SCENARIO 16-9 Given Below Are EXCEL Outputs for Various Estimated Autoregressive Models

question 45

Multiple Choice

SCENARIO 16-9
Given below are EXCEL outputs for various estimated autoregressive models for a company's real operating revenues (in billions of dollars) from 1989 to 2012.From the data,you also know that the real operating revenues for 2010,2011,and 2012 are 11.7909,11.7757 and 11.5537,respectively.
First-Order Autoregressive Model:
Second-Order Autoregressive Model:

-Referring to Scenario 16-9,if one decides to use the Third-Order Autoregressive model ,what will the predicted real operating revenue for the company be in 2015?

• A)$11.59 billion
• B)$11.68 billion
• C)$11.84 billion
• D)$12.47 billion

Explain the concept of decision trees in analyzing project outcomes.

Understand how market risk and project specific risk influence the cost of capital.

Describe the impact of ignoring risk in capital budgeting decisions.

Differentiate between projects based on variance in cash flows and risk aversion principles.

---

Definitions:

Telemarketing

The direct marketing of goods or services to potential customers over the telephone.

Interactive Media

Media that allows active participation by the user, enabling two-way communication and engagement through digital platforms.

Industrial Distributors

Companies that specialize in distributing products and supplies to businesses, institutions, and industries rather than to individual consumers.

Consumer Products

Goods and services that are bought by individuals for personal use.