Consider the following table: Weights 25% 25% Risk Solvenc Repayme 10% Profitabilit 10% Liquidit 10% Financial 20% Collater Class y nt y y Efficiency al 1 X 2 X X 3 X 4 X 5 X Based on the above information, find the weighted average score using the single rating system. O 3.5 O 2.8 O 8.2 3.8

How do the shareholders who own a company choose the actual company managers?

The Questor Corporation has experienced the following sales pattern over a 10-year period: Compute the equation of a trend line (similar to Equation 5.4) for these sales data to forecast sales for the next year. (Let 2004=0,2005=1, etc., for the time variable.) What does this equation forecast for sales in the year 2014? Use a first-order exponential smoothing model with a w of 0.9 to forecast sales for the year 2014.

The economic analysis division of Mapco Enterprises has estimated the demand function for its line of weed trimmers as QD=18,000+0.4N350PM+90Ps where N=numberofnewhomescompletedintheprimarymarketarea PM=priceoftheMapcotrimmerPS=priceofitscompetitorsSurefiretrimmer In 2010, 15,000 new homes are expected to be completed in the primary market area. Mapco plans to charge $50 for its trimmer. The Surefire trimmer is expected to sell for $55. What sales are forecasted for 2010 under these conditions? If its competitor cuts the price of the Surefire trimmer to $50, what effect will this have on Mapcos sales? What effect would a 30 percent reduction in the number of new homes completed have on Mapcos sales (ignore the impact of the price cut of the Surefire trimmer)?

Furniture Forecasting Futura Furniture Products manufactures upscale office furniture for the Office of the Future. The sales division comprises regionally based sales offices made up of sales representatives and regional managers. Sales representativeswho report to the regional managersconduct direct sales efforts with customers in their regions. As part of the sales process, representatives gather information about likely future orders and convey that information back to the regional managers. Regional managers use that information to create sales forecasts, which are then used as the basis for manufacturing schedules. Sales representatives and regional managers are both compensated on a salary plus commission (percentage of revenue as pricing is centrally controlled). However, a regional managers commission is adjusted based on regional sales that exceed the forecasted budget. Corporate managers are concerned with one of Futuras key products, the DeskPod. They worry that DeskPod forecasts are inaccurate, causing extreme havoc in the manufacturing process. How are the forecasts likely to be inaccurate? What do you think is driving this inaccuracy? How might this problem be solved?

Savings-Mart (a chain of discount department stores) sells patio and lawn furniture. Sales are seasonal, with higher sales during the spring and summer quarters and lower sales during the fall and winter quarters. The company developed the following quarterly sales forecasting model: Y t=8.25+0.125t2.75D1t+3.50D3t where Y t=predictedsales(million)inquartert 8.25=quarterlysales(million)whent=0 t=timeperiod(quarter)wherethefourthquarterof2002=0,firstquarterof2003=1,secondquarterof2003=2,... D1t={1forfirst-quarterobservations0otherwiseD2t={1forsecond-quarterobservations0otherwiseD3t={1forthird-quarterobservations0otherwise Forecast Savings-Marts sales of patio and lawn furniture for each quarter of 2010.

A firm experienced the demand shown in the following table. *Unkown future value to be forecast Fill in the table by preparing forecasts based on a five-year moving average, a three-year moving average, and exponential smoothing (with a w=0.9 and a w=0.3). Note The exponential smoothing forecasts may be begun by assuming Y t+1=Yt. Using the forecasts from 2005 through 2009, compare the accuracy of each of the forecasting methods based on the RMSE criterion. Which forecast would you have used for 2010? Why?

In the Southern Company Managerial Challenge, which alternative for complying with the Clean Air Act creates the greatest real option value? How exactly does that alternative save money? Why? Explain why installing a scrubber burns this option.