Consider the following from an estate agent business: Month Houses Sold Jan 380 Feb 360 Mar 390 Apr 400 May 390 June 380 July 394 Aug 454 Sep 460 Oct 460 Nov 430 Dec 370 a) Calculate the three point moving averages (quarters) and seasonal variation for the above data b) A detective figures he has a one in nine chance of recovering stolen property. His out-of-pocket expenses for the investigation are $9,000. If he is paid his fee only if he recovers the stolen property, what should he charge clients in order to breakeven? c) At the races, your horse, has a probability of 1/20 of coming 151, 1/10 of coming 2nd and a probability of ¼ in coming 3rd. First place pays $4,500 to the winner, second place $3,500 and third place $1,500. Hence, is it worth entering the race if it costs $1,000? d) Your company plans to invest in a particular project. There is a 35% chance you will lose $30,000, a 40% chance you will break even, and a 25% chance you will make $55,000. Based solely on this information, what should you do? e) A manufacturer is considering the manufacture of a new and better mousetrap. She estimates the probability that the new mousetrap is successful is ¾. If it is successful it would generate profits of $120,000. The development costs of the mousetrap are $98,000. Should the manufacturer proceed with plans for the new mousetrap? Why or why not?
Consider the following from an estate agent business:
Month Houses Sold
Jan 380
Feb 360
Mar 390
Apr 400
May 390
June 380
July 394
Aug 454
Sep 460
Oct 460
Nov 430
Dec 370
a) Calculate the three point moving averages (quarters) and seasonal variation
for the above data
b) A detective figures he has a one in nine chance of recovering stolen
property. His out-of-pocket expenses for the investigation are $9,000. If he
is paid his fee only if he recovers the stolen property, what should he charge
clients in order to breakeven?
c) At the races, your horse, has a probability of 1/20 of coming 151, 1/10 of
coming 2nd and a probability of ¼ in coming 3rd. First place pays $4,500 to
the winner, second place $3,500 and third place $1,500.
Hence, is it worth entering the race if it costs $1,000?
d) Your company plans to invest in a particular project. There is a 35% chance
you will lose $30,000, a 40% chance you will break even, and a 25% chance
you will make $55,000. Based solely on this information, what should you
do?
e) A manufacturer is considering the manufacture of a new and better
mousetrap. She estimates the probability that the new mousetrap is
successful is ¾. If it is successful it would generate profits of $120,000. The
development costs of the mousetrap are $98,000. Should the manufacturer
proceed with plans for the new mousetrap? Why or why not?
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