Use the Spreadsheet titled “Pizza”. You own a pizza shop and are considering introducing the innovative “upside down pizza”. It is messy, but tasty. If you move forward with this new menu item, you will only offer “upside down pizzas” for 5 years, after which you would shut the project down. You paid a consultant $2,000 to run several focus groups to determine if this was an idea your customers would like, and she indicated that demand would be strong. The new machine would cost $280,000, and you would depreciate it over 8 years to an accounting salvage value of $30,000. After the project is over (end of year 5) you believe you can sell the machine for $105,000 (sale proceeds before tax). Your restaurant is open all 365 days of the year, and you think you will sell 50 “upside down pizzas” on average per day for a price of $12 each in Year 1. You will raise your per-unit price by $2 per year until the end of the project (e.g., year 1 = $12, year 2 = $14, year 3 = $16, year 4 = $18, year 5 = $20) You believe that these “upside down pizzas” will decrease the sales of your regular pizzas.  You believe this will reduce sales by 40 units per day.  These pizzas sell for an average price of $10 each and cost on average $7 each; you anticipate this will remain constant for the entire project). The costs to prepare an “upside down pizza” is $8 per pizza. You need pay a specialist to operate the machine which will increase your fixed costs by $8,600 per year. Your accounts receivable balance will be calculated as 15% of this year’s revenue dollars.  Your inventory balance will be calculated as 10% of next year’s variable cost dollars. Your accounts payable balance will be calculated as 5% of this year’s variable cost dollars.  Given the increase in volume of sales, you need an extra refrigerator. You have a spare unit on hand and plan to use it. If you sold it today, the market price would be $3,500 (before tax). It has a current book value of $1,000. Your marginal tax rate is 21%. This project’s cost of capital (discount rate) is 13%. What is your NPV of this project? What is the NPV for this project?  (Format as $XXX,XXX with no leading 0’s.; examples:  $2,888,943, $28,282 or $2,828 or $-34,859).

In the Excel template, use the “Valuation” tab.  Use the Spreadsheet titled “Pizza”. You own a pizza shop and are considering introducing the innovative “upside down pizza”. It is messy, but tasty. If you move forward with this new menu item, you will only offer “upside down pizzas” for 5 years, after which you would shut the project down. You paid a consultant $2,000 to run several focus groups to determine if this was an idea your customers would like, and she said it demand would be strong. The new machine would cost $300,000, and you would depreciate it over 7 years to an accounting salvage value of $30,000. After the project is over (end of year 5) you believe you can sell the machine for $95,000 (sale proceeds before tax). Your restaurant is open all 365 days of the year, and you think you will sell 50 “upside down pizzas” on average per day for a price of $14 each in Year 1. You will raise your per-unit price by $1 per year until the end of the project (e.g., year 1 = $14, year 2 = $15, year 3 = $16, year 4 = $17, year 5 = $18) You believe that these “upside down pizzas” will decrease the sales of your regular pizzas.  You believe this will reduce sales by 40 units per day.  These pizzas sell for an average price of $10 each and cost on average $7 each; you anticipate this will remain constant for the entire project). The costs to prepare an “upside down pizza” is $8 per pizza. You need pay a specialist to operate the machine which will increase your fixed costs by $5,600 per year. Your accounts receivable balance will be calculated as 15% of this year’s revenue dollars.  Your inventory balance will be calculated as 10% of next year’s variable cost dollars. Your accounts payable balance will be calculated as 5% of this year’s variable cost dollars.  Given the increase in volume of sales, you need an extra refrigerator. You have a spare unit on hand and plan to use it. If you sold it today, the market price would be $6,500 (before tax). It has a current book value of $3,000. Your marginal tax rate is 21%. This project’s cost of capital (discount rate) is 11%. What is the NPV for this project?  (Format as $XXX,XXX with no leading 0’s.; examples: $2,852,999, $28,282 or $2,828 or $-38,749).  

Questions 16 and 17 refer to the same scenario: A study was conducted to determine whether students would benefit from a new method of exam review. The table below shows data of those who passed their next exam. Treat the students who used the Traditional Method as Group 1 and the New Method as Group 2. At α = 0.05, test whether a lower proportion of students using the Traditional Method passed compared with those students using the New Method. Traditional New x1 = 320 x2 = 80 n1 = 500 n2 = 100    

You are saving for retirement. To live comfortably, you decide that you will need $2.5 million dollars by the time you are 65. If today is your 30th birthday, and you decide, starting today, and on every birthday up to and including your 65th birthday, that you will deposit the same amount into your savings account. Assuming the interest rate is 5%, the amount that you must set aside each and every year on your birthday is closest to:

A hotel receptionist checks in an average of 42.85 guests per shift. A sample of 101 different shifts had an average of 45.42 guests with a standard deviation of 8.82.  At α = 0.025, determine whether the true rate is higher than originally thought. What is the conclusion of this test? Select your answer from the following choice. Choice A; Do not reject Ho and conclude that there’s no evidence that the true mean is not higher than thought. Choice B: Reject Ho and conclude that the true mean is higher than thought. Choice C: Do not reject Ho and conclude that the true mean has not changed.  Choice D: Reject Ho and conclude that the true mean is lower than thought.

A right-tailed hypothesis test of a single proportion resulted in a test statistic value of 1.835. Which value below is a reasonable p-value? [pvalue]

After finishing the exam, click “Submit” to end your Honorlock proctoring session. You have 10 minutes from the time of ending the exam to upload your work in the “Exam 2” assignment. If, for any reason, you take longer than 10 minutes to upload your work, you will receive a 0 on the exam. Type “OK” to certify that you understand, then submit. 

What distinguishes benchmarking from reengineering?

What is one of the seven wastes targeted by JIT?

What does continuous improvement primarily aim to achieve?