Question

In: Accounting

Consider a city in which urban density averages five housing units per acre. The city is...

  1. Consider a city in which urban density averages five housing units per acre. The city is fully circular with the CBD at the center. The distance between CBD and the city border is 30 miles. Land at 10 miles from CBD costs $500,000 per acre and land at 20 mile from CBD costs $300,000. Calculate annual transportation cost per mile assuming the city is currently neither growing nor shrinking.

Solutions

Expert Solution

To solve this question just input those variables which are to be used in logistic regression, as the question talks about using two variables only that is total loans and leases to total assets & total expenses/ total assets, so we will not input total cap/assets as an input variable in our excel, here we go

As one can see, we have taken only two variables , total exp/assets and total lns & leases/ assets in calculation, follwing steps have been followed to construct the above table

1. Assume logit= b0+ b1* independent variable1+ b2* independent variable 2 , take values of b0=0.1, b1=0.1, b2=0.1, note that these values of b0, b1 and b2 are just taken for calculation, one could assume any values here for bo , b1 and b2

2. Calculate exponential of logit in the next column by using exp (value in previous column)

3. Calculate probability by using formula, probability= exp (logit)/ { 1+ exp(logit)} in the next column

4. In next column, calculate log likelihood by using formula : financial condition value (i.e. 1 or 0) * LN( probability calculated in previous column) + (1- financial condition value)* LN( 1- probability calculated in previous column)

5. take the total of the column values of log likelihood

6. use solver function in excel to change this total by putting max value of 0 and changing the variable cells containing assumed values of b0, b1 and b2 , by clicking on solve, you will get actual values of b0, b1 and b2

which comes out to be b0=-14.72, b1=89.83, b2= 8.37

therefore you will get logit as

-14.72+ 89.83* Total exp/assets+8.37*Total lns & lsses/ assets

With values given in the question as total exp/ assets= 0.11 and total loans & leases/ assets= 0.6 , we get

logit as -14.72+ 89.83* 0.11+ 8.37*0.6= 0.1833

exp (logit) = 1.20

Probability= 0.546

Loglikelihood= 1*LN(0.546)+0*LN(1-0.546)= LN(0.546)= -0.605


Related Solutions

I planted a 5-acre Christmas tree farm at a density of 1,200 trees per acre. I...
I planted a 5-acre Christmas tree farm at a density of 1,200 trees per acre. I expect to harvest all of the trees in Year 9 (n=9) and plan to sell the trees for $60 each (in constant 2018 dollars – disregarding inflation). Using a real discount rate of 7%, what is the present value of the revenue (a benefit) from the Christmas tree harvest in Year 9? Report your answer as a whole number rounded to the nearest dollar...
Urban owns a valuable 10 acre plot of property which he wants to divide in half...
Urban owns a valuable 10 acre plot of property which he wants to divide in half (into two 5 acre parcels) and sell one of the halves. He tells Lovie that he can build 100 apartments on one of the halves, and specifically describes where the property lines would be (“It goes out to that tree, then to the water, then back…”). Lovie agrees to buy half from Urban, “as is” and they arrange to have the land surveyed. Urban...
Consider a city where the demand for housing for the typical household is Q = 1,200...
Consider a city where the demand for housing for the typical household is Q = 1,200 – 1,000P, where Q is the square footage demanded and P is the price per square foot. (a) Draw the demand curve for housing. [Hint: you might have to manipulate the equation as it is given to you!] (b) Assume that the price of housing is $0.70 per square foot. At this price, the typical household chooses __________ square feet, and enjoys a consumer...
A distributor of personal computers has five locations in the city. The sales in units for...
A distributor of personal computers has five locations in the city. The sales in units for the first quarter of the year were as follows: Location Observed Sales (units) North Side 70 Pleasant Township 75 Southwyck 70 I-90 50 Venice Avenue 35 At the .01 level of significance, what is your decision? Select one: a. Reject the null hypothesis because the computed p-value is less than the level of significance. b. Reject the null hypothesis because the computed p-value is...
Housing Price and Land Bid-Rent Numbers Consider a monocentric city where the cost of commuting is...
Housing Price and Land Bid-Rent Numbers Consider a monocentric city where the cost of commuting is $40 per mile per month. A household located eight miles from the city center occupies a dwelling with 1,000 square feet at a monthly rent of $600. Nonland cost per dwelling is $250, and there are 10 houses per hectare. a) The price of housing at a distance of eight miles is _____________ per square foot, computed as ...................... b) The bid rent for...
John's Shop demand for Clippers in San Deigo averages to 500 units per month (Note: there...
John's Shop demand for Clippers in San Deigo averages to 500 units per month (Note: there are 12 months in a year). John's Shop ordering costs is $2,000 per order. Ordering costs include order placement, transportation and receiving. The wholesale price John's Shop pays to its vendor is $250 per snow blower and John's Shop incurs a holding cost of 20 percent. Solve the problem in Excel and show formulas. a) What is the optimal lot size John’s Shop procurement...
Introduction to a paper about the five social determinants which are income, education, food, housing, and...
Introduction to a paper about the five social determinants which are income, education, food, housing, and transportation also include life goals with the 5 determinates Please write a long paragraph in your own words Thank you in advance
ABC Manufacturing produces a product for which the monthly demand is 900 units. Production averages 100...
ABC Manufacturing produces a product for which the monthly demand is 900 units. Production averages 100 units per day. Holding costs are $2.00 per unit per year, and setup cost is $200.00. the company operates 240 days per year a. If the company wishes to produce this product in economic batches, what size batch should be used? b. What is the maximum inventory level?           c. What is the average inventory?             d. How many order cycles...
What characteristics made Urban Decay an opportunity rather than simply an idea? Which of the five...
What characteristics made Urban Decay an opportunity rather than simply an idea? Which of the five roots of opportunity apply here? Please respond in paragraph form. 3-5 sentences.
For the next four questions, consider the following table of a city consisting of five districts...
For the next four questions, consider the following table of a city consisting of five districts that is debating where to build a new stadium and a free public wifi network. The table shows the benefit (positive) or harm (negative) in each city district from doing these projects. The socially best outcome (highest total benefit to the whole city) is to Question 11 options: build the stadium but not the wifi network. build the wifi network but not the stadium....
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT