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Chapter: 3 -Problem: 9 >> When residual or error terms are related over time, serial correlation is said to exist. Is serial correlation apt to be a problem in a time-series analysis of quarterly sales data for restaurant chain Wendy’s over a 10 year period? Identify a possible remedy, if necessary.
Answer Preview: Yes. Serial correlation is liable to be a problem in the statistical analysis of quarterly sales dat…

, Chapter: 3 -Problem: 17 >> Hypothesis Testing: t tests. Syndicated Publications, Inc., publishes a number of specialty magazines directed at Midwest dairy producers. As part of its sales trainee program, the company closely monitors the performance of new advertising space sales personnel. During a recent 2-week period, the number of customer contacts was monitored and recorded for two new sales representatives: Service Cal
Answer Preview: A. Given the very small sample sizes involved, a t test with df = n - 1 = 10 1 = 9 is used …

, Chapter: 3 -Problem: 18 >> Hypothesis Testing: t tests. Onyx Corporation designs and manufactures a broad range of fluid-handling and industrial products. Although fluid-handling products have been a rapidly growing market for Onyx during recent years, operating margins dipped recently as customers have complained about lower reliability for one of the company€™s principal products. Indeed, one of its leading customers prov
Answer Preview: A. Given the very small sample sizes involved, a t test with df = n - 1 = 121 = 11 is used to determ…

, Chapter: 3 -Problem: 23 >> Given the highly competitive nature of the restaurant industry, individual companies cautiously guard operating information for individual outlets. As a result, there is not any publicly available data that can be used to estimate important operating relationships. To see the process that might be undertaken to develop a better understanding of store location decisions, consider the hypothetical e
Answer Preview: A. Individual coefficients for the San Francisco Bread Co. regression equation can be interpreted as follows. The intercept term, 128,832 240, has no economic meaning in this instance; it lies far out…

, Chapter: 3 -Problem: 3 >> If the average and median rate of return on equity for publicly-traded firms in a given industry is 15 percent, what does this imply about sample distribution?
Answer Preview: If the mean and the median are the same, the sample …

, Chapter: 9 -Problem: 3 >> Do equal distances along a given production process ray in a linear programming problem always represent an identical level of output?
Answer Preview: Yes, equal distances along a given product…

, Chapter: 3 -Problem: 15 >> Data Description. Scanning America, Inc., is a small but rapidly growing firm in the digitized document translation business. The company reads architectural and engineering drawings into a scanning device that translates graphic information into a digitalized format that can be manipulated on a personal computer or workstation. During recent weeks, the company has added a total of 10 new clerical
Answer Preview: A. The mean, or sample average is 3 90 years of work experience. By inspection of a rank-o…

, Chapter: 12 -Problem: 6 >> Antitrust statutes in the United States have been used to attack monopolization by big business. Does labor monopolization by giant unions have the same potential for the misallocation of economic resources?
Answer Preview: Economically speaking, the monopolization of labor ca…

, Chapter: 3 -Problem: 20 >> Simple Regression.The Environmental Controls Corporation (ECC) is a multinational manufacturer of materials-handling, accessory, and control equipment. During the past year, ECC has had the following cost experience after introducing a new fluid control device: A. Calculate the mean, median, range, and standard deviation for output and each cost category variable.B. Describe each cost category as
Answer Preview: A. Variable descriptive statistics for the level of output an…

, Chapter: 3 -Problem: 16 >> Hypothesis Testing: z-tests. Beauty Lotion is a skin-moisturizing product that contains rich oils, blended especially for overly dry or neglected skin. The product is sold in 5-ounce bottles by a wide range of retail outlets. In an ongoing review of product quality and consistency, the manufacturer of Beauty Lotion found a sample average product volume of 5.2 ounces per unit with a sample standard
Answer Preview: A. Given the very large sample size, the relevant test statistic is the z statistic, where the …

, Chapter: 3 -Problem: 2 >> What important advantage does the standard deviation have over the range measure of dispersion in company sales for firms in the computer software industry?
Answer Preview: Range has intuitive appeal as a measure of dispersion because it clearly identifies the distance bet…

