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

question 22

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.Estimate the industry sales per share for the year 2004.

• A) $574.9
• B) $600.0
• C) $585.03
• D) $625
• E) $550

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Definitions:

Portfolio

A mix of financial assets, involving equities, bond certificates, natural commodities, immediate cash, and quasi-cash instruments, along with mutual funds and ETFs.

Expected Returns

The average return anticipated on an investment, taking into account the probabilities of each possible outcome.

Standard Deviations

A statistic that measures the dispersion or spread of a set of data points in relation to their mean.

Investment

The action or process of allocating resources, usually money, with the expectation of generating an income or profit.