \underline{ \$ 130 } & \underline{ \$ 118 } & \underline{ \$ 102 } \\ \text{ External failure costs: } & \\ \quad \text{ Warranty repairs } & \$ 69 & \$ 31 & \$ 24 & \$ 25 & \$ 23 & \$ 23 \\ \quad \text{ Customer returns } & \underline{ 262 } & \underline{ 251 } & \underline{ 122 } & \underline{ 116 } & \underline{ 87 } & \underline{ 80 } \\ \quad \quad \text{ Total } & \underline{ \$ 331 } & \underline{ \$ 282 } & \underline{ \$ 146 } & \underline{ \$ 141 } & \underline{ \$ 110 } & \underline{ \$ 103 } \\ \text{ Total quality cost } & \underline{ \underline{ \$ 964 }} & \underline{ \underline{ \$ 1,027 }} & \underline{ \underline{ \$ 862 }} & \underline{ \underline{ \$ 757 }} & \underline{ \underline{ \$ 671 }} & \underline{ \underline{ \$ 591 }} \\ \text{ Total production cost } & \underline{ \underline{ \$ 4,120 }} & \underline{ \underline{ \$ 4,540 }} & \underline{ \underline{ \$ 4,380 }} & \underline{ \underline{ \$ 4,650 }} & \underline{ \underline{ \$ 4,580 }} & \underline{ \underline{ \$ 4,510 }} \end{array}$$

$1.$ Identify at least three factors that should be present for an organization to successfully implement a quality improvement program.

$2.$ By analyzing the cost of quality report presented, determine if Laser News Technology's quality improvement program has been successful. List specific evidence to support your answer.

$3.$ Discuss why Tony Reese's current reaction to the quality improvement program is more favorable than his initial reaction.

$4.$ Laser News Technology's president believed that the quality improvement program was essential and that the firm could no longer afford to ignore the importance of product quality. Discuss how the company could measure the opportunity cost of not implementing the quality-improvement program.

Brigitte buys the German grammar book and the German novel, Die Leiden des jungen Werther, for 64 Euro in total. Claude spends 98 Euro on the linear algebra text and the German grammar book, while Denise buys the linear algebra text and Werther, for 76 Euro. How much does each of the three books cost?

Below is a reading passage followed by several multiple-choice question. Carefully read the passage and choose the best answer for the question that follows.

The following passage describes the characteristics of the Maya, Inca, and Aztec cultures of Central and South America.

To the average North American, the mere mention of Maya, Aztec, or Inca civilization evokes thoughts of great, flat-topped pyramids of mysterious origin, secret cities perched on remote mountaintops, and booby-trapped temples brimming with treasure-hoards of gold. Indeed, impressions have not changed much since the age of the Spanish explorers, who, despite $5$ intentions of conquest, were also mystified by the cryptic civilizations of Mesoamerica and South America. Explorers may not have found the mythical golden city of El Dorado, but they did find three amazing cultures, each with unique characteristics.

Maya civilization, often considered to be the most exalted and mysterious of the three, inhabited the Yucatan Peninsula of Eastern Mexico as long ago as $2,600$ B.C. Emerging from a $10$ collection of city-states with no central government, the Maya reached a cultural peak between A.D. $250$ and $900$. The Maya, who developed an astrological calendar that allowed them to grow crops in poor soil, were originally thought to be a peaceful people, but archaeologists have since determined that intertribal warfare brought about their decline. Maya, like the Aztecs and Inca, also practiced human sacrifice. Ancient pyramids inscribed with weathered glyphs and characters from the most advanced ancient alphabet in the western hemisphere now sit abandoned, obscured by centuries of jungle growth. Maya descendants still inhabit the Yucatan, but the technology, religion, and practices of the ancient civilization must now be slowly exhumed and catalogued by archaeologists-a difficult task considering the Maya had no central ruling capital. The Maya existed in a network of city-states, with each ruling its immediate territory. Neither did $20$ the Maya have a single emperor, though its kings were venerated as godlike, as in the Inca and Aztec cultures.

The Aztecs, noted perhaps most often for their penchant for battle and human sacrifice, composed the second-largest pre-Columbian civilization in central America. Originally a nomadic society inhabiting the central basin of antediluvian Mexico, the various tribes who identified $25$ themselves as Aztec settled in the marshy region near Lake Texcoco and, in $1325$, founded the city of Tenochtitlan at the present site of Mexico City. Despite vicious religious practices, the Aztec demonstrated ingenuity by inventing an innovative farming technique to grow crops among the 30 canals of Tenochtitlan. Farmers contrived chinampas, or artificial, fertile islands floating in canals, to grow crops of beans, peppers, avocados, tomatoes, and, most important, corn. Ironically, the seemingly bloodthirsty culture, when not participating in an estimated $20,000$ human sacrifices a year, took great interest in the beauty of nature; Aztecs, who lacked plows or beasts of burden, took the time to grow beautiful flowers strictly for decoration. Before falling to the Spanish in $1521$, the Aztecs left several permanent contributions to history and to the explorers of the New World: chocolate, derived from indigenous cacao beans; tomatoes, potatoes, and numerous other vegetables that have long become staples to the rest of the world; and, as testament to the artisans among the Aztecs, an accurate, $24$-ton limestone calendar that took more than fifty years to construct.

Inca, whose feats of engineering baffle modern architects, dominated the west coast of South America from $1300$ to $1535$. Like the Aztecs, the Inca practiced human sacrifice and lacked a written language; however, the Inca made up for language shortcomings with advanced architecture and a complex government. In addition to having the most advanced medical and surgical techniques of the ancient Americas, the Inca constructed more than $12,000$ miles of roadway and aqueducts to supply taxpaying and labor-contributing tribes throughout the empire.

The precise, intricate stonemasonry of Inca pyramids, fortresses, and walls commands the respect of even modern masons. Inca architecture still dots the Andean mountains and highlands as the timeless endeavors of a lost people.

