discuss difference between the expected return estimate from the single factor model and those from multi factor model. which estimates are more likely to be more useful in practice
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discuss difference between the expected return estimate from the single factor model and those from multi factor model. which estimates are more likely to be more useful in practice.
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- еВook Cox Electric makes electronic components and has estimated the following for a new design of one of its products: Fixed Cost = $13,000 Material cost per unit = $0.15 Labor cost per unit = $0.10 Revenue per unit = $0.65 Production Volume - 12,000 Per-unit material and labor cost together make up the variable cost per unit. Assuming that Cox Electric sells all it produces, build a spreadsheet model that calculates the profit by subtracting the fixed cost and total variable cost from total revenue, and answer the following questions. (a) Construct a one-way data table with production volume as the column input and profit as the output. Breakeven occurs when profit goes from a negative to a positive value; that is, breakeven is when total revenue = total cost, yielding a profit of zero. Vary production volume from 5,000 to 50,000 in increments of 5,000. In which interval of production volume does breakeven occur? to units (b) Use Goal Seek to find the exact breakeven point. Assign…Given the data below, use the segmenting model to estimate a manufacturer's total annual cost. Estimated annual production volume = 400,000 units Estimated direct labor cost per unit = $3.75Estimated indirect labor cost per unit = $0.92Estimated raw material and purchased part cost per unit = $32.50All other costs are independent of production volume and are estimated at $800,000 per yearState any five assumptions of the benchmark mode and highlight the weaknesses of those assumptions.
- Critically/quantitatively evaluate the following statement (true, false or uncertain): • In a linear model, the Generalized Instrumental Variable (GIV) estimator BGIV is iden- tical to the Ordinary Least Squares (OLS) estimator BoLS.Consider the following Cobb-Douglas production function for the bus transportation system in a particular city: Q=aL B₁F B₂K B3 where L = labor input in worker hours, F = fuel input in gallons, K = capital input in number of buses, and Q = output measured in millions of bus miles. Suppose that the parameters (α, B₁, B₂, and ß3) of this model were estimated using annual data for the past 25 years. The following results were obtained: a = 0.0012; B₁ = 0.45; ß₂ = 0.20; and B3 = 0.30. Determine the labor, fuel, and capital input production elasticities. Input Production Elasticities Labor Fuel Capital Suppose that labor input (worker hours) is increased by 2% next year (with the other inputs held constant). What is the approximate percentage change in output? % Suppose that capital input (number of buses) is decreased by 1% next year (when certain older buses are taken out of service). Assuming that the other inputs are held constant, what is the approximate percentage change in output? %…Consider the following decomposition of the error term: v i t = a i + u i t The first part of this error term (ai) caputres ______and the second part (uit) caputres______. time constant unobserved factors, time varying unobserved factors time varying unobserved factors, time constant unobserved factors homoskedasticity, heteroskedasticity heteroskedasticity, homoskedasticity
- Consider the following Cobb-Douglas production function for the bus transportation system in a particular city: Q=aL B₁F B₂K B₂ where L = labor input in worker hours, F = fuel input in gallons, K = capital input in number of buses, and Q = output measured in millions of bus miles. Suppose that the parameters (a, B₁, B2, and B3) of this model were estimated using annual data for the past 25 years. The following results were obtained: a = 0.0012; B₁ = 0.45; B₂ = 0.20; and B3 = 0.30. Determine the labor, fuel, and capital input production elasticities. Input Production Elasticities Labor Fuel Capital Suppose that labor input (worker hours) is increased by 1% next year (with the other inputs held constant). What is the approximate percentage change in output? Suppose that capital input (number of buses) is decreased by 3% next year (when certain older buses are taken out of service). Assuming that the other inputs are held constant, what is the approximate percentage change in output? %…Consider the following Cobb-Douglas production function for the bus transportation system in a city: Q = Lβ1Fβ2Bβ3Where L = labour input in worker hours F = fuel input in gallons B = capital input in number of buses Q = output measured in millions of bus miles Suppose that the parameters (α, β1, β2 and β3) of this model were estimated using annual data for the past 25 years. The following results were obtained: β1 = 0.45, β2 = 0.20 and β3 = 0.30a. Determine the (i) labour, (ii) fuel, and (iii) capital-input production elasticities .b. Suppose that labour input (worker hours) is increased by 2 percent next year (with the other inputs held constant), determine the approximate percentage change in output. c. Suppose that capital input (number of buses) is decreased by 3 percent next year (which, certain older buses are taken out of service). Assuming that the other inputs are held constant, determine the approximate percentage change in output. d. What type of returns to scale appears…Consider the following Cobb-Douglas production function for the bus transportation system in a particular city: Q=aL B₁F B₂K B3 where L labor input in worker hours, F = fuel input in gallons, K = capital input in number of buses, and Q = output measured in millions of bus miles. Suppose that the parameters (α, B₁, B₂, and ß3) of this model were estimated using annual data for the past 25 years. The following results were obtained: α= 0.0012; B₁ = 0.45; ß₂ = 0.20; and ß3 = 0.30. Determine the labor, fuel, and capital input production elasticities. Input Production Elasticities Labor Fuel Capital Suppose that labor input (worker hours) is increased by 1% next year (with the other inputs held constant). What is the approximate percentage change in output? % Suppose that capital input (number of buses) is decreased by 3% next year (when certain older buses are taken out of service). Assuming that the other inputs are held constant, what is the approximate percentage change in output? %…
- A clothing manufacturer makes trousers,skirts and blouses.Each trouser requires 20 minutes of cutting time,60 minutes of sewing time and 5 minutes of packaging time.Each skirt requires 15 minutes of cutting time,30 minutes of sewing time and 12 minutes of packaging time.Each blouse requires 10 minutes of cutting time, 24 minutes of sewing time and 6 minutes of packaging time. The amount of time available for cutting,sewing and packaging is 115 hours, 280 hours and 65 hours respectively.Determine how many of each type of clothing should be made to use all available labour hours.A clothing manufacturer makes trousers, skirts and blouses. Each trouser requires 20 minutes of cutting time, 60 minutes of sewing time and 5 minutes of packaging time. Each skirt requires 15 minutes of cutting time, 30 minutes of sewing time and 12 minutes of packaging time. Each blouse requires 10 minutes of cutting time, 24 minutes of sewing time and 6 minutes of packaging time. The amount of time available for cutting, sewing and packaging is 115 hours, 280 hours and 65 hours respectively. Using either the Inverse Method or the Cramer’s Rule, determine how many of each type of clothing should be made to use all available labor hours?A large company in the communication and publishing industry has quantified the relationshipbetween the price of one of its products and the demand for this product as Price = 150 − 0.01× Demand for an annual printing of this particular product. The fixed costs per year (i.e., perprinting) = RM50,000 and the variable cost per unit= RM40. a) Analyze what is the maximum profit that can be achieved if the maximum expected demand is 6,000 units per year. b) Compute what is the unit price at this point of optimal demand.