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

question 65

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 industry level of debt for the year 2004.

• A) $215.58
• B) $300.75
• C) $237.67
• D) $285.98
• E) $193.72

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Definitions:

Assembly Cost

The total expense incurred in putting together the components or parts of a product, typically in manufacturing.

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The price set for goods or services sold between divisions within the same company to maximize overall company profit.

Competitive Market

A market structure characterized by a large number of buyers and sellers, similar products, and easy market entry and exit, leading to competitive prices.

Wool Fabric

A textile material derived from the fleece of sheep or other animals, known for its warmth, durability, and natural insulating properties.