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

question 49

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. Obtain an estimate of the per share depreciation charge for the year 2010.

• A) $15.81
• B) $12.35
• C) $23.68
• D) $25.93
• E) $35

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Definitions:

Restricted-Use Registration

A regulatory status limiting the use of certain products, such as chemicals or pesticides, to certified professionals to mitigate risks.

Certified Applicator

An individual or entity recognized and authorized to apply certain products, often chemicals, according to regulatory standards.

FIFRA

The Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) governs the registration, distribution, sale, and use of pesticides in the United States.

TSCA

The Toxic Substances Control Act, a United States law passed by Congress in 1976 designed to regulate the introduction of new or already existing chemicals.