In spite of the achievements and predominance of the two civilizations intact after Columbus arrived in the New World, they found themselves at the mercy of the Spaniards during the sixteenth century. Hernando Cortez, who sought control of the Aztec Empire, or Mexican Empire, began his quest in $1519$ by forming alliances with tribes who were displeased with the leadership of Montezuma II in Tenochtitlan. Cortez went to the city and took Montezuma hostage, taking advantage of the fact that Aztecs thought that the Spaniards were descendants of their god, Quetzalcoatl, and had come to fulfill a prophecy. Aztec prophets had prognosticated that bearded men would arrive from the east, or the land of the sun god-the Aztec conception of heaven. Montezuma was killed during a short uprising in $1521$ while instructing the Aztecs to make peace with the Spaniards. The Spaniards were forced to retreat from the city, but they soon regrouped and besieged the Aztec capital. After the eventual surrender, Cortez burned the city and destroyed the greatest monuments of Aztec culture.

The Inca Empire shared a fate similar to that of the Aztec, but at the hands of a conquistador more sinister than Cortez. Francisco Pizarro, motivated by legends of treasure, captured the Inca ruler Atahualpa during their first meeting. Atahualpa offered a ransom for himself that consisted of a roomful of gold. Atahualpa revealed the location of the treasure to Pizarro, and Pizarro promptly executed the ruler and seized control of Cuzco, the Inca capital. Pizarro was eventually killed by his own people, but the Inca Empire was forever lost.

Aztecs, Inca, and Maya who escaped the iron swords and gunpowder of the Europeans instead suffered the old world diseases that accompanied the explorers. Entire tribes vanished as smallpox, scarlet fever, and influenza decimated the native population of the Americas. Those who survived were forced to abandon their customs and live beneath Spanish rule for the next three centuries.

Millions of tourists now visit Mexico and Peru to see the remnants of the Maya, Aztec, and Inca civilizations. Though weathered or overgrown, the relics stand as permanent markers of the ingenuity and art of the pre-Columbian civilizations. Archaeologists and treasure hunters scour newly discovered burial platforms and caves in search of knowledge that might contribute to the modern understanding of the lost cultures, and also, undoubtedly, to find relics made of that one material valued by both the ancient and modern worlds: gold.

In the third paragraph, the term "pre-Columbian" describes

A. all civilization that preceded the nation of Columbia.

B. the time leading to the foundation of Washington, D.C.

C. everything before the year in which the Inca Empire fell.

D. the new name that Cortez gave to Tenochtitlan.

E. the time before Columbus arrived in the Americas.

Use the Buffalo Bell Corporation financial statements that follow to answer questions. Buffalo Bell Corporation Consolidated Statements of Financial Position (In millions)

$$\begin{matrix} \quad & \text{December 31,2012} & \text{December 31,2011}\\ \text{Assets:} & \quad & \quad\\ \text{Current Assets } & \quad & \quad\\ \text{Cash and cash equivalents} & \text{\$ 4,333 } & \text{\$ 4,226 }\\ \text{Accounts and notes receivable } & \text{3,400 } & \text{2,403 }\\ \text{Short-term investments } & \text{845} & \text{520}\\ \text{Inventories, at cost} & \text{433} & \text{411}\\ \text{Prepaid expense and other current assets } & \text{1,638 } & \text{1,226 }\\ \text{Total current assets } & \text{10,649 } & \text{8,786 }\\ \text{Property and equipment, net} & \text{1,555 } & \text{907}\\ \text{Investments} & \text{6,804 } & \text{5,199 }\\ \text{Other non-current assets} & \text{303} & \text{155}\\ \text{Total assets} & \text{\$19,311} & \text{\$15,047}\\ \text{Liabilities and stockholders’ equity: } & \quad & \quad\\ \text{Current liabilities } & \quad & \quad\\ \text{Accounts payable} & \text{\$ 7,708 } & \text{\$ 6,009 }\\ \text{Accrued and other liabilities } & \text{3,676 } & \text{3,033 }\\ \text{Total current liabilities } & \text{11,384 } & \text{9,042 }\\ \text{Long-term debt } & \text{304} & \text{305}\\ \text{Other non-current liabilities } & \text{1,701 } & \text{1,179 }\\ \text{Total liabilities } & \text{13,389} & \text{10,526}\\ \text{Stockholders’ equity} & \quad & \quad\\ \text{Preferred stock and capital in excess of \$0.02 par value; shares issued and outstanding: none} & \text{ -} & \text{ -}\\ \text{Common stock and capital in excess of \$0.05 par value; shares authorized: 6,000; shares issued: 2,163 and 1,903, respectively } & \text{7,803 } & \text{7,001 }\\ \text{Treasury stock, at cost: 183 and 123 shares, respectively } & \text{(6,444) } & \text{(4,401) }\\ \text{Retained earnings } & \text{4,676 } & \text{1,990 }\\ \text{Other comprehensive loss } & \text{(79) } & \text{(25}\\ \text{Other} & \text{(34) } & \text{(44) }\\ \text{Total stockholders’ equity } & \text{5,922 } & \text{4,521 }\\ \text{Total liabilities and stockholders’ equity} & \text{\$19,311} & \text{\$15,047}\\ \end{matrix}$$

Buffalo Bell Corporation Consolidated Statements of Income (In millions, except per share amounts)

$$\begin{matrix} \quad & \text{Year ended December 31, 2012} & \text{Year ended December 31, 2011} & \text{Year ended December 31, 2010}\\ \text{Net Revenue} & \text{\$42,666 } & \text{\$35,220 } & \text{\$31,111 }\\ \text{Cost of goods sold } & \text{35,147 } & \text{29,255 } & \text{25,492 }\\ \text{Gross profit } & \text{7,519} & \text{5,965} & \text{5,619}\\ \text{Operating expenses:} & \quad & \quad & \quad\\ \text{Selling, general, and administrative } & \text{3,341 } & \text{3,250 } & \text{2,985 }\\ \text{Research, development, and engineering } & \text{544} & \text{553} & \text{536}\\ \text{Special charges } & \text{ -} & \text{ -} & \text{512}\\ \text{Total operating expenses } & \text{3,885} & \text{3,803 } & \text{4,033 }\\ \text{Operating income } & \text{3,634 } & \text{2,162 } & \text{1,586 }\\ \text{Investment and other income (loss), net } & \text{153} & \text{196} & \text{(30) }\\ \text{Income before income taxes } & \text{3,787 } & \text{2,358 } & \text{1,556 }\\ \text{Income tax expense } & \text{1,136 } & \text{940} & \text{472}\\ \text{Net income } & \text{\$ 2,651} & \text{\$ 1,418} & \text{\$ 1,084 }\\ \text{Earnings per common share: } & \quad & \quad & \quad\\ \text{Basic} & \text{\$ 1.41} & \text{\$ 0.95} & \text{\$ 0.37 }\\ \end{matrix}$$

Book value per share of Buffalo Bell’s common stock outstanding at December 31, 2012, was a. 137.9. b. $35,147. c.$2.99. d. 20.1.

