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timurjin [86]
4 years ago
9

Pioneer Chicken advertises "lite" chicken with 30% fewer calories than standard chicken. When the process for "lite" chicken bre

ast production is in control, the average chicken breast contains 420 calories, and the standard deviation in caloric content of the chicken breast population is 25 calories.
Pioneer wants to design a mean chart to monitor the caloric content of chicken breasts, where 25 chicken breasts would be chosen at random to form each sample. What are the limits with three standard deviations (z=3) from the target?
Business
1 answer:
zubka84 [21]4 years ago
5 0

Answer:

LL = 420 -3\frac{25}{\sqrt{25}}= 405 represent the lower limit

UL = 420 +3\frac{25}{\sqrt{25}}= 435 represent the Upper limit

So then the limits for this case are (405, 435)

Explanation:

Let's define X as our random variable that represent the "number of calories for a chicken breast", and we have the following data:

\bar X = 420 , \sigma= 25

The select a sample of 25 chickens , n = 25. And we want to find the limits for a confidence interval within 3 deviations from the mean with z =3.

We assume that the distribution for X is normal. So then the distribution for the sample mean is also normal.

And for this case the confidence interval would be given by:

(\bar X -z\frac{\sigma}{\sqrt{n}} < \mu < \bar X -z\frac{\sigma}{\sqrt{n}})

So the limits are defined as:

LL = \bar X -z\frac{\sigma}{\sqrt{n}} represent the lower limit

UL = \bar X +z\frac{\sigma}{\sqrt{n}} represent the Upper limit

Since we have all the values given we cn replace like this:

LL = 420 -3\frac{25}{\sqrt{25}}= 405 represent the lower limit

UL = 420 +3\frac{25}{\sqrt{25}}= 435 represent the Upper limit

So then the limits for this case are (405, 435)

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Answer:

a.

Bond Price  = $563,333.90007 rounded off to $563,333.90

b.

Bond Price  = $502500

c.

Bond Price  = $437232.16025 rounded off to $437232.16

Explanation:

To calculate the quote/price of the bond today, which is the present value of the bond, we will use the formula for the price of the bond. As the bond is a semi annual bond, we will use the semi annual coupon payment, semi annual number of periods and semi annual YTM. The formula to calculate the price of the bonds today is attached.

a. Case A: Market interest rate (annual): 4 percent

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Bond Price = 15075 * [( 1 - (1+0.02)^-14) / 0.02]  + 502500 / (1+0.02)^14

Bond Price  = $563,333.90007 rounded off to $563,333.90

 

b. Case B: Market interest rate (annual): 6 percent

Coupon Payment (C) = 502500 * 0.06 * 6/12 = $15075

Total periods remaining (n) = 7 * 2 = 14

r or YTM = 6% * 6/12  =  0.03 or 3%    

 

Bond Price = 15075 * [( 1 - (1+0.03)^-14) / 0.03]  + 502500 / (1+0.03)^14

Bond Price  = $502500

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Coupon Payment (C) = 502500 * 0.06 * 6/12 = $15075

Total periods remaining (n) = 7 * 2 = 14

r or YTM = 8.5% * 6/12  =  0.0425 or 4.25%    

 

Bond Price = 15075 * [( 1 - (1+0.0425)^-14) / 0.0425] + 502500/(1+0.0425)^14

Bond Price  = $437232.16025 rounded off to $437232.16

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Answer:

Dr Bonds payable                       $50,700

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