ACTIVITY: CAPITAL BUDGETING PRACTICEComplete the following and submit it in a Word document. Be sure to show your process and calculations:Assume you have just retired as the CEO of a successful company. A major publisher has offered you a book deal. The publisher will pay you $1 million up front if you agree to write a book about your experiences. You estimate that it will take three years to write the book. The time you spend writing will cause you to give up speaking engagements amounting to $500,000 per year. You estimate your opportunity cost to be 10%.Should you accept this deal? Plot a diagram that measures NPV (on the y-axis) vs. discount rate (on the x-axis) to solve this problem. (Hint: Have your scale on the x-axis go to 50% (discount rate)).Determine the IRR for this deal. (Hint: IRR is the point at which NPV = 0)Suppose you inform the publisher that it needs to sweeten the deal before you will accept it. The publisher offers $550,000 advance and $1,000,000 in four years when the book is published.Should you accept or reject the new offer? Again, plot a diagram that measures NVP (on the y-axis) vs. discount rate (on the x-axis) to solve this problem. (Hint: Have your scale on the x-axis go to 50% (discount rate)).Determine the IRRs for this deal (Hint: There are two IRRs for this problem).Discuss if the IRR rule for making budgetary decisions can be used in this case.Finally, you are able to get the publisher to increase your advance to $750,000, in addition to the $1 million when the book is published in four years.Should you accept or reject this new offer? Again, plot a diagram that measures NVP (on the y-axis) vs. discount rate (on the x-axis) to solve this problem. (Hint: Have your scale on the x-axis go to 50% (discount rate)).Determine the IRR for this deal.State three conclusions regarding the use of IRR vs. NPV that you can make from questions 2–4. Which is the stronger method to use (IRR or NPV), and why?By submitting this paper, you agree: (1) that you are submitting your paper to be used and stored as part of the SafeAssign™ services in accordance with the Blackboard Privacy Policy; (2) that your institution may use your paper in accordance with your institution's policies; and (3) that your use of SafeAssign will be without recourse against Blackboard Inc. and its affiliates.

Q1: The goal(s) of statistical procedures are topredict or infer what might happen in the futuredescribe what has happenedneither A nor B is correctboth A and B are correctQ2: ParameterA. descriptivearea ofQ4: Statistical A. B. C. D.E.A. inferential statistics B. descriptive statisticsquestions tend to fall into what two main categories? samples or populationsrelationships or categoriesrelationships or differencesdifferences or categories none of the aboveis to population as _________ is to samplestatisticmargin of errorinferentialQ3: The concept of generalizing from a few observations to an entire group is central to theQ5: An example of descriptive statistics would bebased on previous data, prediction of the expected number of fans who willshow up to a Tuesday night professional baseball gamecalculating the number of people who actually showed up to a professionalbaseball gameFor the following 4 questions (Q6 to Q9) identify the scale of measurement. Use the following system:nominalordinalintervalratioQ6: GenderQ7: The amount of time it takes you to showerQ8: The Fahrenheit temperature scaleQ9: Students voting for their preferred professors by ranking them2For the following 2 questions (Q10 to Q11) identify the following variables as either measurement or categorical.Use the following system:A. measurement B. categoricalQ10: Academic letter grade (i.e. A, A-, B+, B, and so forth)Q11: The number of points earned on a statistics examFor the following 2 questions (Q12 to Q13) identify the following variables as either discrete or continuous.Use the following system:A. discreteB. continuousQ12: The time elapsed since last ChristmasQ13: The number of cats you ownThe following 4 questions (Q14 to Q17) are based on the following situation:A biologist was investigating the number of eggs laid by snakes. She believes there is a difference between Rattlesnakes and King Cobras. Q14: What is the dependent variable?Q15: What is the independent variable?Q16: Is the dependent variable discrete or continuous?Q17: What is the scale of measurement of the dependent variable?