The value of a sports franchise is directly related to the amount of revenue a franchise can generate. The accompanying data table shows the annual revenue​ (in millions of​ dollars) and value​ (in millions of​ dollars) for 30 baseball franchises. Complete parts​ (a) through​ (c) below.

a. Construct a 95​% confidence interval estimate of the mean value of all baseball franchises that generate ​$150 million of annual revenue.

b. Construct a 95​% prediction interval of the value of an individual baseball franchise that generates $150 million of annual revenue.

c. Explain the difference in the results of​ (a) and (b).Choose the best explanation below.

A. The prediction interval is wider than the confidence interval because simple linear regression is inadequate for analyzing these data. They should be the same.

B. The prediction interval is wider than the confidence interval because the standard deviation of the value data is larger than the standard deviation of the revenue data.

C. The prediction interval is wider than the confidence interval because there is more variation in predicting an individual value than in estimating a mean value.

D. The prediction interval is wider than the confidence interval because the franchise value data are larger than the franchise revenue data.

Suppose a firm is producing a level of output such that marginal revenue is equal to marginal cost. The firm is selling its output at a price of $6 per unit and is incurring average variable costs of $7 per unit and average total costs of $8 per unit. Given this information, it may be concluded that the firm:

Group of answer choices

is operating at maximum total profit

is operating at a loss that could be reduced by shutting down

is operating at a profit that could be increased by producing more output

is operating at a loss that is less than the loss incurred by shutting down

For each of the following items, calculate the amount of revenue or expense that should be recognized on the income statement for Pelkey Co. for the year ended December 31, 2016:  

Required:

a. Cash collected from customers during the year amounted to $878,000, and accounts receivable increased by $46,300. How much were sales on account for the year ended December 31, 2016?.

b. Cash payments for income taxes during the year were $189,000, and income taxes payable increased by $39,500. How much was income tax expense?

c. Cash paid to suppliers during the year amounted to $622,000, accounts payable decreased by $38,700, and inventories decreased by $22,600. How much was cost of goods sold?

d. The net book value of buildings increased by $128,000. No buildings were sold, and a new building costing $278,000 was purchased during the year. How much was depreciation expense?

A researcher was interested in the revenue figures for the opening weekend of films released in the last calendar year January to December 2016. The following model is estimated by OLS, from a sample of 1,200 films:

ln(R_i) = β₀ + β₁ ln(B_i) + β₂ S_i + β₃ R15_i + u_i

where R = Revenue, B = Budget for film production, S = Critics’ average score for the film, R15=1 if the film rating is for 15 year olds and above and ln is the natural log.

Variable          Coefficient     Standard error

CONSTANT 15.473             5.3559

ln(B)                1.6652             1.0283

S                      0.2745             0.1449

R15                 -0.0834            0.0232

a)  Interpret the estimated slope coefficients. Do they have the expected signs? Explain.

b)  Is the coefficient of S significant at 5%?

c)  What model would you estimate (what additional variables would you need to define, if any) to answer the question is the return to revenue different in terms of an additional increase in the budget for films rated for under 15 year olds and 15 years old and above?

Discuss the relationship between price elasticity and total revenue. Are they significant?

Explain the relationship between price elasticity of demand and total revenue.

For this exercise, assume that

The purchase price for the colonoscopy simulator is $4,000

The revenue from each colonoscopy, on average, is $450.

Each colonoscopy requires $200 worth of supplies.

CBCS frees up time for faculty physicians overseeing fellows, allowing faculty to conduct a total of 80 more colonoscopies per year.

Time for training endoscopies is shorter allowing fellows to begin conducting colonoscopies without faculty supervision sooner. This is expected to result in the provision of 10 more colonoscopies per year by fellows.

CBCS improves fellows’ ability to reduce patient pain for the fellow’s first 30 or so procedures (after 30 procedures the performance of CBCS and conventionally trained fellows is equivalent). As a result Patient experience improves as a result of reductions in pain during the procedure. Finance estimates these improvements will result in 10 additional procedures per year as patients choose your health system Economists studying patient experience have valued a low-pain colonoscopy as worth $500 more to the average patient, although current reimbursement does not reflect this additional value

2% of colonoscopies will identify a polyp that will have to be surgically removed. All of these surgeries occur at the health system and profit per surgery averages $1,000

The hospital’s endoscopy suite is freestanding. Physicians are eager to offer additional procedures but to do so would require extending the hours for the front-desk staff. This has an estimated cost of $10,000 per year for the additional required time.

Annual rent on the current endoscopy suite is $300,000.

Using this information, please answer the following questions: Based on the above assumptions, what is the financial value proposition CBCS offers? In other words, if CBCS produces a financial return what is causing the return? This is a conceptual question. You don’t need to do any calculation at this point.

Create a model in Excel that quantifies the financial return on CBCS. Create your projections for 5 years.

3. Using an 8% discount rate, calculate the NPV of the CBCS project?

4. Using an 8% discount rate, calculate the IRR of the CBCS project?

5. Calculate the payback period of the CBCS project?

How can an organization improve its revenue cycle management?

3. The revenue derived from the sale of shirts is represented by ? = 521? − ?2 where n is the number of shirts sold and R is the daily revenue. It is also known that the fixed cost is $5,364 per day plus a variable cost of $205 per shirt.

1. (a) Construct an equation to express the total cost per day (TC), in $, in terms of n.

2. (b) Find the profit function using the equation: Profit (P) = Revenue – Total Cost.

3. (c) Hence, determine the values of n for which the shop can make a profit.

4. (d) Find the maximum profit with the profit function found in (b) and the corresponding number of

shirts sold per day.