Find the formula for the sum. If available, use linear algebra software. $1^{4}+2^{4}+3^{4}+\cdots+n^{4}$

Below is a reading passage followed by several multiple-choice question. Carefully read the passage and choose the best answer for the question that follows.

The following passage describes the characteristics of the Maya, Inca, and Aztec cultures of Central and South America.

To the average North American, the mere mention of Maya, Aztec, or Inca civilization evokes thoughts of great, flat-topped pyramids of mysterious origin, secret cities perched on remote mountaintops, and booby-trapped temples brimming with treasure-hoards of gold. Indeed, impressions have not changed much since the age of the Spanish explorers, who, despite $5$ intentions of conquest, were also mystified by the cryptic civilizations of Mesoamerica and South America. Explorers may not have found the mythical golden city of El Dorado, but they did find three amazing cultures, each with unique characteristics.

Maya civilization, often considered to be the most exalted and mysterious of the three, inhabited the Yucatan Peninsula of Eastern Mexico as long ago as $2,600$ B.C. Emerging from a $10$ collection of city-states with no central government, the Maya reached a cultural peak between A.D. $250$ and $900$. The Maya, who developed an astrological calendar that allowed them to grow crops in poor soil, were originally thought to be a peaceful people, but archaeologists have since determined that intertribal warfare brought about their decline. Maya, like the Aztecs and Inca, also practiced human sacrifice. Ancient pyramids inscribed with weathered glyphs and characters from the most advanced ancient alphabet in the western hemisphere now sit abandoned, obscured by centuries of jungle growth. Maya descendants still inhabit the Yucatan, but the technology, religion, and practices of the ancient civilization must now be slowly exhumed and catalogued by archaeologists-a difficult task considering the Maya had no central ruling capital. The Maya existed in a network of city-states, with each ruling its immediate territory. Neither did $20$ the Maya have a single emperor, though its kings were venerated as godlike, as in the Inca and Aztec cultures.

The Aztecs, noted perhaps most often for their penchant for battle and human sacrifice, composed the second-largest pre-Columbian civilization in central America. Originally a nomadic society inhabiting the central basin of antediluvian Mexico, the various tribes who identified $25$ themselves as Aztec settled in the marshy region near Lake Texcoco and, in $1325$, founded the city of Tenochtitlan at the present site of Mexico City. Despite vicious religious practices, the Aztec demonstrated ingenuity by inventing an innovative farming technique to grow crops among the 30 canals of Tenochtitlan. Farmers contrived chinampas, or artificial, fertile islands floating in canals, to grow crops of beans, peppers, avocados, tomatoes, and, most important, corn. Ironically, the seemingly bloodthirsty culture, when not participating in an estimated $20,000$ human sacrifices a year, took great interest in the beauty of nature; Aztecs, who lacked plows or beasts of burden, took the time to grow beautiful flowers strictly for decoration. Before falling to the Spanish in $1521$, the Aztecs left several permanent contributions to history and to the explorers of the New World: chocolate, derived from indigenous cacao beans; tomatoes, potatoes, and numerous other vegetables that have long become staples to the rest of the world; and, as testament to the artisans among the Aztecs, an accurate, $24$-ton limestone calendar that took more than fifty years to construct.

Inca, whose feats of engineering baffle modern architects, dominated the west coast of South America from $1300$ to $1535$. Like the Aztecs, the Inca practiced human sacrifice and lacked a written language; however, the Inca made up for language shortcomings with advanced architecture and a complex government. In addition to having the most advanced medical and surgical techniques of the ancient Americas, the Inca constructed more than $12,000$ miles of roadway and aqueducts to supply taxpaying and labor-contributing tribes throughout the empire.

The precise, intricate stonemasonry of Inca pyramids, fortresses, and walls commands the respect of even modern masons. Inca architecture still dots the Andean mountains and highlands as the timeless endeavors of a lost people.

In spite of the achievements and predominance of the two civilizations intact after Columbus arrived in the New World, they found themselves at the mercy of the Spaniards during the sixteenth century. Hernando Cortez, who sought control of the Aztec Empire, or Mexican Empire, began his quest in $1519$ by forming alliances with tribes who were displeased with the leadership of Montezuma II in Tenochtitlan. Cortez went to the city and took Montezuma hostage, taking advantage of the fact that Aztecs thought that the Spaniards were descendants of their god, Quetzalcoatl, and had come to fulfill a prophecy. Aztec prophets had prognosticated that bearded men would arrive from the east, or the land of the sun god-the Aztec conception of heaven. Montezuma was killed during a short uprising in $1521$ while instructing the Aztecs to make peace with the Spaniards. The Spaniards were forced to retreat from the city, but they soon regrouped and besieged the Aztec capital. After the eventual surrender, Cortez burned the city and destroyed the greatest monuments of Aztec culture.

The Inca Empire shared a fate similar to that of the Aztec, but at the hands of a conquistador more sinister than Cortez. Francisco Pizarro, motivated by legends of treasure, captured the Inca ruler Atahualpa during their first meeting. Atahualpa offered a ransom for himself that consisted of a roomful of gold. Atahualpa revealed the location of the treasure to Pizarro, and Pizarro promptly executed the ruler and seized control of Cuzco, the Inca capital. Pizarro was eventually killed by his own people, but the Inca Empire was forever lost.