__________ __________ __________ __________ Q18: A researcher was investigating whether gender, age of the student, and GPA of the student had a bearing on how much alcohol the average Ohio University student would drink on a typical weekend. How many dependent variables are involved with this research?A. one B. two C. three D. four3The following 2 questions (Q19 to Q20) are based on the following situation:A quality control supervisor measures the quality of steel ingot on a scale from 0 to 10. He designs an experiment in which three different temperatures and five different pressures are utilized, with 20 ingots produced at each Temperature-Pressure combination.Q19: What is/are the dependent variable(s)?quality of steeltemperaturepressuretwo of the above are correctQ20: What is/are the independent variable(s)?quality of steeltemperaturepressuretwo of the above are correctThe following 4 questions (Q21 to Q24) are based on the following article:PER CAPITA INCOME OF U.S. SPRINKS RELATIVE TO OTHER COUNTRIES(from UTTS, 2005, page 24)An independent research group, the Institute for Foreign Investment, has noted that theper capita income of Americans has been shrinking relative to some other countries. Using per capita income figures from the World Almanac and exchange rates from last Friday’s financial pages, the organization warned that per capita income for the United States has risen only 10% during the past 5 years, whereas per capita income for certain other countries has risen 50%. The researchers concluded that more foreign investment should be allowed in the United States to bolster the sagging economy.Use the following system to answer Q21 to Q24:A. Component 1 B. Component 2 C. Component 3 D. Component 4 E. Component 5 F. Component 6 G. Component 7Q21: What is one of the three components that (according to Utts) was BOTH relevant and NOT properly discussed within the article?4Q22: What is the second of the three components that (according to Utts) was BOTH relevant and NOT properly discussed within the article?Q23: What is the third of the three components that (according to Utts) was BOTH relevant and NOT properly discussed within the article?Q24: According to Utts, which of the components was considered a ‘major problem’?For the following 3 questions (Q25 to Q27) identify which one of the seven pitfalls when asking a question applies to each of the following potential survey questions.Use the following system:Deliberate biasUnintentional biasDesire to pleaseAsking the uninformedUnnecessarycomplexityOrdering of questionsConfidentiality and anonymityQ25: Do you agree that this huge win tonight has to be the biggest win of your 25-year collegiate coaching career?Q26: Do you use drugs?Q27: Don’t you think that Ohio University students shouldn’t receive consequences from theuniversity for illegal behavior that doesn’t occur on campus?Q28: “Please list the most important factors associated with academic success here at Ohio University”. This is an example ofA. a closed-ended question/statementB. an open-ended question/statementC. a common pitfall when asking survey questions/statements D. deliberate biasQ29: A survey was conducted with 900 Ohio University students. One of the conclusions from this survey was that 55% of the students believed the academics at Ohio University were ‘very strong’. Based on these sample results, are you convinced that a majority (i.e. over 50%) of all students believe the academics are ‘very strong’?A. Yes B. No 5Q30: ___________ refers to unpredictable errors or discrepancies that are not easily explained. A. ReliabilityB. Variability C. Validity D. BiasQ31: A professor’s weight scale is always 10 pounds too light. Which of the following best describes the scale’s measurements of weight?A. unreliable B. validity C. variability D. biasedFor the following 4 situations (Q32 to Q35) identify which sampling method should be utilized by the researcher.Use the following system:simple random samplingsystematic random samplingcluster samplingstratified samplingrandom digit dialingmultistage samplingQ32: Ohio University wants to investigate satisfaction for freshmen students at the end of their first year of classes. Therefore, the university uses a computer and selects every 10th student from an alphabetical list of approximately 4000 names.Q33: In a survey of Athens county voters, a researcher divides her sampling