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## The Automotive Supply Company Produces Speedometers

Table of Contents

Order ID# 45178248544XXTG457Plagiarism Level: 0-0.5%Writer Classification: PhD competentStyle: APA/MLA/Harvard/ChicagoDelivery: Minimum 3 HoursRevision: PermittedSources: 4-6Course Level: Masters/University CollegeGuarantee Status: 96-99%

InstructionsThe Automotive Supply Company Produces Speedometers

Managerial Economics

- The Automotive Supply Company produces speedometers. Its annual fixed costs are $30,000,
and its variable costs are $10 per unit. It can sell a speedometer for $25.

- How many speedometers must the company sell to break even?
- What is the break-even revenue?
- The company sold 3,000 units last year. What was its profit?
- Next year’s fixed costs are expected to rise to $37,500. What will be the break-even
level of output?

- If the company will sell the number of units obtained in part d, and wants to maintain the
same level of profit as last year, what will its new price have to be?

MBA Managerial Econ

- Suppose a savings and loan association wants to forecast the delinquency rate on home mortgages. Using monthly data, the following trend model is estimated DRt = a + bt where DRt = the percentage of mortgage payments delinquent in time period t, and t = 1,..,48 (January 2007 through December 2010). The following estimation results are obtained: DEPENDENT VARIABLE: DRT R-SQUARE F-RATIO P-VALUE ON F OBSERVATIONS: 48 0.7982 181.93 0.0001 VARIABLE PARAMETER ESTIMATE STANDARD ERROR T-RATIO P-VALUE INTERCEPT 2.60 0.74 3.51 0.0010 T 0.030 0.010 3.00 0.0043 a. Does this estimate indicate a significant upward trend in the delinquency rate on home mortgages? In the space below, perform the appropriate t-test at the 5 percent significance level. b. Perform an F-test to determine if the model is statistically significant at the 5 percent level of significance. c. Calculate the predicted delinquency rates for January 2011 and March 2011. DRJan 2011 = ________ percent DRMar 2011 = ________ percent Show your work here: The trend analysis above indicates that the delinquency rate is rapidly becoming a serious problem for this savings and loan. A management consultant suggests that the trend analysis may be overstating the upward trend because it fails to account for the fact that the months of December and January are consistently much worse months than the rest. The consultant suggests estimating the following model: DRt = a + bt + cD where D is equal to one for the months of December and January, and zero otherwise. The estimation results are: DEPENDENT VARIABLE: DRT R-SQUARE F-RATIO P-VALUE ON F OBSERVATIONS: 48 0.9876 1794.0 0.0001 VARIABLE PARAMETER ESTIMATE STANDARD ERROR T-RATIO P-VALUE INTERCEPT 2.200 0.780 2.82 0.0071 T 0.018 0.004 4.50 0.0001 D 0.810 0.210 3.86 0.0004 d. Does the new model indicate a significant upward trend in the delinquency rate? Perform the appropriate t-test. e. Perform a t-test to determine whether December and January are significantly worse months for mortgage payments. f. Predict the delinquency rates for January 2011 and March 2011. DRJan 2011 = ________ percent DRMar 2011 = ________ percent Show your work here: g. Compare your forecasts in parts c and f. Explain why they differ.
The Automotive Supply Company Produces Speedometers

RUBRICExcellent Quality95-100%

Introduction45-41 points

The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.

Literature Support91-84 points

The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.

Methodology58-53 points

Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.

Average Score50-85%

40-38 points More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.

83-76 points Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.

52-49 points Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.

Poor Quality0-45%

37-1 points The background and/or significance are missing. No search history information is provided.

75-1 points Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.

48-1 points There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met

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