Refer to this chapter's opening feature about Apple. Assume that the owners decide to open a new company with an innovative mobile app devoted to microblogging for accountants and those learning accounting. This new company will be called AccountApp.

Required

1. AccountApp obtains a $500,000 loan and the two owners contribute$250,000 in total from their ownsavings in exchange for ownership of the new company.

a. What is the new company's total amount of liabilities plus equity?

b. What is the new company's total amount of assets?

2. If the new company earns $80,250 in net income in the first year of operation, compute its return on assets (assume average assets equal$750,000). Assess its performance if competitors average a 10% return.

Refer to this chapter's opening feature about Netflix. Assume that the owner decides to open a new company with an innovative mobile app devoted to microblogging for accountants and those learning accounting. This new company will be called AccountApp.

1. AccountApp obtains a $500,000 loan, and the owner contributes$250,000 in total from his own savings in exchange for ownership of the new company.

a. What is the new company's total amount of liabilities plus equity?

b. What is the new company's total amount of assets?

2. If the new company earns $80,250 in net income in the first year of operation, compute its return on assets (assume average assets equal$750,000). Assess its performance if competitors average a 10% return.

A power plant is built to provide district heating of buildings that requires 90$^{\circ} \mathrm{C}$ liquid water at 150 kPa. The district heating water is returned at 50$^{\circ} \mathrm{C}$, 100 kPa in a closed loop in an amount such that 20 MW of power is delivered. This hot water is produced from a steam power cycle with a boiler making steam at 5 MPa, 600$^{\circ} \mathrm{C}$, delivered to the steam turbine. The steam cycle could have its condenser operate at 90$^{\circ} \mathrm{C}$, providing the power to the district heating. It could also be done with extraction of steam from the turbine. Suggest a system and evaluate its performance in terms of the cogenerated amount of turbine work.

In 11,105 at-bats in the game after facing Tim Wakefield, hitters had a batting average of $0.265$.

(a) If we assume that these hitters have an ability of $0.274$, explain how to use a spinner to simulate the results of these at-bats.

(b) One hundred trials of a simulation were conducted assuming that the ABILITY of hitters was $0.274$ in 11,105 at-bats. The simulated batting average at the end of each trial was recorded in the dotplot below. Describe what information this dotplot provides.

(c) Would it be surprising for these hitters to have a PERFORMANCE as low as $0.265$ by RANDOM CHANCE? Explain using the results of the simulation.

(d) Is there convincing evidence that batters have a lower ABILITY to hit the day after facing Tim Wakefield? Explain.

You are concerned about the effects of texting on driving performance. Design a study to test the response time of drivers while texting and while driving only. How many seconds does it take for a driver to respond when a leading car hits the brakes? a. Describe the explanatory and response variables in the study. b. What are the treatments? c. What should you consider when selecting participants? d. Your research partner wants to divide participants randomly into two groups: one to drive without distraction and one to text and drive simultaneously. Is this a good idea? Why or why not? e. Identify any lurking variables that could interfere with this study. f. How can blinding be used in this study?

Norris Company implemented a quality improvement program and tracked the following for the 5 years:

$$\begin{array}{lccc} & \text { Quality Costs } & \text { Actual Sales } & \text { Costs as a Percentage of Sales } \\ \hline 20 \times 1 & \$ 880,000 & \$ 4,000,000 & 22.00 \% \\ 20 \times 2 & 840,000 & 4,200,000 & 20.00 \\ 20 \times 3 & 765,000 & 4,500,000 & 17.00 \\ 20 \times 4 & 700,000 & 5,000,000 & 14.00 \\ 20 \times 5 & 594,000 & 5,400,000 & 11.00 \end{array}$$

By cost category as a percentage of sales for the same period of time:

$$\begin{array}{lcccc} & \text { Prevention } & \text { Appraisal } & \text { Internal Failure } & \text { External Failure } \\ \hline 20 \mathrm{X} 1 & 1.50 \% & 2.50 \% & 6.50 \% & 11.50 \% \\ 20 \mathrm{X} 2 & 2.75 & 3.25 & 4.00 & 10.00 \\ 20 \mathrm{X} 3 & 3.00 & 5.00 & 2.75 & 6.25 \\ 20 \mathrm{X} 4 & 3.50 & 3.50 & 2.00 & 5.00 \\ 20 \mathrm{X} 5 & 3.75 & 2.25 & 1.50 & 3.50 \end{array}$$

1. Prepare a bar graph that reveals the trend in quality cost as a percentage of sales (time on the horizontal axis and percentages on the vertical). Comment on the message of the graph.

