This document discusses various topics related to financial statements, earnings quality, insurance planning, and project management scheduling. It includes sample financial statements, questions about return on equity calculations, discussion topics on moral hazard and income replacement in insurance, and examples of activity-on-node diagrams and project crashing costs. The document contains educational content on analyzing different aspects of companies, insurance, and scheduling complex projects.

1. 1. What are the four basic financial statements and what can
you learn about a company from each one? (Don't tell us what is
on each statement but rather what can you learn by analyzing
the statements)
2. Discuss the general factors that influence the quality of a
company's reported earnings and its balance sheet.
Problem 2
Balance Sheet(walmart)
Total assets $10,000,000
Accounts payable $ 2,000,000
Notes payable (8%) 1,000,000
Bonds (10%) 3,000,000
Common stock at par 1,000,000 Contributed capital in excess of
par 500,000
Retained earnings 2,500,000
Total liabilities and stockholders' equity $10,000,000

2. Question-
Compute the return on stockholders' equity if (walmart) has
sales of $20 million and the following net profit margin: and
show ALL work
a. 3 percent
b. 5 percent
Insurance planning
1-Discuss the problem of moral hazard. How does the insurance
company manage this?
Give examples
2-Discuss the concept of income replacement in determining an
insurance need
give examples
Question 1
A life insurance policy is a contract governed by federal law.
True

3. False
2.5 points
Question 2
The principal economic purpose of life insurance is to
accumulate capital.
True or False
Question 3
Life issurance is essentially an investment vehicle that ensures a
desired wealth accumulation by the time of death, regardless
when death occurs.
True
False
2.5 points
Question 4
The income replacement approach assumes the insurance should
be equal to the value of the person's future earnings potential to
the surviving family members.

4. True
False
2.5 points
Question 5
Insurance companies base their mortality assumptions on
the experience of large groups of people
published mortality results of other large life insurance
companies
federally mandated mortality tables published by the Treasury
Department
the individual assumptions made by actuaries employed by the
company
2.5 points
Question 6
The "multiples-of-salary" method of estimating the amount of a
family's insurance needs is
a rule of thumb method that determines insurance needs by
looking at the number of children in the family
a method that was repealed by the Taxpayer Relief Act of 1997
a method combining a simple rule of thumb method with

5. elements of income replacement and needs analysis
a method that can be used only by individuals who are properly
licensed with the FAA
2.5 points
Question 7
The income replacement approach to determining a family's
insurance needs is based primarily on?
the earnings growth rate of long-term U.S. Treasury securities
regulations issued by the Department of Health and Human
Services
the current balance in the accumulated adjustment account
the human life value concept
2.5 points
Question 8
All of the following are primary life insurance planning areas,
except
income replacement and family needs
portfolio value and allocation of assets between debt and equity
instruments

6. business insurance needs analysis
estate preservation and liquidity needs
786 ChapterSeventeen ProjectManagemeni
12. A project manager has compiled a list of major activities
that will be required to install a computer
iniormation system in her firm. The list includes estimated
completion times for activities and pre-
cedence relationships.
lmmediate
Activity Predecessor Estimated Times (weeks)
A
D
E
H
F
G

7. B
I
J
K
c
M
N
0
End
A
D
E
A
F
2-4-6
6-8-10
7 -9-12
2-3-5
3-4-8

8. 5-7-9
2-2-3
2-3-6
3-4-5
4-5-8
5-8- 1 2
1-1-1
6-7-1 1
8-9-1 3
B
I
J
C
M
N
H,G,K,O
a. Construct an activity-on-node diagram for this prqect'
b. If the project is finished within 26 weeks of its start, the
project manager will receive a bonus of

9. $1,000; and if the project is finished within 27 weeks of its
start, the bonus will be $500' Find
the probability of each bonus.
13. Here is a list of activity times for a project as well as
crashing costs for its activities. Determine
which activities should be crashed and the total cost of crashing
if the goal is to shorten the project
by three weeks as cheaply as possible.
Activity Duration (weeks) First Grash Second Crash
1-2 5
2-4 6
4-7 3
1-3 3
3-4 7
1-5 5
5-6 5
6-7 5
$8 $10
7s
14 15
I 11
89
10 15
11 13
12 14
14. The project manager of a task force planning the
construction of a domed stadium had hoped to be

10. able io complete construction prior to the start ofthe next
college football season. After reviewing
construction time estimates, it now appears that a certain
amount of crashing will be needed to
ensure project completion before the season opener. Given the
following time and cost estimates,
determine a minimum-cost crashing schedule that will shave
five weeks off the project length.
Nole.' No activity can be crashed more than two weeks.
7-10-12
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Solution
DISCUSSION
AND REVIEW
QUESTIONS
GhapterSixteen Scheduling
We assume that the processing sequence remains unchanged and
proceed on that basis. The solution
from the previous problem is shown in the following chart. The
next chart shows reduced idle time at
center B when splitting is used.
0 2.20 4.70 10.50 1 5.00 18.80
5.20 9.40 10.50 14.50 17.00 18.80 20.30

15. o 1.10 2.20 4.70 7.60 10.50 12.75 15.00 18.80
0 1.10 4.10 8.90 12.90 14.00 16.00 18.05 19.55
An inspection ofthese two figures reveals that throughput time
has decreased from 20.30 hours
to 19.55 hours. In addition, the original idle time was 5.6 hours.
After splitting certain jobs, it was
reduced to 4.85 hours, so some improvement was achieved.
Note that processing times at B are gen-
erally less than at A for jobs toward the end of the sequence. As
a result, jobs such as e and b at B
were scheduled so that they were centered around the finishing
times of e and b, respectively, at A,
to avoid having to break the jobs due to waiting for the
remainder of the split job from A. Thus, the
greatest advantage from job splitting generally comes from
splitting earlier jobs when Johnson's rule
is used for sequencing.

16. 1. Why is scheduling fairly simple for repetitive systems but
fairly complex for job shops?
2. What are the main decision areas ofjob-shop scheduling?
3. What are Gantt charts? How are they used in scheduling?
What are the advantages of using Gantt
pharts?
4. What are the basic assumptions of the assignment method of
linear programming?
5. Briefly describe each ofthese priority rules:
a. FCFS b. SPT c. EDD d. SiO e. Rush
6. Why are priority rules needed?
7. What problems not generally found in manufacturing systems
do service systems present in terms
of scheduling the use of resources?
8. Explain forward and backward schedulings and each one's
advantage.

17. 9. How are scheduling and productivity related?
10. What factors would you take into account in deciding
whether to split a job?
11. Explain the term makespan.
t . One approach that can be effective in reducing the impact of
production bottlenecks in a job shop
or batch operations setting is to use smaller lot sizes.
a. What is the impact of a production bottleneck?
b. Explain how small lot sizes can reduce the impact
ofbottleneck operations.
TAKING STOCK &v,^" general trade-offs are involved in
sequencing decisions? In scheduling decisions?
@ *o needs to be involved in setting schedules?
{"i}Ho* has technology had an impact on scheduling?
CRITICAL
THINKING
EXERCISES