Exhibit 8-1
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 73

Multiple Choice

Exhibit 8-1
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
Assume that you are an analyst for the Canadian auto parts industry. Consider the following information that you propose to use to obtain an estimate of year 2010 EPS for the Canadian auto parts industry $\begin{array}{lcc}& \text { Year 2009 } & \text { Estimated Year 2010} \\\hline \text { Personal consumption expenditures } & \$ 6,800 \text {billion } \\\text {Personal consumption expenditures growth } &&1.5 \%\\\text {Industry Sales per share } &\$ 525\\\text { Industry Operating profit margin } &&15 \% \\\text {Industry Depreciation/Fixed Assets } &&8.25 \% \\\text { Industry Fixed asset turnover } &&3 \\\text {Interest rate } &&6 \% \\\text {Industry Total asset turnover } &&1.2 \\\text {Industry Debt/Total assets } &&45 \% \\\text { Industry Tax rate} &&36 \%\end{array}$
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(%D PCE)
-Refer to Exhibit 8-1. Estimate the industry growth rate in sales per share.

• A) 10.5%
• B) 11%
• C) 12.16%
• D) 9.5%
• E) 8.73%

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Definitions:

Meiosis I

The first division of meiosis, a type of cell division that reduces the chromosome number by half, leading to the production of gametes or spores.

Prenatal Development

Prenatal development is the process of growth and development within the womb, where a single-cell zygote transforms into a full-term baby.

Maturation

Maturation refers to the process of becoming mature, encompassing growth and developmental changes in physical, psychological, or emotional states over time.

Embryonic

Relating to an embryo, which is an organism in the early stages of development before birth, especially during the first eight weeks in humans.