Project a proforma balance sheet and state of cash inflows and outflows for FY 1997 and FY 1998 for the new shop with the following information from the case.

Don Foster's Dive maintains twenty employees to staff the dive shops and dive boats, provide various levels of instruction, and guide divers while underwater. It maintains six dive boats in various locations around the island in addition to the wide variety of watersports equipment. Don Foster's Dive provides two dives in the morning, starting about 9:00 a.m., one dive in the afternoon, and a final dive at night. Customers are either transported by Don Foster's Dive vans to the dive boat or picked up at the beach in front of their hotel. Divers can explore wrecks, walls (huge underwater cliffs), and reefs. Dive instruction, equipment, and information about the 200 different dive locations in the Caymans are provided by their experienced, professional instructors on the way to the dive site.

Increased competition in the dive industry in the Cayman Islands has caused revenues to stagnate and even decline in recent years (see Exhibit 1). With a huge investment in boats and diving equipment, (see fixed assets in Exhibit 2) Don Foster's Dive must find a way to utilize excess capacity. Since about 40 percent of its $2.4 million dollars of revenue arise out of a single dive and watersports rental shop located on the beach just outside a resort hotel, Andy thought about expanding to a second dive shop, located near the other end of the famous 7 Mile Beach. After considering several locations, he settled on the Holiday Inn because of its superior beach location and the fact that it attracts a younger more family oriented clientele, who are more likely to participate in watersports activities. He approached the Holiday Inn owners with a proposal to have Don Foster's Dive open a full service dive and watersports facility at the resort. The owners were interested in offering their guests a wide variety of watersports activities and dive services. They agreed to provide a small building on their premises and the exclusive license to provide diving and other watersports services at their hotel in return for the minority interest in a 60/40 split of any profits generated by the proposed dive shop. Don Foster's Dive would renovate the shop and provide vessels and staff for the new venture. Although the proposal sounded exciting for Don Foster's Dive, Andy wasn't sure of the viability of the venture given the additional investment it would require and its unknown impact on assets, debt, cash flow and income. Andy knew the first step was to determine the impact of the expansion on profits and to obtain proforma (projected) financial statements that he could carry to the bank to justify the necessary financing. Don Foster's Dive just completed its 1996 fiscal year on May 31, and could have the new facility open on a limited basis in a matter of days after signing the contract.

Although there is some uncertainty in the incremental business the new dive shop would generate, Andy has obtained data that can help with the projections. He contacted the local Department of Tourism and obtained statistical data for a dive shop on the beach outside the Radisson Resort, which is similar to the proposed site. Using those statistics, he estimated monthly sales and profit from operations (provided in Exhibit 3 along with a trend line) for the dive and watersports facility during the last three years. Given Andy's experience with the business, he feels confident that the trend established from the data at the Radisson dive shop would be representative of business at the new Holiday Inn location. Adjustments for the difference in size of the hotels (Radisson Resort has 330 rooms and the Holiday Inn has 230 rooms) would, of course, have to be made in order to get accurate annualized projections of sales revenue and profit from operations. In addition, Andy knows that it takes approximately one year for a new shop to reach its full sales potential. From recent experience in opening new dive shops for Don Foster's Dive and in talking to competitors along 7 Mile Beach, Andy believes that revenue and profit from operations at the proposed site for the first year will be 50 percent of subsequent figures and operating expenses (mostly variable) will be ten times as large as administrative expenses on the new facility for the foreseeable future. All other previously existing facilities at Don Foster's Dive are expected to yield about the same revenue, expenses and income as in 1996.

The additional investment required by Don Foster's Dive to open the new shop includes $31,000 for building improvements and signs; $ 17,500 for waverunners, aqua trikes, sailboats, kayaks, and floating chair mats; $10,000 for additional scuba equipment; $20,000 for increased retail inventory and $5,000 for additional computer equipment. All of the investments are anticipated to be financed by a long-term bank loan which together with existing long-term bank loans will be repaid in equal installments of $4,008 per month (exclusive of interest). The existing note payable is also reduced by monthly payments of $9,070 (exclusive of interest). The interest cost on both debt instruments is part of the administrative expense component on the income statement. If the purchases are made, the total depreciation expense (included with operating expenses) using a straight line method is expected to increase by $15,000 to about $65,000 per year on all fixed assets (all figures are stated in CI dollars).Project a proforma balance sheet and state of cash inflows and outflows for FY 1997 and FY 1998 for the new shop with the following information from the case.

Don Foster's Dive maintains twenty employees to staff the dive shops and dive boats, provide various levels of instruction, and guide divers while underwater. It maintains six dive boats in various locations around the island in addition to the wide variety of watersports equipment. Don Foster's Dive provides two dives in the morning, starting about 9:00 a.m., one dive in the afternoon, and a final dive at night. Customers are either transported by Don Foster's Dive vans to the dive boat or picked up at the beach in front of their hotel. Divers can explore wrecks, walls (huge underwater cliffs), and reefs. Dive instruction, equipment, and information about the 200 different dive locations in the Caymans are provided by their experienced, professional instructors on the way to the dive site.