, Chapter: 3 -Problem: 21 >> One of the most difficult tasks facing stock market investors is the accurate projection of EPS growth. Historical EPS growth is only relevant for investors as an indicator of what might be reasonable to expect going forward. This is trickier than it sounds. For example, rapid historical EPS growth is typically associated with firms that offer distinctive products and display shrewd management of
Answer Preview: A. Based upon the simple regression model estimation results reported here, the closest relation between projected EPS growth and historical EPS growt…

, Chapter: 3 -Problem: 1 >> Is the mean or the median more likely to provide a better measure of typical sales revenue for companies included in the Fortune 500?
Answer Preview: When the number of sample observations above or below the mean is unusually large, the sample …

, Chapter: 3 -Problem: 19 >> Correlation. Managers focus on growth rates for corporate assets and profitability as indicators of the overall health of the corporation. Similarly, investors concentrate on rates of growth in corporate assets and profitability to gauge the future profit-making ability of the firm and the company€™s prospects for stock market appreciation. Five familiar measures focused upon by both managers and
Answer Preview: A. As is typical, this correlation table shows only correlation statistics for one-half of the potential pair-wise comparisons. The reason why is quit…

, Chapter: 3 -Problem: 12 >> The global computer software industry is dominated by Microsoft Corp. and a handful of large competitors from the United States. During the early 2000s, fallout from the government's antitrust case against Microsoft and changes tied to the Internet caused company and industry analysts to question the profitability and long-run advantages of the industry's massive long-term investments in research
Answer Preview: A. First of all, the constant in such a regression typically has no meaning. Clearly, the intercept should not be used to suggest the value of sales revenue that might occur for a firm that had zero R…

, Chapter: 16 -Problem: 7 >> When the basic valuation model is adjusted using the risk-free rate, i, what economic factor is being explicitly accounted for?
Answer Preview: When the basic valuation model i…

, Chapter: 9 -Problem: 2 >> Why can't linear programming be used in each of the following circumstancesA.  Strong economies of scale exist.B. As the firm expands output, the prices of variable factors of production increase.C.  As output increases, product prices decline.
Answer Preview: A. Strong economies of scale exis…

, Chapter: 3 -Problem: 14 >> Data Description.  Universal Package Service, Ltd., delivers small parcels to business addresses in the Greater Boston area. To learn more about the demand for its service, UPS has collected the following data on the number of deliveries per week for a sample of ten customers:                                                 3    3    4   2    4    2    3    3    23    3A. Calculate the mean, media
Answer Preview: A. The mean, or sample average is five deliveries per week. By insp…

, Chapter: 3 -Problem: 11 >> Carla Espinosa, staff research assistant with Market Research Associates, Ltd., has conducted a survey of households in the Coral Gables part of the Greater Miami area. The focus of Espinosa’s survey is to gain information on the buying habits of potential customers for a local new car dealership. Among the data collected by Espinosa is the following information on number of cars per household and
Answer Preview: A. The mean or average number of 1 533 cars per household, and mean household disposable income of $60,000 are calculated as follows: CARS: X = (1+3+0+2+0+2+2+0+2+2+3+2+1+1+2)/15 = 23/15 = 1 533 INCOM…

, Chapter: 9 -Problem: 6 >> Is the number of isocost, isorevenue, or isoprofit lines in a typical two input bounded feasible space limited?
Answer Preview: No, an infinite number of parallel iso cost, iso revenue…

, Chapter: 3 -Problem: 22 >> Beta is a common measure of stock-market risk or volatility. It is typically estimated as the slope coefficient for a simple regression model in which stock returns over time are the dependent Y variable, and market index returns over time are the independent X variable. A beta of 1 indicates that a given stock€™s price moves exactly in step with the overall market. For example, if the market went
Answer Preview: A. First of all, the constant in such a regression model typically has no meaning. Clearly, the intercept should not be used to estimate beta for a stock that has zero values for each independent vari…

, Chapter: 3 -Problem: 7 >> Describe the benefits and risks entailed with an experimental approach to regression analysis.
Answer Preview: The benefit of experimentation lies in its potential for improving regression model fit, an…

, Chapter: 3 -Problem: 8 >> Describe a circumstance in which a situation of very high correlation between two independent variables, called multicollinearity, is likely to be a problem, and discuss a possible remedy.
Answer Preview: Multicollinearity describes a situation of very high correlation between any two independent …

, Chapter: 16 -Problem: 10 >> What is the value of decision trees in managerial decision making?
Answer Preview: Decision trees are like road m…

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