Step 4:

What percent of the variation in corn yield is explained by these two variables? Give your answers to 2 decimal places and do not include units in your answers.

Percent explained by the model = %

Step 5:

Using the regression equation, find a point estimate for the corn yield for 2014 Assume that the soy bean yield for that year is 42.

Point Estimate = (Give your answer to 1 decimal place.)

ID      Year    CornYield       SoyBeanYield
1       1957    48.3    23.2
2       1958    52.8    24.2
3       1959    53.1    23.5
4       1960    54.7    23.5
5       1961    62.4    25.1
6       1962    64.7    24.2
7       1963    67.9    24.4
8       1964    62.9    22.8
9       1965    74.1    24.5
10      1966    73.1    25.4
11      1967    80.1    24.5
12      1968    79.5    26.7
13      1969    85.9    27.4
14      1970    72.4    26.7
15      1971    88.1    27.5
16      1972    97      27.8
17      1973    91.3    27.8
18      1974    71.9    23.7
19      1975    86.4    28.9
20      1976    88      26.1
21      1977    90.8    30.6
22      1978    101     29.4
23      1979    109.5   32.1
24      1980    91      26.5
25      1981    108.9   30.1
26      1982    113.2   31.5
27      1983    81.1    26.2
28      1984    106.7   28.1
29      1985    118     34.1
30      1986    119.4   33.3
31      1987    119.8   33.9
32      1988    84.6    27.0
33      1989    116.3   32.3
34      1990    118.5   34.1
35      1991    108.6   34.2
36      1992    131.5   37.6
37      1993    100.7   32.6
38      1994    138.6   41.4
39      1995    113.5   35.3
40      1996    127.1   37.6
41      1997    126.7   38.9
42      1998    134.4   38.9
43      1999    133.8   36.6
44      2000    136.9   38.1
45      2001    138.2   39.6
46      2002    129.3   38.0
47      2003    142.2   33.9
48      2004    160.3   42.2
49      2005    147.9   43.1
50      2006    149.1   42.9
51      2007    150.7   41.7
52      2008    153.9   39.7
53      2009    164.7   44.0
54      2010    152.8   43.5
55      2011    147.2   41.9
56      2012    123.4   39.8
57      2013    158.8   43.3

Serial Case

1. C6-72Calculate and compare cost estimates using high-low and regression methods (Learning Objectives 4 & 5)

This case is a continuation of the Caesars Entertainment Corporation serial case that began in Chapter 1. Refer to the introductory story in Chapter 1, here for additional background. (The components of the Caesars serial case can be completed in any order.)

Caesar Entertainment Corporation’s Form 10-K contains a variety of data in addition to financial statements. Below is a list that contains Caesars’ food and beverage costs (adapted) taken from its Statements of Operations for the past 22 years. In addition, the number of hotel rooms and suites owned by Caesars at the end of each of those 22 years has been gathered from other information provided in the Form 10-Ks.

Requirements (use excel)

1. Using the high-low method, find the following cost estimates:
   1. Variable food and beverage cost per hotel room/suite
   2. Fixed food and beverage cost per hotel room/suite
2. Perform a regression analysis using Excel. Use # of hotel rooms & suites as the X and the Food and beverage costs as the Y in your regression analysis.
   1. What is the estimated variable food and beverage cost per hotel room/suite?
   2. What is the estimated fixed food and beverage cost per hotel room/suite?
   3. In your opinion, is the number of hotel rooms and suites a good predictor of Caesars’ food and beverage costs? Why or why not?

