My friend drives a 2010 Nissan Altima with ≈ 105,500 miles. Assuming he could drive this car for up to 5 more years and then sell, calculate the equivalent uniform annual cost of ownership over the next 5 years.

Specific Instructions:

1. Estimate 6 costs of ownership over the next 5 years. He knows his car is aging, so at least two of your cash flows need to be gradient cash flows. Explain each of your estimates (e.g. if you estimate a salvage value, explain why). There are many sources of information about costs for cars (library, internet, local mechanics,. . . ). The more specific your information is to this car, the better.

2. Compute his EUAC, showing work.

3. Now incorporate uncertainty into two of your estimates (each with three or more outcomes). Again, explain your estimates. Compute the expected value and standard deviation of EUAC.

4. Perform sensitivity analysis on 2 project parameters (different from the parameters used in part 3) which do not affect total EUAC linearly. Support your explanation of the sensitivity.

5. Identify one replacement options and calculate the same set of costs of ownership for that car.

6. Determine if and when you would recommend him to replace his car.

3-part question based on this data:

a) Draw a scatterplot of Distance vs. Year (using the untransformed data) with the least-squares regression line. Does the line seem to model the relationship well?

b) Do a linear regression for Distance vs. ln(Year), Ln(Distance) vs. Year, Ln(Distance) vs. Ln(Year)

c) Which transformation yields the highest correlation coefficient (Pearson's r)? Sketch a scatterplot of this transformation and show the least-squares line. What is the value of r and r² for that transformation, and what regression equation does it yield?

The following stem-and-leaf diagram gives the distances (in thousands of
miles) driven during the past year by a sample of 15 drivers.
0 3 6 9
1 2 8 5 1 0 5
2 5 1 6
3 8
4 1
5
6 2
(a) (1 point) Rank the data on a single line.
(b) (1 point) Compute the mode.
(c) (2 points) Compute the first and third quartiles.
(d) (1 point) Compute the interquartile range.
(e) (2 points) Compute the lower and upper inner fences.
(f) (3 points) Compute the 83rd percentile.

Suppose that the miles-per-gallon (mpg) rating of passenger cars is a normally distributed random variable with a mean and standard deviation of 33.8 and 3.5 mpg, respectively.

a. What is the probability that a randomly selected passenger car gets more than 35mpg?

b. a random sample of twenty-five passenger cars is selected. Denote Xbar as the sample average mpg of this twenty-five. What is the mean and standard deviation of Xbar?

c. What is the probability that the average mpg of twenty-five randomly selected passenger cars is more than 35 mpg?

The Bahamas is a tropical paradise made up of 700 islands sprinkled over 100,000 square miles of the Atlantic Ocean. According to the figures released by the government of the Bahamas, the mean household income in the Bahamas is $34,627 and the median income is $31,880. A demographer decides to use the lognormal random variable to model this nonsymmetric income distribution. Let Y represent household income, where for a normally distributed X, Y = e^X. In addition, suppose the standard deviation of household income is $11,000. Use this information to answer the following questions. [You may find it useful to reference the z table.]

a. Compute the mean and the standard deviation of X. (Round your intermediate calculations to at least 4 decimal places and final answers to 4 decimal places.)

b. What proportion of the people in the Bahamas have household income above the mean? (Round your intermediate calculations to at least 4 decimal places, “z” value to 2 decimal places, and final answer to 4 decimal places.)

c. What proportion of the people in the Bahamas have household income below $14,000? (Round your intermediate calculations to at least 4 decimal places, “z” value to 2 decimal places, and final answer to 4 decimal places.)

d. Compute the 90th percentile of the income distribution in the Bahamas. (Round your intermediate calculations to at least 4 decimal places, “z” value to 3 decimal places, and final answer to the nearest whole number.)

4. Listed below are the combined city – highway fuel consumption ratings (in miles per gallons) for different cars measured in old rating system and cars in a new rating system introduced in 2008 (based on data from USA today). A. Construct a 90 percent confidence interval of the difference in the ratings of cars. (Use 3 decimal places) (10 pts) Old Rating: 16 18 27 17 33 28 33 18 24 19 18 27 22 18 20 29 19 27 20 21 New Rating: 15 16 24 15 29 25 29 16 22 17 16 24 20 16 18 26 17 25 18 19 B. Based on the interval is there a reason to believe that there is a difference in the ratings of the two cars? C. Is there any significant difference in the old and new ratings of cars? Use appropriate hypothesis test to answer this question.

Authentic Car Services is the only transportation provider in a midsized county, about 65 miles outside of a major city. Licensed by the local government, the firm provides door to door service between the residents’ homes, the train station (which connects to the major city), local retail stores, and other key locations within and surrounding the town center. To access the service, residents may call for a specific pick-up time, or they could wait by any curb for an unscheduled curbside pick-up.

The market demand for transportation services is described by the equations: P = 8 – 0.015Q and MR = 8 – 0.03Q, where Q is the number of trips per week.

