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Financial Math
High-tex Engineering Company Limited wishes to set flexible budgets for each of its operating departments. A separate maintenance department performs all routine and major repair works on the company’s equipment and facilities. The company has determined that maintenance department performs all routine and major repair works on the company’s equipment and facilities. The company has determined that maintenance cost is primarily a function of machine hours worked in the various production departments.
The maintenance cost incurred and the actual machine hours worked during the months of January, February, March and April 2003 were as follows:
Required:
a) Determine the cost estimation function using:
i High-low method. (2 marks)
ii Regression analysis (2 marks)
b) Using the regression function estimate:
i The maintenance costs that would have been incurred if the machine hours were expected to be 900 in the month of May 2003. (1 mark)
The maintenance cost incurred and the actual machine hours worked during the months of January, February, March and April 2003 were as follows:
Required:
a) Determine the cost estimation function using:
i High-low method. (2 marks)
ii Regression analysis (2 marks)
b) Using the regression function estimate:
i The maintenance costs that would have been incurred if the machine hours were expected to be 900 in the month of May 2003. (1 mark)
Financial Math
Watt Lovell Ltd. (WLL) is trying to decide whether or not to drill for oil on a particular site in North Eastern Kenya. The Chief Engineer has assessed the probabilities that there will be oil as follow, based on past experience.Oil 0.2, No oil 0.8
It is possible for WLL to hire a firm of international consultants to carry out a complete survey of the site. WLL has used the firm many times before and has made the following estimates:
1. If there really is oil, then there is a 95% chance that the report will be favourable.
2. If there is no oil then there is only a 10% chance that the report will indicate that there is oil.
The following additional information is also provided:
· The cost of drilling is Sh.10 million.
· The value of the benefits if oil is found is Sh.70 million
· The cost of obtaining information is Sh.3 million.
a) Advise the company on whether to acquire additional information from the consultants
b) Compute the value of imperfect information. (2 marks)
It is possible for WLL to hire a firm of international consultants to carry out a complete survey of the site. WLL has used the firm many times before and has made the following estimates:
1. If there really is oil, then there is a 95% chance that the report will be favourable.
2. If there is no oil then there is only a 10% chance that the report will indicate that there is oil.
The following additional information is also provided:
· The cost of drilling is Sh.10 million.
· The value of the benefits if oil is found is Sh.70 million
· The cost of obtaining information is Sh.3 million.
a) Advise the company on whether to acquire additional information from the consultants
b) Compute the value of imperfect information. (2 marks)
Financial Math
A bakery bakes cakes the manageress does not know the cost of each cake. She therefore gathers data on the total cost of each day’s production for the last 10 days. The results are shown in the table below;
Day number of cakes (00 units) Total costs (SH 000)
1 22.5 23.0
2 21.0 21.6
3 27.5 23.3
4 21.5 24.0
5 30.0 28.2
6 20.0 22.4
7 24.0 23.1
8 26.5 25.3
9 18.3 20.1
19 17.0 16.5
Required
(1) estimate the total cost function using the ordinaryleast squres method . state the fixed cost and unit cost?
(2) If each cake is sold at SH 10 ,determine the breakeven number of cakes?
Day number of cakes (00 units) Total costs (SH 000)
1 22.5 23.0
2 21.0 21.6
3 27.5 23.3
4 21.5 24.0
5 30.0 28.2
6 20.0 22.4
7 24.0 23.1
8 26.5 25.3
9 18.3 20.1
19 17.0 16.5
Required
(1) estimate the total cost function using the ordinaryleast squres method . state the fixed cost and unit cost?
(2) If each cake is sold at SH 10 ,determine the breakeven number of cakes?
Financial Math
What is the effective annual rate of interest if $900.00900.00 grows to $1400.001400.00 in years compounded quarterly? round 4 decimal places as needed.
Financial Math
Find the nominal annual rate of interest compounded semi-annually that is equivalent to 4.2 %4.2% compounded quarterly. round 4 decimals
Financial Math
A bank pays 11.7% compounded monthly on certain types of deposits. If interest is compounded semi-annually, what nominal rate of interest will maintain the same effective rate of interest?
Financial Math
A loan is to be amortized by semi-annual payments of $5,700 each with the interest at 15% compounded semi-annually. If the outstanding balance at the end of 6 years is $78,890.24.
A) Find the original amount borrowed.
B) How may regular semi-annual payments are needed?
C) What is the repayment of the principal in the 11th payment?
A) Find the original amount borrowed.
B) How may regular semi-annual payments are needed?
C) What is the repayment of the principal in the 11th payment?
Financial Math
Tuition of $1517 will be due when the spring term begins in 4months. What amount should a student deposit today, at 3.43%, to have enough to pay the tuition?
Financial Math
Suppose that a shop has N boxes of chocolates, which will expire in a week’s time. The chocolates are priced at $4 per box. The shop owner is wondering if he should offer a 25% discount and price these chocolates at $3 instead. The probability of selling D boxes of chocolates in a week depends on the price as follows: $4:
P(D=1) = 0.5 P(D=2) = 0.4 P(D=3) = 0.1 $3: P(D=1) = 0.25 P(D=2) = 0.25 P(D=3) = 0.5
Determine the values of N where the shop owner should price the chocolates at $4 and $3, respectively.
P(D=1) = 0.5 P(D=2) = 0.4 P(D=3) = 0.1 $3: P(D=1) = 0.25 P(D=2) = 0.25 P(D=3) = 0.5
Determine the values of N where the shop owner should price the chocolates at $4 and $3, respectively.
Financial Math
how to design 2 different systems of mobile phone towers that will provide 100% coverage of the area.
