Exhibit 13 In Addition a Regression Analysis Indicates the Following Relationship Between

question 55

Multiple Choice

Exhibit 13.1
Use the Information Below for the Following Problem(S)
Assume that you are an analyst for the U.S. Autoparts Industry. Consider the following information that you propose to use to obtain an estimate of year 2002 EPS for the U.S. Autoparts Industry:
$\begin{array}{lrr}\begin{array}{l}\\\\\text{Personal consumption expenditures}\\\text{Personal consumption expenditures}\\ \text{growth}\\\text{Industry Sales per share}\\\text{Industry Operating profit margin}\\\text{Industry Depreciation/Fixed Assets}\\\text{Industry Fixed asset turnover}\\\text{Interest rate}\\\text{Industry Total asset turnover}\\\text{Industry Debt/Total assets}\\\text{Industry Tax rate}\\\end{array}\\begin{array}{r}\\\text{Year 2003}\\\hline\text{\$6,800 Billion}\\\\\\ \$ 525 \\\\\\\\\\\\\\\\end{array}\\begin{array}{r}Estimated\\\text{Year 2004}\\\hline\\ 1.5 \% \\\\\\ 15 \% \\8.25 \% \\3\\6 \% \\1.2 \\45 \% \\36\%\end{array}\\end{array}$

In addition a regression analysis indicates the following relationship between growth in industry sales per share and personal consumption expenditures (PCE) growth is
%D Sales per share = 0.02 + 1.5(%DPCE)
-Refer to Exhibit 13.1.Calculate the per share EBIT for the year 2004.

• A) $95.33
• B) $70.42
• C) $85.56
• D) $95.89
• E) $75.32

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Definitions:

Divestiture

Getting rid of a business unit. The reverse of an acquisition.

High Debt

A situation where an individual or organization carries a heavy financial obligation, often measured relative to income or assets, which can lead to increased risk and financial strain.

Proxy Fight

A fight for control of a corporation when two or more interests compete for the proxies of shareholders in the election of directors.

Shareholders

Individuals or institutions that own share(s) in a corporation, thereby having a claim on its profits and assets.