solve the following question

1. Ten attributes were rank-ordered in terms of in- creasing importance and were identified as A, B, C, . . ., and J. Determine the weight of (a) attri- bute C and (b) attribute J. A team of three people submitted the following statements about the attributes to be used in a weighted attribute evaluation. Use the statements to determine the normalized weights if assigned scores are between 0 and 100. Attribute Comment 1. Flexibility (F) The most important factor 2. Safety (S) 70% as important as uptime 3. Uptime (U) One-half as important as flexibility 4. Rate of retum (R) Twice as important as safety Different types and capacities of crawler hoes are being considered for use in a major excavation on a pipe-laying project. Several supervisors who served on similar projects in the past have identi- fied some of the attributes and their view of rela- tive importance. For the information that follows, determine the weighted rank order, using a 0-to-10 scale and the normalized weights.CASE STUDY WHICH IS BETTER-DEBT OR EQUITY FINANCING? Background Information Pizza Hut Corporation has decided to enter the catering busi- Plan A is debt financing for 50% of the capital ($750,000) ness in three states within its Southeastern U.S. Division, with the 8% per year compound interest loan repaid over using the name Pizza Hut At-Your-Place. To deliver the meals 10 years with uniform year-end payments. (A simplifying as- and serving personnel, it is about to purchase 200 vans with sumption that $75,000 of the principal is repaid with each custom interiors for a total of $1.5 million. Each van is ex- annual payment can be made.) pected to be used for 10 years and have a $1000 salvage Plan B is 100% equity capital raised from the sale of $15 value. per share common stock. The financial manager informed the A feasibility study completed last year indicated that the engineer that stock is paying $0.50 per share in dividends and At-Your-Place business venture could realize an estimated that this dividend rate has been increasing at an average of annual net cash flow of $300,000 before taxes in the three 5% each year. This dividend pattern is expected to continue, states. After-tax considerations would have to take into ac- based on the current financial environment. count the effective tax rate of 35% paid by Pizza Hut An engineer with Pizza Hut's Distribution Division has Case Study Exercises worked with the corporate finance office to determine how to best develop the $1.5 million capital needed for the purchase 1. What values of MARR should the engineer use to deter- of vans. There are two viable financing plans. mine the better financing plan? 2. The engineer must make a recommendation on the fi- Taxes = (taxable income )(tax rate) nancing plan by the end of the day. He does not know Taxable income = net cash flow how to consider all the tax angles for the debt financing - loan interest in plan A. However, he does have a handbook that gives He decides to forget any other tax consequences and use these relations for equity and debt capital about taxes this information to prepare a recommendation. Is A or B and cash flows: the better plan? Equity capital. no income tax advantages 3. The division manager would like to know how much the WACC varies for different D-E mixes, especially After-tax net cash flow = (before-tax net cash flow)(1 - tax rate) about 15% to 20% on either side of the 50% debt finance ing option in plan A. Plot the WACC curve and compare Debi capital: income tax advantage comes from interest its shape with that of Figure 10-2. paid on loans After-tax net cash flow = before-tax net cash flow - loan principal - loan interest - taxesFind the probability distribution for the number of jazz CDs when 4 CDs are selected at random from a collection consisting of 5 jazz CDs, 2 classical CDs, and 3 rock CDs. Express your results by means of a formula. A tire manufacturer wants to determine the inner diameter of a certain grade of tire. Ideally, the diameter would be 570 mm. The data are as follows: 572, 572, 573, 568, 569, 575, 565, 570. (a) Find the sample mean and median. (b) Find the sample variance, standard deviation, and range. (c) Using the calculated statistics in parts (a) and (b), can you comment on the quality of the tires?Find the cumulative distribution function of the random variable X representing the number of defectives in Exercise 3.11. Then using F(x), find (a) P(X = 1); (b) P(0 2).In comparing two alternatives by the B/C method, if the overall B/C ratio for both alternatives is cal- culated to be exactly 1.0, which alternative should you select? In comparing alternatives X and Y by the B/C method, if B/Cy = 1.6 and B/Cy = 1.8, what is known about the B/C ratio on the increment of in- vestment between X and Y? Logan Well Services Group is considering two sites for storage and recovery of reclaimed water. The mountain site (MS) will use injection wells that cost $4.2 million to develop and $280.000 per year for M&O costs. This site will be able to accommodate 150 million gallons per year. The valley site (VS) will involve recharge basins that cost $11 million to con- struct and $400,000 to operate and maintain. At this site, 890 million gallons can be injected each year. If the value of the injected water is $3.00 per 1000 gal- Ions, which alternative, if either, should be selected according to the B/C ratio method? Use an interest rate of 8% per year and a 20-year study period. The estimates shown are for a bridge under consid cration for a river crossing in Wheeling, West Virginia. Use the B/C ratio method at an interest rate of 6% per year to determine which bridge, if either, should be built. East Location West Location Initial cost, $ 11 x 10 27 x 10 Annual M&O, $/year 100,000 90,000 Benefits, $/year 990.000 2,400,000 Disbenefits, $/year 120,000 100,000 Life, years DOA fast-food restaurant operates both a drive-through facility and a walk-in facility. On a randomly selected day, let X and Y, respectively, be the proportions of the time that the drive-through and walk-in facilities are in use, and suppose that the joint density function of these random variables is f(z,y) = (x+ 2y), OS=$1, 0Sys1, elsewhere. a) Find the marginal density of X. b) Find the marginal density of Y. c) Find the probability that the drive-through facility is busy less than one-half of the time.Magnetron tubes are produced on an automated assembly line. A sampling plan is used periodically to assess quality of the lengths of the tubes. This measurement is subject to uncertainty. It is thought that the probability that a random tube meets length specification is 0.99. A sampling plan is used in which the lengths of 5 random tubes are measured. (a) Show that the probability function of Y , the number out of 5 that meet length specification, is given by the following discrete probability function: 5! f(y) = y!(5 - y)! (0.99)"(0.01)5-". (b) Suppose random selections are made off the line and 3 are outside specifications. Use fly) above either to support or to refute the conjecture that the probability is 0.99 that a single tube meets specifications.The proportion of the budget for a certain type of industrial company that is allotted to environmental and pollution control is coming under scrutiny. A data collection project determines that the distribution of these proportions is given by f(y) = 5(1-V)'. OSys1. elsewhere. (a) Verify that the above is a valid density function. (b) What is the probability that a company chosen at random expends less than 10% of its budget on environmental and pollution controls? (c) What is the probability that a company selected at random spends more than 50% of its budget on environmental and pollution controls