Aztecs, Inca, and Maya who escaped the iron swords and gunpowder of the Europeans instead suffered the old world diseases that accompanied the explorers. Entire tribes vanished as smallpox, scarlet fever, and influenza decimated the native population of the Americas. Those who survived were forced to abandon their customs and live beneath Spanish rule for the next three centuries.

Millions of tourists now visit Mexico and Peru to see the remnants of the Maya, Aztec, and Inca civilizations. Though weathered or overgrown, the relics stand as permanent markers of the ingenuity and art of the pre-Columbian civilizations. Archaeologists and treasure hunters scour newly discovered burial platforms and caves in search of knowledge that might contribute to the modern understanding of the lost cultures, and also, undoubtedly, to find relics made of that one material valued by both the ancient and modern worlds: gold.

According to the passage, which choice best explains the disappearance of the Maya?

A. disease

B. war

C. enslavement

D. emigration

E. genocide

The National Football League (NFL) holds its annual draft of the nation’s best college football players in April each year. Prior to the draft, various sporting news services project the players who will be drafted along with the order in which each will be selected. The better players are selected earlier in the draft. For the 2009 draft, the colleges from the Southeastern Conference (SEC) and the Atlantic Coast Conference (ACC) were projected to have the most players who would be selected during the first round (SportProjection website, March 15, 2009). The player’s college and the projected draft position for seven players from each conference are as follows.

Southeastern Conference		Atlantic Coast Conference
Player’s College	Projected Draft Position	Player’s College	Projected Draft Position
Georgia	1	Georgia Tech	3
Alabama	2	Wake Forest	6
Vanderbilt	14	Virginia	8
Florida	18	Wake Forest	23
Mississippi	20	Florida State	25
Mississippi	24	Maryland	26
Auburn	27	Virginia	29

Using the projected draft position as an indicator of preference the NFL teams have for the two conferences, use the MWW test to determine if there is any difference between the NFL preferences for players from these two conferences? Use $\alpha$ = .05. What is the p-value? What is your conclusion?

Annually, nearly 1.8 million bachelor's degrees and over 750,000 master's degrees are awarded by postsecondary institutions in the United States (National Center for Education Statistics website, November, 2014). These graduates' fields of study are tracked by the Department of Education in the following categories: Business (B), computer sciences and engineering (CSE), Education (E), Humanities (H), Natural Sciences and Mathematics (NSM), Social and Behavioral Sciences (SBS), and Other (O). Consider the following 100-graduate samples: Bachelor's Degree Field of Study

$$\begin{array}{llllllllll}\text { SBS } & \text { H } & \text { H } & \text { H } & \text { E } & \text { B } & \text { O } & \text { SBS } & \text { NSM } & \text { CSE } \\ \text { O } & \text { B } & \text { B } & \text { O } & \text { O } & \text { H } & \text { B } & \text { O } & \text { SBS } & \text { O } \\ \text { H } & \text { CSE } & \text { CSE } & \text { O } & \text { CSE } & \text { B } & \text { H } & \text { O } & \text { O } & \text { SBS } \\ \text { SBS } & \text { SBS } & \text { B } & \text { H } & \text { NSM } & \text { B } & \text { B } & \text { O } & \text { SBS } & \text { SBS } \\ \text { B } & \text { H } & \text { SBS } & \text { O } & \text { B } & \text { B } & \text { O } & \text { O } & \text { B } & \text { O } \\ \text { O } & \text { H } & \text { SBS } & \text { H } & \text { CSE } & \text { CSE } & \text { B } & \text { E } & \text { CSE } & \text { SBS } \\ \text { SBS } & \text { NSM } & \text { NSM } & \text { CSE } & \text { H } & \text { H } & \text { E } & \text { E } & \text { SBS } & \text { CSE } \\ \text { NSM } & \text { NSM } & \text { SBS } & \text { O } & \text { H } & \text { H } & \text { B } & \text { SBS } & \text { SBS } & \text { NSM } \\ \text { H } & \text { B } & \text { B } & \text { O } & \text { O } & \text { O } & \text { NSM } & \text { H } & \text { E } & \text { B } \\ \text { E } & \text { B } & \text { O } & \text { B } & \text { B } & \text { B } & \text { O } & \text { O } & \text { O } & \text { O }\end{array}$$

Master's Degree Field of Study

$$\begin{array}{llllllllll}\text { O } & \text { O } & \text { B } & \text { O } & \text { B } & \text { E } & \text { B } & \text { H } & \text { E } & \text { B } \\ \text { O } & \text { E } & \text { SBS } & \text { B } & \text { CSE } & \text { H } & \text { B } & \text { E } & \text { E } & \text { O } \\ \text { O } & \text { B } & \text { B } & \text { O } & \text { E } & \text { CSE } & \text { NSM } & \text { O } & \text { B } & \text { E } \\ \text { H } & \text { H } & \text { B } & \text { E } & \text { SBS } & \text { E } & \text { E } & \text { B } & \text { O } & \text { E } \\ \text { SBS } & \text { B } & \text { B } & \text { CSE } & \text { H } & \text { B } & \text { B } & \text { CSE } & \text { SBS } & \text { B } \\ \text { CSE } & \text { B } & \text { E } & \text { CSE } & \text { B } & \text { E } & \text { CSE } & \text { O } & \text { E } & \text { O } \\ \text { B } & \text { O } & \text { E } & \text { O } & \text { B } & \text { NSM } & \text { H } & \text { E } & \text { B } & \text { E } \\ \text { B } & \text { E } & \text { B } & \text { O } & \text { E } & \text { E } & \text { H } & \text { O } & \text { O } & \text { O } \\ \text { CSE } & \text { O } & \text { O } & \text { H } & \text { B } & \text { O } & \text { B } & \text { E } & \text { CSE } & \text { O } \\ \text { E } & \text { O } & \text { SBS } & \text { E } & \text { E } & \text { O } & \text { SBS } & \text { B } & \text { B } & \text { O }\end{array}$$

a. Provide a percent frequency distribution of field of study for each degree. b. Construct a bar chart for field of study for each degree. c. What is the lowest percentage field of study for each degree? d. What is the highest percentage field of study for each degree? e. Which field of study has the largest increase in percentage from bachelor's to masters'?