Increased competition in the dive industry in the Cayman Islands has caused revenues to stagnate and even decline in recent years (see Exhibit 1). With a huge investment in boats and diving equipment, (see fixed assets in Exhibit 2) Don Foster's Dive must find a way to utilize excess capacity. Since about 40 percent of its $2.4 million dollars of revenue arise out of a single dive and watersports rental shop located on the beach just outside a resort hotel, Andy thought about expanding to a second dive shop, located near the other end of the famous 7 Mile Beach. After considering several locations, he settled on the Holiday Inn because of its superior beach location and the fact that it attracts a younger more family oriented clientele, who are more likely to participate in watersports activities. He approached the Holiday Inn owners with a proposal to have Don Foster's Dive open a full service dive and watersports facility at the resort. The owners were interested in offering their guests a wide variety of watersports activities and dive services. They agreed to provide a small building on their premises and the exclusive license to provide diving and other watersports services at their hotel in return for the minority interest in a 60/40 split of any profits generated by the proposed dive shop. Don Foster's Dive would renovate the shop and provide vessels and staff for the new venture. Although the proposal sounded exciting for Don Foster's Dive, Andy wasn't sure of the viability of the venture given the additional investment it would require and its unknown impact on assets, debt, cash flow and income. Andy knew the first step was to determine the impact of the expansion on profits and to obtain proforma (projected) financial statements that he could carry to the bank to justify the necessary financing. Don Foster's Dive just completed its 1996 fiscal year on May 31, and could have the new facility open on a limited basis in a matter of days after signing the contract.

Although there is some uncertainty in the incremental business the new dive shop would generate, Andy has obtained data that can help with the projections. He contacted the local Department of Tourism and obtained statistical data for a dive shop on the beach outside the Radisson Resort, which is similar to the proposed site. Using those statistics, he estimated monthly sales and profit from operations (provided in Exhibit 3 along with a trend line) for the dive and watersports facility during the last three years. Given Andy's experience with the business, he feels confident that the trend established from the data at the Radisson dive shop would be representative of business at the new Holiday Inn location. Adjustments for the difference in size of the hotels (Radisson Resort has 330 rooms and the Holiday Inn has 230 rooms) would, of course, have to be made in order to get accurate annualized projections of sales revenue and profit from operations. In addition, Andy knows that it takes approximately one year for a new shop to reach its full sales potential. From recent experience in opening new dive shops for Don Foster's Dive and in talking to competitors along 7 Mile Beach, Andy believes that revenue and profit from operations at the proposed site for the first year will be 50 percent of subsequent figures and operating expenses (mostly variable) will be ten times as large as administrative expenses on the new facility for the foreseeable future. All other previously existing facilities at Don Foster's Dive are expected to yield about the same revenue, expenses and income as in 1996.

The additional investment required by Don Foster's Dive to open the new shop includes $31,000 for building improvements and signs; $ 17,500 for waverunners, aqua trikes, sailboats, kayaks, and floating chair mats; $10,000 for additional scuba equipment; $20,000 for increased retail inventory and $5,000 for additional computer equipment. All of the investments are anticipated to be financed by a long-term bank loan which together with existing long-term bank loans will be repaid in equal installments of $4,008 per month (exclusive of interest). The existing note payable is also reduced by monthly payments of $9,070 (exclusive of interest). The interest cost on both debt instruments is part of the administrative expense component on the income statement. If the purchases are made, the total depreciation expense (included with operating expenses) using a straight line method is expected to increase by $15,000 to about $65,000 per year on all fixed assets (all figures are stated in CI dollars).

Consider the following contingency table: Disease No disease Risk factor 2 18 No risk factor 11 CO Calculate and enter the expected values if the variable risk factor and disease are independent. Disease No disease Risk factor Number Number No risk factor Number NumberGannon University Department of Mechanical Engineering GENG 623, Fall 2016 Extra Credit Problem (5%) Due Date: October 27, 2016 Consider a linear function of the four multivariate - Normal random variables: A -d,+ a,X, + a,X, + a,X, + a,X. A is linear function of Multivariate-Normal random variables and X, . ... . X, are Normal random variables with a mean of ( and standard deviation of 1. Show that sumproduct of linear coefficients represents covariance of Multivariate-Normal random variables. Covar( A, A ) = E((a,a,) + (a,a,) + (a,a,) + (a,a))QUESTION 17 For multivariate statistical techniques, when there is multivariate analysis of variance and covariance and canonical correlation, and multiple discriminant analysis can be used. more than one dependent variable one dependent variable variable interdependence interobject similarityState whether the function is a probability mass function or not. If not, explain why not. 1 f(x) = 35X, for x =5, 7, 9, 11 Select all that apply. A. The function f(x) is not a probability mass function because it does not satisfy the third condition of probability mass functions. B. The function f(x) is not a probability mass function because it does not satisfy the first condition of probability mass functions. [)C. The function f(x) is not a probability mass function because it does not satisfy the second condition of probability mass functions. [)D. The function f(x) is a probability mass function