2. Prepare a bar graph for each cost category as a percentage of sales. What does this graph tell you?

The following observations are on stopping distance (ft) of a particular truck at 20 mph under specified experimental conditions (“Experimental Measurement of the Stopping Performance of a Tractor-Semitrailer from Multiple Speeds,” NHTSA, DOT HS 811 488, June 2011):

$$\begin{matrix} \text{32.1} & \text{30.6} & \text{31.4} & \text{30.4} & \text{31.0} & \text{31.9}\\ \end{matrix}$$

The cited report states that under these conditions, the maximum allowable stopping distance is 30. A normal probability plot validates the assumption that stopping distance is normally distributed. Determine the probability of a type II error when $\alpha= .01, \sigma=.65$, and the actual value of m is 31. Repeat this for $\mu=32$.

In order to study the relationship between the amount of sleep a student gets and his or her school performance, a researcher collected data from 120 students. The two-way frequency table shows the number of students who passed and failed an exam and the number of students who got more or less than 6 hours of sleep the night before.

To the nearest percent, find the probability that a student who got less than 6 hours of sleep failed the exam.

A square cross-section duct $(0.5 \mathrm{~m} \times 0.5 \mathrm{~m} \times 30 \mathrm{~m})$ is used to convey air $\left(\rho=1.1 \mathrm{~kg} / \mathrm{m}^{3}\right)$ into a clean room in an electronics manufacturing facility. The air is supplied by a fan and passes through a filter installed in the duct. The duct friction factor is $f=0.03$, the filter has a loss coefficient of $K=12$, and the clean room is kept at a positive gage pressure of $50 \mathrm{~Pa}$. The fan performance is given by $\Delta p=1020-25 Q-30 Q^{2}$, where $\Delta p$ $\mathrm{(Pa)}$ is the pressure generated by the fan at flow rate $Q\left(\mathrm{~m}^{3} / \mathrm{s}\right)$. Find the flow rate delivered to the room.

The job performance of a new employee when learning a repetitive task (as on an assembly line) improves very quickly at first, then grows more slowly over time. This can be modeled by the function $P(t)=a+b \ln t$, where a and b are constants that depend on the type of task and the training of the employee. The number of circuit boards an associate can assemble from its component parts depends on the length of time the association has been working. This output is modeled by $B(t)=1+2.3 \ln t$, where $B(t)$ is the number of boards assembled daily after working $t$ days. (a) How many boards are an employee completing after 9 days on the job? (b) How long will it take until the employee is able to complete 10 boards per day?

Match each concept with its best description by entering its letter A through E in the blank.

$$\begin{matrix} \text{\_\_\_\_\_ 1. Just-in-time manufacturing} & \text{ A. Focuses on quality throughout the production process}\\ \text{\_\_\_\_\_ 2. Continuous improvement} & \text{B. Flexible product designs can be modified to accommodate customer choices.}\\ \text{\_\_\_\_\_ 3. Customer orientation} & \text{C. Every manager and employee constantly looks for ways to improve company operations.}\\ \text{\_\_\_\_\_ 4. Total quality management} & \text{D. Reports on financial, social, and environmental performance.}\\ \text{\_\_\_\_\_ 5. Triple bottom line} & \text{E. Inventory is acquired or produced only as needed.}\\ \end{matrix}$$

Choose a word to replace the italicized word in the sentence. All of the possible choices have similar definitions, but the correct answer will have a connotation that best suits the context and does not render the sentence awkward in tone or content. When choices seem close, look for a clue in the context that makes one choice better than the other.

$$\begin{array}{llll}\text { typical } & \text { crime } & \text { problem } & \text { hackneyed } \\ \text { imperious } & \text { show } & \text { intentions } & \text { machinations } \\ \text { affectation } & \text { failure } & \text { normal } & \end{array}$$

Not wanting to trouble his grandma with his many worries, Luke put on a[n] performance of cheerfulness when he visited her this week.

Better word: ______

Assume the role of assistant buyer for a costume jewelry store. You are ordering a shipment of earrings in five styles from a supplier. The cost of the earrings is $\$ 1.50$ per pair. You know that if you set too low a selling price the earrings will not sell well. The buyer (judge) has asked you to prepare a pricing strategy for the earrings. Among the decisions you must make is whether to price all the styles at one price point or to price the different styles at separate price points.

Present your pricing strategy to your supervisor (judge).

You will be evaluated on how well you meet the following performance indicator:

Select promotional pricing strategies used to adjust base prices

We could improve the performance of the waterproofing process discussed in the previous exercise by making an adjustment that moves the center of the process to $\mu=2500 \mathrm{~mm}$, the center of the specifications. We should do this even if the original specifications remain in force, because this will require less sealer and therefore cost less. Suppose that we succeed in moving $\mu$ to 2500 with no change in the process variability $\sigma$, estimated by $s=383.8$. (a) What are $\mathrm{C}^{\wedge} \mathrm{p}$ and $\mathrm{C}^{\wedge} \mathrm{pk}$ with the original specifications? Compare the values with those from part (a) of the previous exercise. (b) What are $\mathrm{C}^{\wedge} \mathrm{p}$ and $\mathrm{C}^{\wedge} \mathrm{pk}$ with the tightened specifications? Again compare with the previous results.