frame into age brackets (e.g., 18-35, 36-50, 51-75, etc.) and randomly samples 100 individuals from each age bracket.Q34: United Airlines wants to investigate customer satisfaction from their passengers. Therefore, the researchers for United divided the country into 4 regions; the West, the Midwest, the South, and the East. Random samples of 3 specific flights were chosen in each region and every passenger on those flights was asked to complete a satisfaction questionnaire.Q35: A researcher was interested in researching the volunteer hours of sorority sisters at Ohio University. She obtains a list of all 14 sororities. From the list she selects 5 sororities and samples everybody in each of those 5 sororities. 6The following 5 questions (Q36 to Q40) are either “True” or “False”Q36: UTTS considers ‘Getting a volunteer sample’ a “difficulty in sampling”.Q37: ‘Experiments’ measure the effect of manipulating the environment in some way—thenmeasure the result on the feature being manipulated on an outcome.Q38: A ‘meta-analysis’ is an in-depth examination of one or a small number of individuals.Q39: ‘Case studies’ are used to make inferences about larger populations.Q40: A ‘census’ is a survey in which the entire population is measured.The following 6 summation questions (Q41 to Q46) are based on the table below: Q41: ΣXΣYQ42: Σ(X – 2Y)Q43: ΣY2+10Q44: (ΣX)2 + ΣYQ45: ΣXYQ46: (ΣX) – (ΣY)XY 7 -4 30 -2 6 -1 3 447The following 6 questions (Q47 to Q52) are based on the histogram below:5 4 3 2 1 0 Q47: Q48: Q49: Q50:Q51:Q52:12345 Quiz ScoreWhat is the sample size?What score is associated with the 70th percentile?What percentile with a score of 1.5.What percentage of the people scored between 2.5 and 4.5?The histogram isA. negatively skewedB. positively skewed C. normally distributed D. none of the aboveThe histogram isA. unimodelB. bimodalC. modalityD. a good example of outliers 8FrequencyThe following 7 questions/computations (Q53 to Q59) are based on a sample summarized in the stemplot below:Stem | Leaf1 |3 6 92 |0 2 2 2 8 83|0Compute:Q53: meanQ54: medianQ55: modeQ56: rangeQ57: interquartile rangeQ58: varianceQ59: standard deviationThe following 1 question (Q60) is either “True” or “False”Q60: A grouped frequency distribution is generally a poor choice for displaying data.The following 11 questions (Q61 to Q71) are based on the following summarized research:(you will need your z-tables from Howell to complete many of these questions)A psychologist studied self-esteem scores and found the data set to be normally distributed with a mean of 60 and a standard deviation of 5.Part A**What raw score cuts off the bottom 33% of this distribution? Steps:Q61: What is the z-score that cuts off the bottom 33% of this distribution?Q62: What is the raw score that cuts off the bottom 33% of this distribution? 9Part B**What percentage of the scores is between 65 and 70? Steps:Q63: What is the z-score that corresponds to the raw score of 65?Q64: What is the z-score that corresponds to the raw score of 70?Q65: What percentage of the scores is between 65 and 70?Part C:**A raw score of 57.5 is associated with what percentile? Steps:Q66: What is the z-score associated with a raw score of 57.5?Q67: A raw score of 57.5 is associated with what percentile?Part D:**What raw scores mark the middle 95% of this distribution?Steps:Q68: What are the z-scores that mark the middle 95% of this distribution?Q69: What is the raw score below the mean?Q70: What is the raw score above the mean?Part E:**What is the median of this distribution?Q71: What is the median of this distribution?Q72: In a positively skewed distribution, Alice scored the mean, Betty scored the median, andClaire scored the mode. Who had the lowest score?A. AliceB. BettyC. ClaireD. All three scored approximately the sameQ73: In a normal distribution, Alice scored the mean, Betty scored the median, and Claire scored the mode. Who had the lowest score?A. AliceB. BettyC. ClaireD. All three scored approximately the same 10Q74: The z-distribution always has a mean of _____ and a standard deviation of _____. A. 1; 0B. 0; 0 C. 0; 1 D. 1;1Q75: A test score of 84 was transformed into a standard score of –1.5. If the standard deviationof test scores was 4, what is the mean of the test scores?A. 78 B. 89 C. 90 D. 88Q76: The standard deviation for the sample numbers 8, 9, and 10 is A. –3.0B. 0.0 C. .67 D. 1.0Q77: A university administrator