ABC Corporation is trying to forecast the effect of an upcoming environmental regulationon the variable costs of one of their key products. The regulation is still being debated inthe legislature. There is a 50% chance that the regulation will not be released in time toaffect next year's variable costs. ABC management expects the regulation, when it isreleased, is equally likely to increase variable costs by either 5% or 10%. Currently, theproduct's variable costs are P140 per unit. Based on these expectations, what is theexpected variable cost for ABC's key product next year?

Given Information: Consider the possible outcomes in the given study: The probability that the…

Answered: ABC Corporation is trying to forecast…

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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The index of leading economic indicators, compiled and published by the U.S. National Bureau of Economic Research, is composed of 12 time series, such as the average work hours of production in manufacturing, manufacturers’ new orders, and money supply. This index and similar indexes are designed to move up or down before the economy begins to move the same way. Thus, an economist has statistical evidence to forecast future trends.You want to construct a leading indicator for Erie County in upstate New York. The index is to be based on 2000 data. Because of the time and work involved, you decide to use only four time series. As an experiment, you select these four series: unemployment in the county, a composite index of county stock prices, the County Price Index, and retail sales. Here are the figures for 2000 and 2018. The weights you assign are unemployment rate 20%, stock prices 40%, County Price Index 25%, and retail sales 15%. (Round your answers to 1 decimal place.) a. Using…
.A new, miracle diabetes drug that diminishes major symptoms of diabetes has been approved by the FDA. Health care professionals and researchers believe that the new drug will prolong lifespan of diabetes patients. If the population is in steady state and the incidence is constant, what will the effect of this new drug be on the prevalence of diabetes in the population? Explain.
Many investors and financial analysts believe the Dow Jones Industrial Average (DJIA) gives a good barometer of the overall stock market. On January 31, 2006, 9 of the 30 stocks making up the DJIA increased in price (The Wall Street Journal, February 1, 2006). On the basis of this fact, a financial analyst claims we can assume that 30% of the stocks traded on the New York Stock Exchange (NYSE) went up the same day.A sample of 80 stocks traded on the NYSE that day showed that 11 went up.You are conducting a study to see if the proportion of stocks that went up is is significantly less than 0.3. You use a significance level of α=0.02α=0.02.What is the test statistic for this sample? (Report answer accurate to three decimal places.)test statistic = What is the p-value for this sample? (Report answer accurate to four decimal places.)p-value = The p-value is... less than (or equal to) αα greater than αα This test statistic leads to a decision to... reject the null accept the null fail…
Total DVD and Blu-ray disc sales in 2009 were $8.72 billion. For the purposes of this problem, you will combine DVD and Blue-ray disk sales into one category of DVD sales. A study by In-Stat predicted that "physical disc sales will decline by $4.7 billion by 2014," and that "streaming, on the other hand, should grow from its current $2.2 billion to $6.3 billion over the same time period (2009–2014). d. Write an equation that represents the linear model for streaming videos. Let S = the total sales of streaming videos in billions of dollars, and t = the number of years after 2009. e. In what year do the models predict streaming video sales to exceed DVD sales?
Discuss two extensions to the original GARCH (p,q) model and explain additional characteristics of financial data they might be able to capture.
Suppose we obtain data on prices of big-screen televisions and estimate the following model: In(Price) = 4.06 + 0.06 * Size +0.23 * Wide + 0.34 * Plasma + 0.21 * LCD+0.09 * Memory where the dependent variable has been transformed, Size is the screen size measured in inches, Wide is a dummy variable equal to one if the television is a widescreen, Plasma is a dummy variable equal to one if the television is a Plasma screen, LCD is equal to one if the television is an LCD screen, and Memory is a dummy variable equal to one if the television has any memory card slots. What is the estimated price of a 42" Widescreen Plasma television with 2 memory card slots? Select one: O a. 7.24 O b. 7.33 1525.38 O d. 1394.09 • e 1881.83 Clear my choice
A mobile phone distributor company has recently entered the phone assembling business. They want to study the sales trends in a certain area. From their past record of the distribution business, they know the volume of their annual sales in the Saddar area of Karachi city depends on the total income of all the earners in the area. The sales figures for past 10 years are shown in the following table. If the total income of all earners in Saddar is PKR 20 billion, what would be the predicted value of the company sales? Company's Sales (Billion rupees) Total Income in Saddar Area (Billion rupees) 11 0.7 15 1.1 16 0.4 13 0.9 18 1.0 21 1.2 22 1.5
It is known that in any given year, • 90% of the people in a city move to the suburbs; • 80% of the people in the suburbs do not move to the city. Given an initial city population of 55,000 and an initial suburb population of 77,000, what are the long-term population levels of the city and the suburb?
Students also often confuse the idea of Lurking Variable and Confounding Variable, but these are different but possibly related. This discussion is designed for students to help each other build a complete understanding, and clearly separate these as two distinct concepts. Discuss the similarities and differences between these, as well as what they imply for the conclusions of a research study.
Many investors and financial analysts believe the Dow Jones Industrial Average (DJIA) gives a good barometer of the overall stock market. On January 31, 2006, 9 of the 30 stocks making up the DJIA increased in price (The Wall Street Journal, February 1, 2006). On the basis of this fact, a financial analyst claims we can assume that 30% of the stocks traded on the New York Stock Exchange (NYSE) went up the same day. A sample of 51 stocks traded on the NYSE that day showed that 22 went up. You are conducting a study to see if the proportion of stocks that went up is significantly more than 0.3. You use a significance level of a =0.05. = What is the test statistic for this sample? (Report answer accurate to three decimal places.) test statistic = What is the p-value for this sample? (Report answer accurate to four decimal places.) p-value = The p-value is... O less than (or equal to) a O greater than a This test statistic leads to a decision to... O reject the null O accept the null O…
1. Suppose that you estimate a model of house prices to determine the impact of having beach frontage on the value of a house.14 You do some research, and you decide to use the size of the lot instead of the size of the house for a number of theoretical and data availability rea- sons. Your results (standard errors in parentheses) are: PRICE; = 40 + 35.0 LOT¡ – 2.0 AGE; + 10.0 BED; – 4.0 FIRE; (1.0) (5.0) (10.0) (4.0) (10) N = 30 R2 =.63 where: PRICE¡ =the price of the th house (in thousands of dollars) =the size of the lot of the th house (in thousands of square feet) = the age of the th house in years =the number of bedrooms in the th house =a qualitative/dummy variable for a fireplace (1 = yes for the th house) LOT; AGE; BED; FIRE; a. You expect the variables LOT and BED to have positive coefficients. Create and test the appropriate hypotheses to evaluate these expectations at the 5-percent level. b. You expect AGE to have a negative coefficient. Create and test the appropriate…
Overhead Door (OD) Corporation’s founder, C. G. Johnson, invented the upward-lifting garage door in 1921 and the electric garage door opener in 1926. Since then OD has been a leading supplier of commercial, industrial, and residential garage doors sold through a nationwide network of more than 450 authorized distributors. They have built a solid reputation as a premier door supplier, commanding 15 % share of the market. Suppose that customers assess door quality first in terms of the ease of operation, followed by its durability. The quality improvement team (QIT) might then assign an engineering team to determine the factors that contribute to these two main problems. Smooth operation of a garage door is a critical quality characteristic that affects both problems: If a door is too heavy, it’s difficult and unsafe to balance and operate; if it’s too light, it tends to buckle and break down frequently or may not close properly. Suppose the design engineers determine that a standard…

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