Let X be the number of students who show up for a professor’s office hour on a particular day. Suppose that the pmf of X is $p(0) = .20, p(1) = .25, p(2) = .30, p(3) = .15,$ and $p(4) = .10$. What is the probability that the professor shows up?

The accounting department of a large limousine company is analyzing the costs of its services. The cost data and level of activity for the past 16 months are presented on the following page:

In addition to the above information, you learn that the accounting department had the following total costs for the past 16 months for each of the following:

Required
What is the cost per unit for (1) paychecks processed, (2) customer accounts maintained, and (3) special analyses performed?

Name the accounts debited and credited for each of the following transactions. a. Billing a customer for work done. b. Receipt of cash from customer on account. c. Purchase of office supplies on account. d. Purchase of 15 gallons of gasoline for the delivery truck.

Examine the social and economic impacts of the green revolution in India. What were the effects of these advances in technology?

What was the role of women in Chinese families, and how did their role vary depending on social status?

What are the words to use when writing a job description?

Refer to the financial statements of American Eagle Outfitters in Appendix B, Urban Outfitters in Appendix C, and the Industry Ratio Report in Appendix D at the end of this book.

Required:

1. What was Advertising Expense for each company for the most recent year? Where did you find the information?

2. Compute the percentage of Advertising Expense to Net Sales for the most recent year for both companies. Which company incurred the higher percentage? Show computations. Are you able to perform the same comparison for the previous two years? If so, show the computations. If not, explain why not.

3. Compare the Advertising Expense to Net Sales ratio for the most recent year computed in requirement (2) to the industry average found in the Industry Ratio Report (Appendix D). Were these two companies spending more or less than their average competitor on advertising (on a relative basis)? What does this ratio tell you about the general effectiveness of each company’s advertising strategy?

4. Both companies include a note to the financial statements explaining the accounting policy for advertising. How do the policies differ, if at all?

5. Compute each company’s net profit margin for the three years reported. What do your results suggest to you about each company over time and in comparison to each other?

6. Compare each company’s net profit margin for the most recent year to the industry average net profit margin in the Industry Ratio Report. Were these two companies performing better or worse than the average company in the industry?

Posting a $2,500 purchase of office supplies on accow1t appears as follows:

$$\overset{\normalsize\text{Cash}}{\begin{array}{c|c} \hline \phantom{2,500\qquad\quad\qquad}&\text{2,500\qquad\qquad\quad} \end{array}}\qquad \overset{\normalsize\text{Office Supplies}}{\begin{array}{c|c} \hline \text{\qquad\quad\qquad2,500}&\phantom{2,500\qquad\qquad\quad} \end{array}}\\ \phantom{s}\\ \overset{\normalsize\text{Office Supplies}}{\begin{array}{c|c} \hline \phantom{2,500\qquad\quad\qquad}&\text{2,500\qquad\qquad\quad} \end{array}}\qquad \overset{\normalsize\text{Accounts Payable}}{\begin{array}{c|c} \hline \text{\qquad\quad\qquad2,500}&\phantom{2,500\qquad\qquad\quad} \end{array}}\\ \phantom{s}\\ \overset{\normalsize\text{Office Supplies}}{\begin{array}{c|c} \hline \text{\qquad\quad\qquad2,500}&\phantom{2,500\qquad\qquad\quad} \end{array}}\qquad \overset{\normalsize\text{Accounts Receivable}}{\begin{array}{c|c} \hline \phantom{2,500\qquad\quad\qquad}&\text{2,500\qquad\qquad\quad} \end{array}}\\ \phantom{s}\\ \overset{\normalsize\text{Office Supplies}}{\begin{array}{l|c} \hline \text{\qquad\quad\qquad2,500}&\phantom{2,500\qquad\qquad\quad} \end{array}}\qquad \overset{\normalsize\text{Accounts Payable}}{\begin{array}{c|c} \hline \phantom{2,500\qquad\quad\qquad}&\text{2,500\qquad\qquad\quad} \end{array}}$$

How can social media help a firm generate new product ideas and recruit employees?

The table below lists the 18 films in which actor Will Smith has starred through 2008, along with the gross domestic box office receipts and the year for each movie.