randomly selected 10 freshmen and 10 seniors and asked themhow satisfied they are with life at Ohio University on a 1 (not at all satisfied) to 9 (very satisfied) scale. The administrator’s date is below:Mean Variance Freshmen 3 10Seniors 8 1 These results seem to indicate that:freshmen agree more with each other about their life satisfaction than do seniorsseniors agree more with each other about their life satisfaction than do freshmenall freshman tend to be satisfied with lifefreshmen and seniors experience equal life satisfactionnone of the above are accurateQ78: A sample of data has a standard deviation of 10. If you were to divide all the scores in the date set by a factor of two (2), what would the new standard deviation be?A. 10B. 5C. 2.5D. none of the aboveThe following 2 questions (Q79 to Q80) are either “True” or “False”Q79: The variance for a set of data can be a negative value.Q80: The two parameters that completely characterize a standardized normal distribution are “μ” and “σ”. 11The following 12 questions (Q81 to Q92) are based on the summarized table below:Hours Studied X2 Score on Quiz Y2 XY 113932 4 5 25 10 3 9 7 49 21 5 25 9 81 45ΣX = 11ΣX2 = 39Q81: What is the predictor variable?ΣY = 24ΣY2 =164ΣXY =79Q82: What is the criterion variable?Part A** Compute the Pearson correlation.Steps:Q83: What is the covariance?Q84: What is the standard deviation of the predictor variable?Q85: What is the standard deviation of the criterion variable?Q86: What is the Pearson’s r value?Q87: What is the best interpretation of your Pearson correlation in Q6?A. As ‘hours studied’ goes up there is a corresponding increase in ‘score on quiz’ B. As ‘hours studied’ goes up there is a corresponding decrease in ‘score onquiz’Q88: The strength of the above relationship is considered A. weakB. moderate C. strongPart B**Compute the regression equation. Steps:Q89: What is the numeric value for the slope?Q90: What is the y-intercept?12Q91: What is the regression equation?Q92: Predict the total number of points on the quiz for a person studying 4 hours.Q93: A variable that is being predicted by another variable is called a(n)predictor variablecriterion variableindependent variabletwo of the above are correctQ94: Which of the following correlations is stronger?+ 2.56–0.87+0.53Q95: Computing correlations is appropriate when we havemeasurement datacategorical dataratio datatwo of the above are correctQ96: Two variables, X and Y, have a significant linear correlation. Under what conditions canthe direction of causality be determined just from knowing the correlation coefficient?when the correlation is negativewhen the correlation is positiveboth a) and b) are correctneither a) nor b) are correctQ97: If you conducted a study where you could account for 49% of the variability for one variable with another variable, which of the following correlation coefficients did you find?A. .49B. .2401C. .7D. none of the above are correct13The following 3 questions (Q98 to Q100) are based upon the scatterplots below: ABCQ98: If you were to compute a correlation between the X and Y variables for each of the three sets of data, which set of data would yield a correlation closest to zero?Q99: If you were to construct a regression equation using the X variable to predict the Y variable for each of the three sets of data, for which set of data would the regression equation have the largest, positive slope?Q100: If you were to construct a regression equation using the X variable to predict the Y variable for each of the three sets of data, for which set of data would the regression equation have the most negative slope?Bonus Section – 2 points (5 Questions)**There can be more than one correct answer to the following questions. I amlooking for your reasons as to why you think your answer is correct**1) What is the most interesting thing that you have learned so far in this course and why doyou think it is the most interesting?2) What is the least interesting thing that you have learned so far in this course and why do you think it is the least interesting?3) What is the most difficult thing that you have learned so far in this course and why do you think it is the most difficult?4) What is the least difficult (easiest) thing that you have learned so far in this course and why do you think it is the least difficult?5) What is the biggest challenge for you taking this online course? 14