For students with a background in linear algebra: Co1npare the theory for linear second-order equations with that for systems of $n$ linear equations in $n$ unknowns whose coefficient matrix has rank $n - 2$. Use the terminology from linear algebra; for example, subspace, basis, dimension, linear transformation, and kernel. Discuss both homogeneous and nonhomogeneous equations.

Below is a reading passage followed by several multiple-choice question. Carefully read the passage and choose the best answer for the question that follows.

The following passage describes the characteristics of the Maya, Inca, and Aztec cultures of Central and South America.

To the average North American, the mere mention of Maya, Aztec, or Inca civilization evokes thoughts of great, flat-topped pyramids of mysterious origin, secret cities perched on remote mountaintops, and booby-trapped temples brimming with treasure-hoards of gold. Indeed, impressions have not changed much since the age of the Spanish explorers, who, despite $5$ intentions of conquest, were also mystified by the cryptic civilizations of Mesoamerica and South America. Explorers may not have found the mythical golden city of El Dorado, but they did find three amazing cultures, each with unique characteristics.

Maya civilization, often considered to be the most exalted and mysterious of the three, inhabited the Yucatan Peninsula of Eastern Mexico as long ago as $2,600$ B.C. Emerging from a $10$ collection of city-states with no central government, the Maya reached a cultural peak between A.D. $250$ and $900$. The Maya, who developed an astrological calendar that allowed them to grow crops in poor soil, were originally thought to be a peaceful people, but archaeologists have since determined that intertribal warfare brought about their decline. Maya, like the Aztecs and Inca, also practiced human sacrifice. Ancient pyramids inscribed with weathered glyphs and characters from the most advanced ancient alphabet in the western hemisphere now sit abandoned, obscured by centuries of jungle growth. Maya descendants still inhabit the Yucatan, but the technology, religion, and practices of the ancient civilization must now be slowly exhumed and catalogued by archaeologists-a difficult task considering the Maya had no central ruling capital. The Maya existed in a network of city-states, with each ruling its immediate territory. Neither did $20$ the Maya have a single emperor, though its kings were venerated as godlike, as in the Inca and Aztec cultures.

The Aztecs, noted perhaps most often for their penchant for battle and human sacrifice, composed the second-largest pre-Columbian civilization in central America. Originally a nomadic society inhabiting the central basin of antediluvian Mexico, the various tribes who identified $25$ themselves as Aztec settled in the marshy region near Lake Texcoco and, in $1325$, founded the city of Tenochtitlan at the present site of Mexico City. Despite vicious religious practices, the Aztec demonstrated ingenuity by inventing an innovative farming technique to grow crops among the 30 canals of Tenochtitlan. Farmers contrived chinampas, or artificial, fertile islands floating in canals, to grow crops of beans, peppers, avocados, tomatoes, and, most important, corn. Ironically, the seemingly bloodthirsty culture, when not participating in an estimated $20,000$ human sacrifices a year, took great interest in the beauty of nature; Aztecs, who lacked plows or beasts of burden, took the time to grow beautiful flowers strictly for decoration. Before falling to the Spanish in $1521$, the Aztecs left several permanent contributions to history and to the explorers of the New World: chocolate, derived from indigenous cacao beans; tomatoes, potatoes, and numerous other vegetables that have long become staples to the rest of the world; and, as testament to the artisans among the Aztecs, an accurate, $24$-ton limestone calendar that took more than fifty years to construct.

Inca, whose feats of engineering baffle modern architects, dominated the west coast of South America from $1300$ to $1535$. Like the Aztecs, the Inca practiced human sacrifice and lacked a written language; however, the Inca made up for language shortcomings with advanced architecture and a complex government. In addition to having the most advanced medical and surgical techniques of the ancient Americas, the Inca constructed more than $12,000$ miles of roadway and aqueducts to supply taxpaying and labor-contributing tribes throughout the empire.

The precise, intricate stonemasonry of Inca pyramids, fortresses, and walls commands the respect of even modern masons. Inca architecture still dots the Andean mountains and highlands as the timeless endeavors of a lost people.

In spite of the achievements and predominance of the two civilizations intact after Columbus arrived in the New World, they found themselves at the mercy of the Spaniards during the sixteenth century. Hernando Cortez, who sought control of the Aztec Empire, or Mexican Empire, began his quest in $1519$ by forming alliances with tribes who were displeased with the leadership of Montezuma II in Tenochtitlan. Cortez went to the city and took Montezuma hostage, taking advantage of the fact that Aztecs thought that the Spaniards were descendants of their god, Quetzalcoatl, and had come to fulfill a prophecy. Aztec prophets had prognosticated that bearded men would arrive from the east, or the land of the sun god-the Aztec conception of heaven. Montezuma was killed during a short uprising in $1521$ while instructing the Aztecs to make peace with the Spaniards. The Spaniards were forced to retreat from the city, but they soon regrouped and besieged the Aztec capital. After the eventual surrender, Cortez burned the city and destroyed the greatest monuments of Aztec culture.

The Inca Empire shared a fate similar to that of the Aztec, but at the hands of a conquistador more sinister than Cortez. Francisco Pizarro, motivated by legends of treasure, captured the Inca ruler Atahualpa during their first meeting. Atahualpa offered a ransom for himself that consisted of a roomful of gold. Atahualpa revealed the location of the treasure to Pizarro, and Pizarro promptly executed the ruler and seized control of Cuzco, the Inca capital. Pizarro was eventually killed by his own people, but the Inca Empire was forever lost.

Aztecs, Inca, and Maya who escaped the iron swords and gunpowder of the Europeans instead suffered the old world diseases that accompanied the explorers. Entire tribes vanished as smallpox, scarlet fever, and influenza decimated the native population of the Americas. Those who survived were forced to abandon their customs and live beneath Spanish rule for the next three centuries.

