USA: +1(669)289-8683 
Sign in
9. (TCO 2) The Federal Election Commission maintains data showing the voting age population, the number of registered voters, and the turnout for federal elections. The following table shows the national voter turnout as a percentage of the voting age population from
1972
to
1996
(The Wall Street Journal Almanac; 1998):
Voter Turnout
Year
% Turnout
Year % Turnout 1972
55
1986
36
1974
38
1988
50
1976
54
1990
37
1978
37
1992
55
1980
53
1994
39
1982
40
1996 49
1984
53
Part (a) Use exponential smoothing to forecast this time series. Consider smoothing constants of a = 0.1 and 0.2. What is the forecast of the percentage of turnout in 1998?
Part (b) Use the mean absolute deviation (MAD) to determine which smoothing constant provides the best forecast of voter turnout. (Points : 30)
11. (TCO 6) Davis Company is considering two capital investment proposals. Estimates regarding each project are provided below:
Project A Project B
Initial Investment
$800,000 $650,000
Annual Net Income $50,000 $45,000
Annual Cash Inflow $220,000 $200,000
Salvage Value $0 $0
Estimated Useful Life 5 years 4 years
The company requires a 10% rate of return on all new investments.
Part (a) Calculate the payback period for each project.
Part (b) Calculate the net present value for each project.
Part (c) Which project should Jackson Company accept and why? (Points : 30)
12. (TCO 6) Top Growth Farms, a farming cooperative, is considering purchasing a tractor for $468,000. The machine has a 10-year life and an estimated salvage value of $32,000. Top Growth uses straight-line depreciation. Top Growth estimates that the annual cash flow will be $78,000. The required rate of return is 9%.
Part (a) Calculate the payback period.
Part (b) Calculate the net present value.
Part (c) Calculate the accounting rate of return. (Points : 30)