Electronics Source Agency Ltd. was a manufacturers’ sales representative that operated branch offices in most major population centers across Canada. In 1995, the corporation hired Felix as its senior Sale Manager for a large metropolitan city, an important sales area of the corporation. At the time of hiring, Felix had advised the President of the corporation that he had extensive sales experience in the sale of electronics, and the previous year had incorporated his own corporation with a view to establishing an electronics sales agency similar to the President’s company, but had decided not to proceed with the project. Felix and the President had no further discussion of Felix’s corporation, and proceeded to negotiate a written agreement that provided Felix with an annual salary of $150,000 year. The agreement was for indefinite hiring, but provided that either the employer or Felix could terminate the agreement on 6 month’s notice. Felix was very successful in his position as Sales Manager of the Metropolitan office for his first year on the job, but during the second year, he discovered that a large U.S. electronic manufacturer was seeking a manufacturer’s representative for its products in Canada. Based on this information, Felix decided to contact the U.S. manufacturer with a view to becoming the manufacturer’s representative in Canada, not for his employer, but for his own corporation that was presently dormant. Using his employer’s computer, he prepared an extensive Power Point presentation, incorporating a great deal of market information concerning the Metropolitan sales area as well as the Canadian market as a whole. The presentation required a significant amount of time, and Felix remained home from work for a week on the pretence of being ill with the flu while he completed the presentation. When his presentation was ready for presentation to the U.S. Manufacturer, he contacted the company, and a date two weeks hence was set for his presentation. A week before the presentation was to be made, the President of Electronics Source Agency Ltd. was made aware of the intentions of Felix. Rather than confront Felix immediately, the President decided to wait and see if Felix would inform him of his intentions, but Felix did not, and the day before Felix was to make his presentation to the U.S. Manufacturer, the President confronted Felix, and demanded an explanation. Felix admitted that it was his intention to make the presentation on behalf of his own company, and explained that he intended to resign if the presentation was successful. The President then advised Felix that he was dismissed, effective immediately. Felix proceeded with his presentation to the U.S. Manufacturer, but it was unsuccessful. Felix then took legal action against his employer, claiming wrongful dismissal. Discuss the arguments that may be raised by Felix and Electronics Source Agency Ltd. Render a decision.

a. please regress consumption on income and a constant term using formulas, write the calculations. (use word document)

b. Calculate the variance of the marginal propensity to consume (MPC)

c. Calculate R2 of the regression

Carter Cleaning Centers

Jennifer Carter graduated from State University in June 2005, and, after considering several job offers, decided to do what she always planned to do go into business with her father, Jack Carter. Jack Carter opened his first Laundromat in 1995 and his second in 1998. The main attraction of these coin laundry businesses for him was that they were capital- rather than labor-intensive. Thus, once the investment in machinery was made, the stores could be run with just one unskilled attendant and none of the labor problems one normally expects from being in the retail service business. The attractiveness of operating with virtually no skilled labor notwithstanding, Jack had decided by 1999 to expand the services in each of his stores to include the dry cleaning and pressing of clothes. He embarked, in other words, on a strategy of related diversification by adding new services that were related to and consistent with his existing coin laundry activities. He added these for several reasons. He wanted to better utilize the unused space in the rather large stores he currently had under the lease. Furthermore, he was, as he put it, tired of sending out the dry cleaning and pressing work that came in from our coin laundry clients to a dry cleaner 5 miles away, who then took most of what should have been our profits. To reflect the new, expanded line of services, he renamed each of his two stores Carter Cleaning Centers, and was sufficiently satisfied with their performance to open four more of the same type of stores over the next 5 years. Each store had its own on-site manager and, on average, about seven employees and annual revenues of about $500,000. It was this six-store chain that Jennifer joined after graduating. Her understanding with her father was that she would serve as a troubleshooter/consultant to the elder Carter with the aim of both learning the business and bringing to it modern management concepts and techniques for solving the business problems and facilitating its growth.

Questions:

1. In line with your course, define the significance of the case?

2. The case narrated that the owner was capital oriented rather than labor-intensive. As an HRM student, what do you think about the philosophy of the owner? Which suggestions you will recommend to utilize labour oriented philosophy in the organization?

3. What suggestions you will provide to Jennifer to link HRM policies and practices with the differentiation strategy of the organization? Justify your answer.

China has resurrected an exchange rate regime called Bretton Woods II, where these economies peg to the dollar. China pegged at Yuan8.28/$ from 1995 to 2005. (http://www.tradingeconomics.com/china/currency). On July 21, 2005, the People's Bank of China announced a revaluation of the Yuan (from Yuan8.28 to Yuan8.11 to the dollar) and a reform of the exchange rate regime. Under the reform., the People’s Bank of China linked its currency to a reference basket of currencies, heavily weighted toward the U.S. dollar. Over the next three years, under this crawling peg system, the yuan gradually appreciated against the dollar. With the advent of the global economic crisis, China reestablished the yuan's fixed peg to the dollar, at Yuan6.84/$ and maintained it for the next two years. China rolled out a new currency policy on June 20, 2010, that allowed the yuan to once again float upward, within limits, against the dollar; de facto, however, the Bretton Woods II regime remains intact and the currency pegged to the U.S. dollar. The Chinese central bank has managed this peg with widespread capital controls through quantitative limits on both inflows and outflows. The objectives of the controls have evolved over time, and include (i) facilitating monetary independence, (ii) helping channel external savings to desired uses; (iii) preventing firms and financial institutions from taking excessive external risks; (iv) maintaining balance of payments equilibrium and exchange rate stability; and (v) insulating the domestic economy from foreign financial crises.

