Related questions with answers

Abbas Manufacturing produces wheels for cars. It holds high inventory levels so that one-off orders from major car manufacturers can be satisfied quickly. The world's big car manufacturers demand long credit periods from their suppliers of three months. Bruno has prepared the following cash flow forecast for the next three months:

$000JulyAugustSeptemberCash inflowsCash from debtors’ payments550475545Sale of old equipment0050Total cash in550475595Cash outflowsMaterials purchased160175170Employee costs185185190New computers01450Other costs155125135Total cash out500630495Opening bank balance(75)(25)(180)Net cash flow50(155)xClosing bank balance(25)(180)y\begin{matrix} \text{\$000} & \text{July} & \text{August} & \text{September}\\ \text{Cash inflows}\\ \text{Cash from debtors' payments} & \text{550} & \text{475} & \text{545}\\ \text{Sale of old equipment} & \text{0} & \text{0} & \text{50}\\ \text{Total cash in} & \text{550} & \text{475} & \text{595}\\ \text{Cash outflows} & \quad & \quad & \quad\\ \text{Materials purchased} & \text{160} & \text{175} & \text{170}\\ \text{Employee costs} & \text{185} & \text{185} & \text{190}\\ \text{New computers} & \text{0} & \text{145} & \text{0}\\ \text{Other costs} & \text{155} & \text{125} & \text{135}\\ \text{Total cash out} & \text{500} & \text{630} & \text{495}\\ \text{Opening bank balance} & \text{(75)} & \text{(25)} & \text{(180)}\\ \text{Net cash flow} & \text{50} & \text{(155)} & \text{x}\\ \text{Closing bank balance} & \text{(25)} & \text{(180)} & \text{y}\\ \end{matrix}

a) What is meant by ’net cash flow’? [2]b) Identify two reasons why Abbas Manufacturing needs high amounts of cash or working capital.[2]c) Calculate the values for x and y in the cash flow forecast. Show your working.[4]d) Amend the cash flow forecast for July assuming cash from debtors and material costs are going to be 10 per cent higher than originally forecast. Show your working.[6]e) Using the cash flow forecast above, advise Abbas Manufacturing on the best ways for the business to reduce its bank overdraft (negative closing balance). Justify your advice.[6]\begin{matrix} \text{a) What is meant by 'net cash flow'? } & \text{[2]}\\ \text{b) Identify two reasons why Abbas Manufacturing needs high amounts of cash or working capital.} & \text{[2]}\\ \text{c) Calculate the values for x and y in the cash flow forecast. Show your working.} & \text{[4]}\\ \text{d) Amend the cash flow forecast for July assuming cash from debtors and material costs are going to be 10 per cent higher than originally forecast. Show your working.} & \text{[6]}\\ \text{e) Using the cash flow forecast above, advise Abbas Manufacturing on the best ways for the business to reduce its bank overdraft (negative closing balance). Justify your advice.} & \text{[6]}\\ \end{matrix}

Question

Table of yearly discharge (cubic kilometers of water) of the Mississippi river gives the volume of water discharged by the Mississippi River into th Gulf of Mexico for each year from 1954 to 2001. The units are cubic kilometers of water-the Mississippi is a big river.

(a) Make a graph of the distribution of water volume. Describe the overall shape of the distribution and any outliers.

(b) Based on the shape of the distribution, do you expect the mean to be close to the median, clearly less than the median, or clearly greater than the median? Why? Find the mean and the median to check your answer.

 YEAR  DISCHARGE  YEAR  DISCHARGE  YEAR  DISCHARGE 195429019705401986600195542019714801987450195639019726001988420195761019738801989630195855019747101990680195944019756701991700196047019764201992510196160019774301993900196255019785601994640196336019798001995590196439019805001996670196550019814201997680196641019826401998690196746019837701999580196851019847102000390196956019856802001580\begin{array}{cc|cc|cc} \text { YEAR } & \text { DISCHARGE } & \text { YEAR } & \text { DISCHARGE } & \text { YEAR } & \text { DISCHARGE } \\ \hline 1954 & 290 & 1970 & 540 & 1986 & 600 \\ \hline 1955 & 420 & 1971 & 480 & 1987 & 450 \\ \hline 1956 & 390 & 1972 & 600 & 1988 & 420 \\ \hline 1957 & 610 & 1973 & 880 & 1989 & 630 \\ \hline 1958 & 550 & 1974 & 710 & 1990 & 680 \\ \hline 1959 & 440 & 1975 & 670 & 1991 & 700 \\ \hline 1960 & 470 & 1976 & 420 & 1992 & 510 \\ \hline 1961 & 600 & 1977 & 430 & 1993 & 900 \\ \hline 1962 & 550 & 1978 & 560 & 1994 & 640 \\ \hline 1963 & 360 & 1979 & 800 & 1995 & 590 \\ \hline 1964 & 390 & 1980 & 500 & 1996 & 670 \\ \hline 1965 & 500 & 1981 & 420 & 1997 & 680 \\ \hline 1966 & 410 & 1982 & 640 & 1998 & 690 \\ \hline 1967 & 460 & 1983 & 770 & 1999 & 580 \\ \hline 1968 & 510 & 1984 & 710 & 2000 & 390 \\ \hline 1969 & 560 & 1985 & 680 & 2001 & 580 \\ \hline \end{array}

(c) Based on the shape of the distribution, does it seem reasonable to use xˉ\bar{x} and s to describe the center and variability of this distribution? Why? Find xˉ\bar{x} and s if you think they are a good choice. Otherwise, find the five-number summary.

Solution

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a. HISTOGRAM

The width of the bars has to be the same and the height has to be equal to the frequency.

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