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Pelican Stores, Mutual Funds, WACC, VISA

I) PRLICAN STORES
Pelican Stores, a division of National Clothing, is a chain of women's apparel stores operating throughout the country. The chain recently ran a promotionin which discount coupons were sent to customers of other National Clothing stores. Data collected for a sample of 100 in-store credit card transactions at Pelican Stores during one day while the promotion was running is provided below.
The proprietary card method of payment refers to charges made using a National Clothing charge card. Customer's who made a purchase using a discount coupon are referred to as promotional customers and customers who made a purchaes but did not use a discount coupon are referred to as regular customers. Because the promtional coupone were not sent to regular Pelican Stores customers, management considers the sales made to people presenting the promotional coupons as sales it would not otherwise make. Of course, Pelican also hopes that the promotional customers will continue to shop at its own stores.
Use the data to learn about Pelican's customers, specifically to evaluate the promotion involving discount coupons. Answer the following questions. Show the crosstabulations and some of the associated charts.
1. What was the average sale by Regular and Promotional customers?
2. Was the average sales higher for women among Regular Customers? How about for Promotional?
3. Was the percentage of women higher among Regular or Promotional customers? Hint: use pivot tables and associated pivot charts
4. Does the relationship between Gender and Type of Customer vary by Marital Status?
5. What is the relationshop between age and net sales for regular and for promotional customers?
Hint: group the age variable to facilitate interpretation of the age variable.
(hint: use the correlation coefficient to inform your answer)

II) MUTUAL FUNDS
From Yahoo finance select two stocks or two mutual funds. Make sure the selections are from different industries (e.g. utilities and retail; or, technology and manufacturing)
Pick two years worth of monthly returns data.
For each price series, show a time series, a histogram, calculate average returns, standard deviation and coefficient of variation.
Question: Which one is riskier?
Place the time series graph, the histogram and the descriptive statistics on a word document: Report format.

III) WACC
Calculate the Weighted Average Cost of Capital (WACC)
(hint: use EXCEL function: sumproduct)
Example: The Firm's Cost of Capital

Security Market Value Rate of Return
Common Stock 100,000 18.50%
Preferred Stock 15,000 14.90%
Bonds (9% coupon) 225,000 11.20%
Bonds (8.5% coupon) 115,000 11.20%

IV) VISA
According to the 2003 Annual Consumer Spending Survey, the average monthly Bank of America Visa credit card charge was $1838. A sample of monthly credit card charges provides the following data.

1. compute the mean and median
2. compute the first and third quartiles
3. Compute the range and interquartile range.
4. Compute the variance and standard deviation
5. The skewness measure for these data is 2.12. Comment on the shape of this distribution. Is it the shape you would expect? Why or why not?

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The solution provides answers to 4 questions: Pelican Stores, Mutual Funds, WACC, VISA.

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