Quantitative Business Analysis
Question Description
Complete the following curve-fitting problem.
Stevie knows the following information regarding sales at the convenience mart he works at. He notices that sales have appeared to rise over time.
a. Fit a linear curve to the data using Excel or another spreadsheet application. What is the equation for the model? What is the R-squared value?
b. Fit an power curve to the data. What is the equation for the model? What is the R-squared value?
c. Fit an exponential curve to the data. What is the equation for the model? What is the R-squared value?
d. Based on highest R-squared value, use the equation that fits the curve best to predict the sales for the year 7.
Year | Sales |
1 | 10,000 |
2 | 12,000 |
3 | 16,000 |
4 | 22,000 |
5 | 30,000 |
6 | 40,000 |
3. Complete the Break-Even Analysis at Sports Exchange Case on page 92 of your course text. Answer the following questions.
a. What is the total cost for each of the alternatives for refinishing that quantity of helmets?
b. Which alternative appears to be the best choice (i.e., lowest total cost)?
c. What alternative appears to the best choice if quantity to refinish increases to 320,000 helmets?
d. The cost accountants at SportsExchange may have made an error in calculating the fixed costs associated with the Spray Center alternative. They now believe that the fixed costs for the Spray Center alternative should be $150,000. If SportsExchange expects to refinish 200,000 helmets, which alternative looks the best now?
e. What happens to the relative attractiveness of the Crystal Coat alternative as Spray Center’s fixed costs decrease to $150,000?
I know there is an ending paragraph in this problem that deals with variable cost sensititivty but you don't need to complete that analysis.
Tutor Answer
Attached.
Surname 1
Student:
Professor:
Course:
Date:
Complete the Break-Even Analysis
a. Total cost for each alternative
Particulars
A: Enviro-Spray
B: Spray Center
C: Crystal Coat
Variable Cost
(200,000×$0.148)
(200,000×$1.321)
(200,000×$0.910)
=$29,600
=$264,200
=$182,000
Fixed Cost
$500,000
$207,500
$265,000
Total Cost
$529,600
$471,700
$447,000
b. The ...
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