Recently, the government has started to gradually liberalize capital flows and globally integrate China's capital markets in order to eventually establish Shanghai as a leading financial center. It remains unclear, however, whether China will yield more on monetary independence or exchange rate stability. Chinese authorities fear floating exchange rates, since they want to avoid a rapid and large appreciation of the yuan. This could have serious effects on employment and profits of multinationals in their export sector.

1. By how much did the yuan appreciate against the dollar on July 21,2005?

2. How has the yuan’s appreciation since July 21,2005 affected the U.S. trade deficit with China? Check the trade deficit with China over time at https://www.census.gov/foreign-trade/balance/c5700.html

3. How did the crawling-peg system in place from 2005 to 2008 likely affect inflows of hot money to China?

4. What is the likely reason for the Chinese government again fixing the yuan to the dollar upon the outbreak of the global economic crisis?

5. Why has China adopted capital controls?

Question 1                  
(Amounts are 14% VAT inclusive, where applicable. All calculations are to be done to the nearest cent)                  
Required                  
Record the transactions in the correct subsidiary journals, post to the general                  
ledger, debtors ledger and creditors ledger, and draw up a trial balance.                  
On 1 January 2007, Pets Traders had the following balances:                  
Stock R1 500 -Capital R2 287                  
Bank (favourable)R 1 200 - VAT control (Cr.) R900                  
Debtors: A. Adams R171                   
Debtors:B. Brown R855                   
Creditors: F.Farmell R1197                  
Creditors: P.Peters R342                  
Furniture R1 000                  
The following transactions took place during January 2007:                  
Cash sales - Cash Register                  
Date                   
Jan. 7- R228                  
Jan.14- R342                  
Jan. 21 -R456                  
Jan. 28 -R 570                  
Original credit invoices received:                  
Date                   
Jan. 4- P. Smith for goods R684                  
Jan 8. -Lotz for stationery 57                  
Jan10 -S. Pretorius for office desk R285                  
Jan 16 - F. Farmell for goods R2 052                  
Duplicate credit invoices issued:                  
Date                   
Jan. 11- A. Adams for goods R1 026                  
Jan 17 - B. Snell for goods R1 482                  
Duplicates of receipts issued:                  
Date                   
Jan. 4- No. 10 - B. Brown in settlement less 5% discount                  
Jan.10 - No 11 -H. Owner for rent of the shop R570                  
Jan.18- No 12 - A. Debt for an account written off as bad debt during                  
November 1995 R 228                  
Jan.25 -13 - S. Swart for old furniture sold R57                  
Credit notes received for goods returned:                  
Date                   
Jan. 8- P. Peter R114                  
Cheques issued:                  
Date                   
Jan. 2 -No. 40 - F. Farmell in settlement less 5% discount                  
Jan.4- No 41 Cash for petty cash imprest R100                  
Jan 5- No42 - Makro for goods R570                  
Jan.10- No 43 -SABC for advertising R342                  
Jan. 15- No 44 - P. Peter for goods R2 280                  
Jan. 20- No 45- City council for electricityR 228                  
Jan.20 - No 46 -SARS (VAT) R900                  
Jan.25 -No 47 -P. Flat for rent of private house of the owner R456                  
Sundry transactions:                  
Jan. 31 Items on the bank statement, but not in the cash book:                  
(a) Service fees R50                  
(b) Interest on savings account R30                  
(c) Cheque from S. Swart unpaid (refer January 25)                  
Closing stock: Goods 4 500                  

Manufacturers of aircraft engines have, like many other industrial manufacturers, tried to make engines that are more economical to operate while still providing the power needed to fly large-capacity aircraft. The Boeing 747, long considered the workhorse of the jumbo jet fleet, is powered by four engines, each capable of 44,700 lbs of thrust. Because 747’s have been around since 1969, maintenance costs now are relatively fixed; the goal for any airline is to plan for consistent, predictable maintenance costs.

The new era of more efficient planes include the Boeing 777, introduced in 1995, which has been used to replace many 747’s in airline company’s fleets. The 777’s engines feature aviation’s first-ever carbon-fiber composite fan blades, and each engine is capable of 84,000 lbs of thrust.

Not only are the newer engines capable of greater power, their efficiency also should provide lower maintenance cost variance. The following engine maintenance cost data (in $ millions) from a sample of the United Airlines fleet is provided on these two types of aircraft:

Hint: keep your data truncated as presented; do not convert the data into $millions.