Millions of tourists now visit Mexico and Peru to see the remnants of the Maya, Aztec, and Inca civilizations. Though weathered or overgrown, the relics stand as permanent markers of the ingenuity and art of the pre-Columbian civilizations. Archaeologists and treasure hunters scour newly discovered burial platforms and caves in search of knowledge that might contribute to the modern understanding of the lost cultures, and also, undoubtedly, to find relics made of that one material valued by both the ancient and modern worlds: gold.

Which of the following statements is implied by the following quotation lines?

"...the Inca constructed more than $12,000$ miles of roadway and aqueducts to supply taxpaying ...tribes throughout the empire."

A. The Inca had some type of central government.

B. Inca roadways were elevated high above the ground.

C. High taxes probably accelerated the fall of the Inca Empire.

D. The Inca wasted resources on building roadways.

E. The Inca decorated their aqueducts with gold.

Below is a reading passage followed by several multiple-choice question. Carefully read the passage and choose the best answer for the question that follows.

The following passage describes the characteristics of the Maya, Inca, and Aztec cultures of Central and South America.

To the average North American, the mere mention of Maya, Aztec, or Inca civilization evokes thoughts of great, flat-topped pyramids of mysterious origin, secret cities perched on remote mountaintops, and booby-trapped temples brimming with treasure-hoards of gold. Indeed, impressions have not changed much since the age of the Spanish explorers, who, despite $5$ intentions of conquest, were also mystified by the cryptic civilizations of Mesoamerica and South America. Explorers may not have found the mythical golden city of El Dorado, but they did find three amazing cultures, each with unique characteristics.

Maya civilization, often considered to be the most exalted and mysterious of the three, inhabited the Yucatan Peninsula of Eastern Mexico as long ago as $2,600$ B.C. Emerging from a $10$ collection of city-states with no central government, the Maya reached a cultural peak between A.D. $250$ and $900$. The Maya, who developed an astrological calendar that allowed them to grow crops in poor soil, were originally thought to be a peaceful people, but archaeologists have since determined that intertribal warfare brought about their decline. Maya, like the Aztecs and Inca, also practiced human sacrifice. Ancient pyramids inscribed with weathered glyphs and characters from the most advanced ancient alphabet in the western hemisphere now sit abandoned, obscured by centuries of jungle growth. Maya descendants still inhabit the Yucatan, but the technology, religion, and practices of the ancient civilization must now be slowly exhumed and catalogued by archaeologists-a difficult task considering the Maya had no central ruling capital. The Maya existed in a network of city-states, with each ruling its immediate territory. Neither did $20$ the Maya have a single emperor, though its kings were venerated as godlike, as in the Inca and Aztec cultures.

The Aztecs, noted perhaps most often for their penchant for battle and human sacrifice, composed the second-largest pre-Columbian civilization in central America. Originally a nomadic society inhabiting the central basin of antediluvian Mexico, the various tribes who identified $25$ themselves as Aztec settled in the marshy region near Lake Texcoco and, in $1325$, founded the city of Tenochtitlan at the present site of Mexico City. Despite vicious religious practices, the Aztec demonstrated ingenuity by inventing an innovative farming technique to grow crops among the 30 canals of Tenochtitlan. Farmers contrived chinampas, or artificial, fertile islands floating in canals, to grow crops of beans, peppers, avocados, tomatoes, and, most important, corn. Ironically, the seemingly bloodthirsty culture, when not participating in an estimated $20,000$ human sacrifices a year, took great interest in the beauty of nature; Aztecs, who lacked plows or beasts of burden, took the time to grow beautiful flowers strictly for decoration. Before falling to the Spanish in $1521$, the Aztecs left several permanent contributions to history and to the explorers of the New World: chocolate, derived from indigenous cacao beans; tomatoes, potatoes, and numerous other vegetables that have long become staples to the rest of the world; and, as testament to the artisans among the Aztecs, an accurate, $24$-ton limestone calendar that took more than fifty years to construct.

Inca, whose feats of engineering baffle modern architects, dominated the west coast of South America from $1300$ to $1535$. Like the Aztecs, the Inca practiced human sacrifice and lacked a written language; however, the Inca made up for language shortcomings with advanced architecture and a complex government. In addition to having the most advanced medical and surgical techniques of the ancient Americas, the Inca constructed more than $12,000$ miles of roadway and aqueducts to supply taxpaying and labor-contributing tribes throughout the empire.

The precise, intricate stonemasonry of Inca pyramids, fortresses, and walls commands the respect of even modern masons. Inca architecture still dots the Andean mountains and highlands as the timeless endeavors of a lost people.

In spite of the achievements and predominance of the two civilizations intact after Columbus arrived in the New World, they found themselves at the mercy of the Spaniards during the sixteenth century. Hernando Cortez, who sought control of the Aztec Empire, or Mexican Empire, began his quest in $1519$ by forming alliances with tribes who were displeased with the leadership of Montezuma II in Tenochtitlan. Cortez went to the city and took Montezuma hostage, taking advantage of the fact that Aztecs thought that the Spaniards were descendants of their god, Quetzalcoatl, and had come to fulfill a prophecy. Aztec prophets had prognosticated that bearded men would arrive from the east, or the land of the sun god-the Aztec conception of heaven. Montezuma was killed during a short uprising in $1521$ while instructing the Aztecs to make peace with the Spaniards. The Spaniards were forced to retreat from the city, but they soon regrouped and besieged the Aztec capital. After the eventual surrender, Cortez burned the city and destroyed the greatest monuments of Aztec culture.

The Inca Empire shared a fate similar to that of the Aztec, but at the hands of a conquistador more sinister than Cortez. Francisco Pizarro, motivated by legends of treasure, captured the Inca ruler Atahualpa during their first meeting. Atahualpa offered a ransom for himself that consisted of a roomful of gold. Atahualpa revealed the location of the treasure to Pizarro, and Pizarro promptly executed the ruler and seized control of Cuzco, the Inca capital. Pizarro was eventually killed by his own people, but the Inca Empire was forever lost.

