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

question 35

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 total assets per share for the year 2004.

• A) $450
• B) $565.67
• C) $513.58
• D) $479.07
• E) $385.77

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, indicating how much revenue contributes to fixed costs and profits.

Fixed Costs

Costs that remain constant in total regardless of changes in the level of activity or volume of production, such as rent, salaries, and insurance.

Fixed Costs

Costs that do not change with the level of production or sales activities within a certain range.