Question 3: [16 points]  Report four digits after the decimal for critical ratio calculations. Lucky’s Bakery sells Bunny Cakes for Easter. For each of the settings below, specify: (i) the unit cost of having too much inventory, (ii) the unit cost of not having enough inventory, and (iii) the critical ratio. A. [6 points] The manager estimates it costs $10 to prepare a Bunny Cake. Fresh cakes sell for $16/cake. Day-old cakes sell for $9/cake. If there are no Bunny Cakes left, the customers leave the store to get a cake from a Publix store nearby. B. [6 points] The bakery manager estimates it costs $10 to prepare a Bunny Cake. Fresh cakes sell for $16/cake. Day-old cakes sell for $9/cake. If there are no cakes left, the customers buy the Easter Bunny’s Carrot Cake instead (for which you may assume that there is ample supply) that has a net profit margin of $3 per cake. C. [4 points] In which of the above settings, A. or B., do you expect the Lucky’s bakery to bake more Bunny Cakes. Please justify your answer briefly.

The incomes of 50 loan applicants are obtained. Which level of measurement is income?

A textile company has six dye making machines. From historical records, the company’s production manager estimates that the following are the probabilities of how many machines typically break down during any three months: # of Machine Breakdowns Probability 0 2% 1 12% 2 15% 3 28% 4 27% 5 13% 6 3% What is the expected number of machines breaking down over any three month period?

In a study of foreign bank holdings in the US banks, year-end shares of assets in the US bank subsidiaries held by foreigners (as a percentage of total assets) was related to: X1 = Annual change in billions of dollars, in foreign direct investment in the US (excluding finance, insurance, and real estate);X2 = Bank price – earnings ratio;X3 = Index of exchange value of the dollar. The regression results from the sample data gave the following population parameter estimates: constant = -3.248b1 = .101 b2 = -.244 b3 = .057 R2 = .93 What is the estimate year-end share of assets in the US bank held by foreigners for a particular year if the annual change in the foreign direct investment in the US (excluding finance, insurance, and real estate) was $50 billion, the bank price-earnings was 12, and the index of exchange value of the dollar was 175?

The lengths of time (in minutes) several underwriters took to review applications for similar insurance coverages are: 50, 230, 52, and 57. What is the median length of time required to review an application?

Assuming a normal distribution which of the following is not true.

A simple ANOVA test was conducted by a telecommunications firm on the mean sales results for four different calling plans. The ANOVA null hypothesis was rejected. What does this indicate?

A 95% confidence interval for dollars spent on back-to-school supplies for one elementary student is $18 to $32.  This can be interpreted to mean:

Why is depreciation expense added back to net income in the operating section of the indirect cash flow statement? (2 points)

What is the interest expense of the second installment? (3 points. Please write positive value as $xx,xxx and negative value as -$xx,xxx)