Aztecs, Inca, and Maya who escaped the iron swords and gunpowder of the Europeans instead suffered the old world diseases that accompanied the explorers. Entire tribes vanished as smallpox, scarlet fever, and influenza decimated the native population of the Americas. Those who survived were forced to abandon their customs and live beneath Spanish rule for the next three centuries.

Millions of tourists now visit Mexico and Peru to see the remnants of the Maya, Aztec, and Inca civilizations. Though weathered or overgrown, the relics stand as permanent markers of the ingenuity and art of the pre-Columbian civilizations. Archaeologists and treasure hunters scour newly discovered burial platforms and caves in search of knowledge that might contribute to the modern understanding of the lost cultures, and also, undoubtedly, to find relics made of that one material valued by both the ancient and modern worlds: gold.

As it is used in line $22$ ,penchant most nearly means

A. aversion.

B. religion.

C. teaching.

D. tendency.

E. future.

Highly toxic wastewater is produced during the manufacturing of dry spun acrylic fiber. One way to lessen toxicity is to remove the nitrogen from the wastewater. A group of environmental engineers investigated a promising method-called anaerobic ammonium oxidation for nitrogen removal and reported the results in the Chemical Engineering Journal (Apr. 2013). A sample of 120 specimens of toxic wastewater were collected and each treated with the nitrogen removal method. The amount of nitrogen removed (measured in milligrams per liter) was determined as well as the amount of ammonium (milligrams per liter) used in the removal process. These data (simulated from information provided in the journal article) are saved in the NITRO file. The data for the first 5 specimens are shown below. A simple linear regression analysis, where y = amount of nitrogen removed and x = amount of ammonium used, is also shown in the accompanying SAS printout. a. Assess statistically the adequacy of the fit of the linear model. Do you recommend using the model for predicting nitrogen amount? b. On the SAS printout, locate a 95% prediction interval for nitrogen amount when amount of ammonium used is 100 milligrams per liter. Practically interpret the result. c. Will a 95% confidence interval for the mean nitrogen amount when amount of ammonium used is 100 milligrams per liter be wider or narrower than the interval, part b? Explain. First 5 observations of 120 $$ \begin{matrix} \text{Nitrogen} & \text{Ammonium}\\ \text{18.87} & \text{67.40}\\ \text{17.01} & \text{12.49}\\ \text{23.88} & \text{61.96}\\ \text{10.45} & \text{15.63}\\ \text{36.03} & \text{83.66}\\ \end{matrix} $$ The REG Procedure Model: MODEL 1 Dependent Variable: NlTRO_Y $$ \begin{matrix} \text{Number of Observations Read} & \text{120}\\ \text{t4umber of Observations Used} & \text{120}\\ \end{matrix} $$ Analysis of Variance. $$ \begin{matrix} \text{Source} & \text{DF} & \text{Sum of Squares} & \text{Mean Square} & \text{F Value} & \text{Pr > F}\\ \text{Model} & \text{1} & \text{88104} & \text{88104} & \text{1075.57} & \text{<.0001}\\ \text{Error} & \text{118} & \text{9665.80325} & \text{81.91359} & \text{ } & \text{ }\\ \text{Corrected Total} & \text{119} & \text{97770} & \text{ } & \text{ } & \text{ }\\ \end{matrix} $$ $$ \begin{matrix} \text{Root MSE} & \text{9.05061} & \text{R.Square} & \text{0.9011}\\ \text{Dependent Mean} & \text{67.91083} & \text{Adj R.Sq} & \text{0.9003}\\ \text{Coeff Var} & \text{13. 32720} & \text{ } & \text{ }\\ \end{matrix} $$ Parameter Estimates $$ \begin{matrix} \text{Variable} & \text{DF} & \text{Parameter Estimate} & \text{Standard Error} & \text{t Value} & \text{Pr > |t|}\\ \text{intercept} & \text{1} & \text{2.22255} & \text{2.16665} & \text{1 03} & \text{0.3071}\\ \text{AMMON_X} & \text{1} & \text{0.57637} & \text{0.01757} & \text{32.80} & \text{< .0001}\\ \end{matrix} $$ Output Statistics $$ \begin{matrix} \text{Obs} & \text{AMMON_X} & \text{Dependent Variable} & \text{Predicted Value} & \text{Std Error Mean Predict} & \text{95\\% CL Predict} & \text{Residual}\\ \text{1} & \text{100.0} & \text{.} & \text{59.8596} & \text{0.8619} & \text{41.8558 77.8634} & \text{.}\\ \text{2} & \text{67.4} & \text{18.8700} & \text{41.0699} & \text{1.1629} & \text{22.9999 59.1400} & \text{-22,1999}\\ \text{3} & \text{12.5} & \text{17.0100} & \text{9.4214} & \text{1.9655} & \text{-8.9190 27.7619} & \text{7.5886}\\ \text{4} & \text{62.0} & \text{23.8800} & \text{37.9345} & \text{1.2321} & \text{19.8465 56.0225} & \text{-14.0545}\\ \text{5} & \text{15.6} & \text{10.4500} & \text{11.2312} & \text{1.9156} & \text{-7.0885 29.6509} & \text{-0.7812}\\ \text{6} & \text{83.7} & \text{36.0300} & \text{50.4417} & \text{0.9830} & \text{32.4136 68.4698} & \text{-14.4117}\\ \end{matrix} $$

