Rates of Returns of Stocks Stocks may be categorized by sectors. Go to the book’s website to obtain the data file 11_4_21 using the file format of your choice for the version of the text you are using. The data represent the one-year rate of return (in percent) for a sample of consumer cyclical stocks and industrial stocks for the period December 2013 through November 2014. Note: Consumer cyclical stocks include names such as Starbucks and Home Depot. Industrial stocks include names such as 3M and FedEx. In Section 11.3, we learned that industrial stocks appear to have a higher mean rate of return. Does this suggest that industrial stocks are riskier as measured by the standard deviation rate of return?

Purchase Discounts Lost

Estimate the money that could be saved by the accounts payable and cash disbursements departments if a basic batch processing system were implemented. Assume that the clerical workers cost the firm $12 per hour that 13,000 vouchers are prepared, and that 5,000 checks are written per year. Assume that total cash disbursements to vendors amount to $5 million per year. Due to sloppy bookkeeping, the current system takes advantage of only about 25 percent of the discounts offered by vendors for timely payments. The average discount is 2 percent if payment is made within 10 days. Payments are currently made on about the 15th day after the invoice is received. Make your own assumptions (and state them) regarding how long specific tasks will take. Also discuss any intangible benefits of the system. (Don’t worry about excessive paper documentation costs.)