A. Construct a 95% confidence interval for the standard deviation of the 747's engine maintenance cost.

Provide your answers to 4 decimal places.

   to  

B. Construct a 95% confidence interval for the standard deviation of the 777's engine maintenance cost.

Provide your answers to 4 decimal places.

     to  

C. Hypothesis testing. United Airlines now wants to test if the maintenance cost variance of its newer 777 planes is less than the industry standard.

According to data collected by the National Air Transportation Association, the industry standard maintenance cost variance for the fleet of all domestic-based 777 planes is $2.30 (in $ millions).

What is the proper statement of the hypothesis test criteria?

D. Using the data from the sample, answer the fill-in-the-blank questions, and make the correct hypothesis test conclusion, at a level of significance α = .10.

Based on these results, we should:

• Reject Ho

• Accept Ho

E. Given your decision to Accept or Reject the null hypothesis, what does the result of the hypothesis test tell us about the efficiency of United Airlines maintenance costs for it's 777 fleet compared to the industry average cost for all domestic airlines who also operate the 777?

You work for a supermarket that is considering the best way to promote sales of its store-brand canned vegetables. Store managers believe allocating additional shelf space to the store-brand canned vegetables would create additional sales. Company executives, on the other hand, believe increasing advertising expenditures would be a more effective strategy to expand sales. Complete a regression analysis to help answer this question (use the CANVEG Excel file posted on Canvas). NOTE: consider only a simple linear model, a multiple linear regression model, or an interaction model

1.Write out the equation that represents the hypothesized population regression equation for your model

2.Explain whether a positive or negative relationship is hypothesized

3.Use the “Microsoft Excel Data Analysis Toolpak” to determine the regression coefficients for the relationship and write out the final estimated regression equation. You must include the MS Excel output.

4.Give a practical interpretation of the slope(s) of the least squares line

5.Over what range of x-values is the interpretation meaningful?

6.Does the estimated slope support the relationship between the two variables you initially hypothesized (in parts a and b)? Explain.

7.Evaluate the overall utility of the model including any relevant hypothesis tests (be sure to fully write all 6-steps of any hypothesis test conducted, you can specify the rejection region in words it is not necessary to include a graph though you can if you prefer to).

8.Include any hypothesis tests of individual coefficients that are appropriate given your choice of model specification and results.

9.Given your results, would you recommend the company pursue expanding shelf space or increase advertising expenditures.

ID      Year    CornYield       SoyBeanYield
1       1957    48.3    23.2
2       1958    52.8    24.2
3       1959    53.1    23.5
4       1960    54.7    23.5
5       1961    62.4    25.1
6       1962    64.7    24.2
7       1963    67.9    24.4
8       1964    62.9    22.8
9       1965    74.1    24.5
10      1966    73.1    25.4
11      1967    80.1    24.5
12      1968    79.5    26.7
13      1969    85.9    27.4
14      1970    72.4    26.7
15      1971    88.1    27.5
16      1972    97      27.8
17      1973    91.3    27.8
18      1974    71.9    23.7
19      1975    86.4    28.9
20      1976    88      26.1
21      1977    90.8    30.6
22      1978    101     29.4

23      1979    109.5   32.1
24      1980    91      26.5
25      1981    108.9   30.1
26      1982    113.2   31.5

27      1983    81.1    26.2
28      1984    106.7   28.1
29      1985    118     34.1
30      1986    119.4   33.3
31      1987    119.8   33.9
32      1988    84.6    27.0
33      1989    116.3   32.3
34      1990    118.5   34.1
35      1991    108.6   34.2
36      1992    131.5   37.6
37      1993    100.7   32.6
38      1994    138.6   41.4
39      1995    113.5   35.3
40      1996    127.1   37.6
41      1997    126.7   38.9
42      1998    134.4   38.9
43      1999    133.8   36.6
44      2000    136.9   38.1
45      2001    138.2   39.6
46      2002    129.3   38.0
47      2003    142.2   33.9
48      2004    160.3   42.2
49      2005    147.9   43.1
50      2006    149.1   42.9
51      2007    150.7   41.7

Use both predictors. From the previous two exercises, we conclude that year and soybean may be useful together in a model for predicting corn yield. Run this multiple regression.

a)       Explain the results of the ANOVA F test. Give the null and alternate hypothesis, test statistic with degrees of freedom, and p-value. What do you conclude?

b)      What percent of the variation in corn yield in explained by these two variables? Compare it with the percent explained in the previous simple linear regression models.

c)       State the regression model. Why do the coefficients for year and soybean differ from those in the previous exercises?

d)      Summarize the significance test results for the regression coefficients for year and soybean yield.

e)      Give a 95% confidence interval for each of these coefficients.

f)        Plot the residual versus year and soybean yield. What do you conclude?