Use the Buffalo Bell Corporation financial statements that follow to answer questions. Buffalo Bell Corporation Consolidated Statements of Financial Position (In millions)

$$\begin{matrix} \quad & \text{December 31,2012} & \text{December 31,2011}\\ \text{Assets:} & \quad & \quad\\ \text{Current Assets } & \quad & \quad\\ \text{Cash and cash equivalents} & \text{\$ 4,333 } & \text{\$ 4,226 }\\ \text{Accounts and notes receivable } & \text{3,400 } & \text{2,403 }\\ \text{Short-term investments } & \text{845} & \text{520}\\ \text{Inventories, at cost} & \text{433} & \text{411}\\ \text{Prepaid expense and other current assets } & \text{1,638 } & \text{1,226 }\\ \text{Total current assets } & \text{10,649 } & \text{8,786 }\\ \text{Property and equipment, net} & \text{1,555 } & \text{907}\\ \text{Investments} & \text{6,804 } & \text{5,199 }\\ \text{Other non-current assets} & \text{303} & \text{155}\\ \text{Total assets} & \text{\$19,311} & \text{\$15,047}\\ \text{Liabilities and stockholders’ equity: } & \quad & \quad\\ \text{Current liabilities } & \quad & \quad\\ \text{Accounts payable} & \text{\$ 7,708 } & \text{\$ 6,009 }\\ \text{Accrued and other liabilities } & \text{3,676 } & \text{3,033 }\\ \text{Total current liabilities } & \text{11,384 } & \text{9,042 }\\ \text{Long-term debt } & \text{304} & \text{305}\\ \text{Other non-current liabilities } & \text{1,701 } & \text{1,179 }\\ \text{Total liabilities } & \text{13,389} & \text{10,526}\\ \text{Stockholders’ equity} & \quad & \quad\\ \text{Preferred stock and capital in excess of \$0.02 par value; shares issued and outstanding: none} & \text{ -} & \text{ -}\\ \text{Common stock and capital in excess of \$0.05 par value; shares authorized: 6,000; shares issued: 2,163 and 1,903, respectively } & \text{7,803 } & \text{7,001 }\\ \text{Treasury stock, at cost: 183 and 123 shares, respectively } & \text{(6,444) } & \text{(4,401) }\\ \text{Retained earnings } & \text{4,676 } & \text{1,990 }\\ \text{Other comprehensive loss } & \text{(79) } & \text{(25}\\ \text{Other} & \text{(34) } & \text{(44) }\\ \text{Total stockholders’ equity } & \text{5,922 } & \text{4,521 }\\ \text{Total liabilities and stockholders’ equity} & \text{\$19,311} & \text{\$15,047}\\ \end{matrix}$$

Buffalo Bell Corporation Consolidated Statements of Income (In millions, except per share amounts)

$$\begin{matrix} \quad & \text{Year ended December 31, 2012} & \text{Year ended December 31, 2011} & \text{Year ended December 31, 2010}\\ \text{Net Revenue} & \text{\$42,666 } & \text{\$35,220 } & \text{\$31,111 }\\ \text{Cost of goods sold } & \text{35,147 } & \text{29,255 } & \text{25,492 }\\ \text{Gross profit } & \text{7,519} & \text{5,965} & \text{5,619}\\ \text{Operating expenses:} & \quad & \quad & \quad\\ \text{Selling, general, and administrative } & \text{3,341 } & \text{3,250 } & \text{2,985 }\\ \text{Research, development, and engineering } & \text{544} & \text{553} & \text{536}\\ \text{Special charges } & \text{ -} & \text{ -} & \text{512}\\ \text{Total operating expenses } & \text{3,885} & \text{3,803 } & \text{4,033 }\\ \text{Operating income } & \text{3,634 } & \text{2,162 } & \text{1,586 }\\ \text{Investment and other income (loss), net } & \text{153} & \text{196} & \text{(30) }\\ \text{Income before income taxes } & \text{3,787 } & \text{2,358 } & \text{1,556 }\\ \text{Income tax expense } & \text{1,136 } & \text{940} & \text{472}\\ \text{Net income } & \text{\$ 2,651} & \text{\$ 1,418} & \text{\$ 1,084 }\\ \text{Earnings per common share: } & \quad & \quad & \quad\\ \text{Basic} & \text{\$ 1.41} & \text{\$ 0.95} & \text{\$ 0.37 }\\ \end{matrix}$$

Buffalo Bell’s quick (acid-test) ratio at year-end 2012 is closest to a. 0.75. b. $8,578 million. c. 0.45 d. 0.68

“If we can get that new robot to combine with our other automated equipment, we’ll have a complete flexible manufacturing system (FMS) in place in our Northridge plant,” said Hal Swain, production manager for Diller Products.

“Let’s just hope that reduced labor and inventory costs can justify its acquisition,” replied Linda Wycoff, the controller. “Otherwise, we’ll never get it. You know how the president feels about equipment paying for itself out of reduced costs.”

Selected data relating to the robot are provided below:

Cost of the robot	$1,600,000
Software and installation	$700,000
Annual savings in labor costs	?
Annual savings in inventory carrying   costs	$190,000
Monthly increase in power and maintenance costs	$2,500
Salvage value in 12 years	$90,000
Useful life	12 years

Engineering studies suggest that use of the robot will result in a savings of 20,000 direct labor-hours each year. The labor rate is$16 per hour. Also, the smoother work flow made possible by the FMS will allow the company to reduce the amount of inventory on hand by $300,000. The released funds will be available for use elsewhere in the company. This inventory reduction will take place in the first year of operation. The company’s required rate of return is 20%.

Required:

(Ignore income taxes.)

1. Determine the net annual cost savings if the robot is purchased. (Do not include the$300,000 inventory reduction or the salvage value in this computation.)

2. Compute the net present value of the proposed investment in the robot. Based on these data, would you recommend that the robot be purchased? Explain.

3. Assume that the robot is purchased. At the end of the first year, Linda Wycoff has found that some items didn’t work out as planned. Due to unforeseen problems, software and installation costs were $125,000 more than estimated, and direct labor has been reduced by only 17,500 hours per year, rather than by 20,000 hours. Assuming that all other cost data were accurate, does it appear that the company made a wise investment? Show computations, using the net present value format as in (2) above. (Hint: It might be helpful to place yourself back at the beginning of the first year, with the new data.)

4. Upon seeing your analysis in (3) above, the president stated, “That robot is the worst investment we’ve ever made. And here we’ll be stuck with it for years.”

a. Explain to the president what benefits other than cost savings might accrue from using the new robot and FMS.

b. Compute for the president the dollar amount of cash inflow that would be needed each year from the benefits in ( a ) above in order for the equipment to yield a 20% rate of return.