$$\begin{array}{lr} \text{ } & \text{Domestic Box}\\ \text{Movie} & \text{Office Receipts}\\ \hline \text{Hancock, 2008} & \text{$\$ 227,946,274$}\\ \text{Seven Pounds, 2008} & \text{$\$ 69,951,824$}\\ \text{I Am Legend, 2007} & \text{$\$ 256,386,216$}\\ \text{The Pursuit of Happyness, 2006} & \text{$\$ 162,586,036$}\\ \text{Hitch, 2005} & \text{$\$ 177,575,142$}\\ \text{Shark Tale, 2004} & \text{$\$ 161,412,000$}\\ \text{I, Robot, 2004} & \text{$\$ 144,801,023$}\\ \text{Bad Boys II, 2003} & \text{$\$ 138,540,870$}\\ \text{Men in Black 2, 2002} & \text{$\$ 190,418,803$}\\ \text{Ali, 2001} & \text{$\$ 58,200,000$}\\ \text{The Legend of Bagger Vance, 2000} & \text{$\$ 30,695,000$}\\ \text{Wild Wild West, 1999} & \text{$\$ 113,745,000$}\\ \text{Enemy of the State, 1998} & \text{$\$ 111,544,000$}\\ \text{Men in Black, 1997} & \text{$\$ 250,107,128$}\\ \text{Independence Day, 1996} & \text{$\$ 306,124,000$}\\ \text{Bad Boys, 1995} & \text{$\$ 65,807,000$}\\ \text{Made in America, 1993} & \text{$\$ 44,942,000$}\\ \text{Six Degrees of Separation, 1993} & \text{$\$ 6,410,000$}\\ \end{array}$$

a. Find the mean domestic box office receipts for Will Smith's movies. Which movie has box office receipts closest to the mean? b. Find the standard deviation for the data. c. What percent of the movies have box office receipts within standard deviation of the mean? Within 2 standard deviations of the mean?

You are an economic adviser to a candidate for national office. She asks you for a summary of the economic consequences of a balanced-budget rule for the federal government and for your recommendation on whether she should support such a rule. How do you respond?

Bob’s Baskets, Inc., manufactures and sells two types of baskets, deluxe and standard. Last year, Bob’s Baskets had the following costs and revenues:

$$\begin{array}{c} \textbf{BOB’S BASKETS, INC.}\\ \textbf{Income Statement}\\ \end{array}$$

Bob’s Baskets currently uses labor costs to allocate all overhead but is considering implementing an activity-based costing system. After interviewing the sales and production staff, management decides to allocate administrative costs on the basis of direct labor costs but to use the following bases to allocate the remaining overhead:

Required
Write a report to management stating why product line profits differ using activity-based costing compared to the traditional approach. Indicate whether activity-based costing provides more accurate information and why (if you believe it does provide more accurate information). Indicate in your report how the use of labor-based overhead allocation could cause management at Bob’s Baskets to make suboptimal decisions.

Case 2: P/E Ratios

One of the more closely watched ratios by investors is the price/earnings (P/E) ratio. By dividing price per share by earnings per share, analysts get insight into the value the market attaches to a company's earnings. More specifically, a high P/E ratio (in comparison to companies in the same industry) may suggest the stock is overpriced. Also, there is some evidence that companies with low P/E ratios are underpriced and tend to outperform the market. However, the ratio can be misleading.

P/E ratios are sometimes misleading because the E (earnings) is subject to a number of assumptions and estimates that could result in overstated earnings and a lower P/E. Some analysts conduct "revenue analysis" to evaluate the quality of an earnings number. Revenues are less subject to management estimates and all earnings must begin with revenues. These analysts also compute the price-to-sales ratio (PSR = price per share + sales per share) to assess whether a company is performing well compared to similar companies. If a company has a price-to-sales ratio significantly higher than its competitors, investors may be betting on a stock that has yet to prove itself.

Instructions

a. Identify some of the estimates or assumptions that could result in overstated earnings.

b. Compute the P/E ratio and the PSR for Tootsie Roll and Hershey for 2017.

c. Use these data to compare the quality of each company's earnings.

A device for performing boiling experiments consists of a copper bar $(k=400 \mathrm{W} / \mathrm{m} \cdot \mathrm{K})$, which is exposed to a boiling liquid at one end, encapsulates an electrical heater at the other end, and is well insulated from its surroundings at all but the exposed surface. Thermocouples inserted in the bar are used to measure temperatures at distances of $x_{1}=10 \mathrm{mm}$ and $x_{2}=25 \mathrm{mm}$ from the surface. (a) An experiment is performed to determine the boiling characteristics of a special coating applied to the exposed surface. Under steady-state conditions, nucleate boiling is maintained in saturated water at atmospheric pressure, and values of $T_{1}=133.7^{\circ} \mathrm{C}$ and $T_{2}=158.6^{\circ} \mathrm{C}$ are recorded. If n=1, what value of the coefficient $C_{s, f}$ is associated with the Rohsenow correlation? (b) Assuming applicability of the Rohsenow correlation with the value $C_{s, f}$ determined from part (a), compute and plot the excess temperature $\Delta T_{e}$ as a function of the boiling heat flux for $10^{5} \leq q_{s}^{\prime \prime} \leq 10^{6} \mathrm{W} / \mathrm{m}^{2}$. What are the corresponding values of $T_{1}$ and $T_{2}$ for $q_{s}^{\prime \prime}=10^{6} \mathrm{W} / \mathrm{m}^{2} ?$ If $q_{s}^{\prime \prime}$ were increaset to $1.5 \times 10^{6} \mathrm{W} / \mathrm{m}^{2}$, could the foregoing results be extrapolated to infer the corresponding values of $\Delta T_{e}, T_{1}$, and $T_{2} ?$