With regular maintenance on its fleet of vehicles as well as outstanding loan payments, the firm faces a weekly fixed cost of $200.

Authentic Car Services’ labor force includes drivers and dispatchers, and all report to work if the firm is providing service. Along with the labor force and the necessary materials needed for day-to-day operation, the firm’s additional costs can be described by the equations: MC = 2 + 0.01Q and AVC = 2 + 0.005Q, where Q is the number of trips per week.

1. Currently, Authentic Car Services provides _________ trips per week and charges $_________ for each trip.

2. At the current profit-maximizing quantity, Authentic Car Services’ profit is $______ per week.

3. The current market outcome ______ (either is or is not | is | is not ) efficient and a measure of this ______ (efficiency | efficiency or inefficiency | inefficiency) is $ _______.

Now consider that consumers’ income increases, and transportation services is a normal good. As a result, the new market demand for transportation services is described by one of the following equation sets:

Equation A: P = 7 – 0.015Q, and MR = 7 – 0.03Q

Equation B: P = 10 – 0.015Q and MR = 10 – 0.03Q

The market fully adjusts after the demand shock.

4. As a result of the shock, the new market demand is described by Equation ____ (A | B) .  Authentic Car Services now provides ______ trips per week and charges $_____ for each trip.

5. As a result of the shock, consumers’ surplus has decreased. Now, Authentic Car Services has _________ (a higher | a lower | no change in its) economic profit, and the overall market _______ (efficiency | efficiency or inefficiency | inefficiency) has _________ (decreased to | increased to | remains the same at ) $.___________.

Lon Timur is an accounting major at a midwestern state university located approximately 60 miles from a major city. Many of the students attending the university are from the metropolitan area and visit their homes regularly on the weekends. Lon, an entrepreneur at heart, realizes that few good commuting alternatives are available for students doing weekend travel. He believes that a weekend commuting service could be organized and run profitably from several suburban and downtown shopping mall locations. Lon has gathered the following investment information.

(a)

Determine the annual (1) net income and (2) net annual cash flows for the commuter service. (Round answers to 0 decimal places, e.g. 125.)

(b)

Compute (1) the cash payback period and (2) the annual rate of return. (Round answers to 2 decimal places, e.g. 10.50.)

(c)

Compute the net present value of the commuter service. (Round answer to 0 decimal places, e.g. 125. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

2A Lon Timur is an accounting major at a midwestern state university located approximately 60 miles from a major city. Many of the students attending the university are from the metropolitan area and visit their homes regularly on the weekends. Lon, an entrepreneur at heart, realizes that few good commuting alternatives are available for students doing weekend travel. He believes that a weekend commuting service could be organized and run profitably from several suburban and downtown shopping mall locations. Lon has gathered the following investment information. 1. Five used vans would cost a total of $75,000 to purchase and would have a 3-year useful life with negligible salvage value. Lon plans to use straight-line depreciation. 2. Ten drivers would have to be employed at a total payroll expense of $48,000. 3. Other annual out-of-pocket expenses associated with running the commuter service would include Gasoline $16,010, Maintenance $3,300, Repairs $4,000, Insurance $4,210, and Advertising $2,510. 4. Lon has visited several financial institutions to discuss funding. The best interest rate he has been able to negotiate is 15%. Use this rate for cost of capital. 5. Lon expects each van to make ten round trips weekly and carry an average of six students each trip. The service is expected to operate 30 weeks each year, and each student will be charged $11.95 for a round-trip ticket. Click here to view PV table. (a) Determine the annual (1) net income and (2) net annual cash flows for the commuter service. (Round answers to 0 decimal places, e.g. 125.) Net income $ Net annual cash flows $ (b) Compute (1) the cash payback period and (2) the annual rate of return. (Round answers to 2 decimal places, e.g. 10.50.) Cash payback period years Annual rate of return % (c) Compute the net present value of the commuter service. (Round answer to 0 decimal places, e.g. 125. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present value

Can we predict the running time for Mr. Degges when he runs 3.1 miles on the track at the NDSU Wellness center?

Need: SAS output to analyze the model

Need: prediction equation

y-hat

SSE SST, error, F-test

What variables are significant

The variables are: Y = running time in minutes X1 = weight at the time of running X2 = number of days between running events

Year X1 X2   Y

2009 191.2 1 29.0

2009 192 1   27.80

2009 190.4 2 28.53

2009 190.4 3 28.10

2009 190.6 2   28

2009 190.6 0   27.43

2009 190.2 0 28

2009 191.8 1    27.27

2009 189.2 12 30.52

2009 189.2 0 28.95

2009 190.2 2 29.08

2015 168.6 14 29.92

2015 166.2 4   29.83

2015 165.0 2 28.37

2015 169.8 6 27.25

2015 169.4 4 27.85

2015 167.2 3 27.58

2015 166.6 2 27.10