A local restaurant owner decides to poll individuals randomly regarding how much they would be willing to spend on a romantic dinner for two. The owner takes a preliminary sample of 32 people and finds that the average amount those surveyed were willing to pay is $35 with a standard deviation of $10. The owner is not satisfied, however, because the owner wants to be 95% sure that the mean of the new sample falls within $2 of the true mean. What is the minimum number of people the owner should interview? Note that z=1.96 for a 95% confidence interval.

• A.97
• B.10
• C.25
• D.385

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A company reported pretax financial statement income of $420,000 for Year 1. Taxable income for Year 1 was $300,000 due to a temporary timing difference in depreciation expenses. The income tax rate is 30 percent. In its Year 1 balance sheet, the company should record a deferred tax:

• A.liability of $120,000
• B.asset of $120,000
• C.asset of $36,000
• D.liability of $36,000

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Exhibit:

A recent graduate is interested in investing in a stock. This individual is particularly interested in retail companies and has been following two companies closely for the past year. In order to decide which stock to invest in, this individual decides to compare monthly returns for both companies over the past year. A table of descriptive statistics is given below. What can be said about Company A regarding risk and average returns in relation to Company B?

• A.Company A has lower average monthly returns and is relatively more risky than Company B.
• B.Company A has lower average monthly returns and is relatively less risky than Company B.
• C.Company A has higher average monthly returns and is relatively less risky than Company
• D.Company A has higher average monthly returns and is relatively more risky than Company B.

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Analysts at a technology company predict that the company will be able to increase the price for its new product after it has been on the market for one year. Which of the following conditions would BEST explain this prediction?

• A.As more products are sold, customers' willingness to pay rises.
• B.The company faces two well-defined customer segments with different levels of willingness to pay.
• C.Input prices for the product are expected to rise in the future.
• D.The firms competing in this industry experience economies of scale.

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An on-demand taxi service guarantees that it can provide a taxi in five minutes or less. If the service has a fixed number of taxis, how can it most cheaply guarantee "five minutes or less" during busy periods?

• A.It keeps demand low by encouraging drivers to be less polite during busy periods.
• B.It maintains a fleet of taxis large enough to meet demand in busy periods.
• C.It is impossible to keep the guarantee during busy periods.
• D.It raises prices during the busy periods.

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