Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Statistics and Probability Expert

Probability

3DP, a Luxembourg-based company plans to build up and sell highly specialized 3D printers. The cost of product development is estimated at EUR 50,000.-, irrespective of whether or not the product is finally marketed. The company owners put the odds of a successful product launch at 70%.

The market for such a sophisticated piece of the equipment is rather limited: the number of orders is supposed to follow a binominal distribution. In the first quarter will definitely not exceed 20, and the probability of placing a single order is evaluated at 30%. The variable cost would amount to EUR 3,300. - And the final price tag would be set on EUR 15,500.-
As the company owners have secured the patent for their innovative technology, a viable alternative to launching the production is simply to sell the license. USAin3D, a U.S.-based company is a potential buyer offering USD 7,800. - (non-negotiable) and 3DP owners should take the final decision before the three months.

By that time, of course, the EUR/USD exchange rate will surely alter. A friend of 3DP owners, who occurs to be a financial analyst, estimates that in three months’ time the EUR/USD exchange rate will fall by not more than -10.504% with the probability of 2.5%. To make this estimate, he supposed that the percentage change of the EUR/USD exchange rate follows a normal distribution with (three-month) volatility of 5.9535%. The current (spot) EUR/USD exchange rate is equal 1.3684 (dollars per one euro).

problems:

1. Estimate the Expected Monetary Value (EMV) of the two options: product launch and selling the license. What must be the decision through the 3DP owners based solely on financial considerations? Is it a strong decision from the business viewpoint?

2. How would the EUR/USD exchange rate require change in order for the 3DP owners to change their mind? What is the probability associated with such an fx movement?

Compute the answers and present them in a short power point presentation Regression

The following table presents the monthly data on sales volume (col 2) and promotional spending (col 3) of a company. Column (4) shows an index of economic activity in the local economy.
 

Answer the following problems:

1. What is the correlation between?

a. sales volume and the promotional spending?

b. sales volume and the economic activity index?

c. promotional spending and the economic activity index?

Given the sizes of correlation, do you believe there is a suitable case for running a regression? Logically, which variable would you consider as dependent?

2. By using excel (either reglinp or Analysis ToolPak), run the regression of sales volume (dependent variable) on a steady (intercept) and promotional spending. prepare explicitly the regression equation, setting out the estimated coefficients and the associated standard errors.

a. What is the interpretation of the coefficients?

b. How about their signs? Do they make intuitive sense?

c. Are they statistically significant?

d. What is the forecast sales volume assuming that the promotional spending amounts to EUR 150,000? What is the 95% confidence interval around this point forecast (hint: use formulas on p. 396 of the textbook).

3. Run another regression, this time adding index of economic activity as the second explanatory variable. What are the outcomes now? prepare explicitly the regression equation, setting out the estimated coefficients as well as the associated standard errors.

a. Has the quality of fit improved substantially?

b. Purely from statistical (not business) perspective, is there a strong case for adding the index of economic activity as one of the explanatory variables? Why?

Statistics and Probability, Statistics

  • Category:- Statistics and Probability
  • Reference No.:- M91052

Have any Question? 


Related Questions in Statistics and Probability

Assignmentstatistical analysisdirections be sure to save an

ASSIGNMENT Statistical Analysis Directions: Be sure to save an electronic copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure to us ...

1 a producer specifies that the mean lifetime of a certain

1. A producer specifies that the mean lifetime of a certain type of battery is at least 240 hours. A sample of 18 such batteries yielded the following data. 237             242             232 242             248         ...

A study wants to examine the relationship between student

A study wants to examine the relationship between student anxiety for an exam and the number of hours studied. The data is as follows: Student Anxiety Scores Study Hours 5 1 10 6 5 2 11 8 12 5 4 1 3 4 2 6 6 5 1 2 Why is ...

Research objectives to explore correlations between reward

Research Objectives To explore correlations between reward systems and team work attributes in the Saudi Arabian bank sector To explore relationships between reward systems and team work effectiveness in the Saudi Arabia ...

1 what are the most common causes of missing data and what

1. What are the most common causes of missing data, and what difficulties do missing data cause? What can be done if data are missing? 2. Comment on the circumstances under which a researcher would consider deleting one ...

1 compare and contrast the development of northern and

1) Compare and contrast the development of Northern and Southern Europe after the treaty of verdun (has to be a paragraph long, with 3 examples, and answer the following questions: when,who,where, why) 2) Discuss the Pro ...

Starting in 1998 a series of credit card usage studies have

Starting in 1998, a series of credit card usage studies have been performed by Sallie Mae, a major provider of educational loans and savings programs. In a recent pilot study, a random pool of 122 loan applicants attendi ...

A caterer is competing for a companys business the caterer

A caterer is competing for a company's business. The caterer randomly selects a past client and submits a tasting menu consisting of all the dishes prepared for the past client. What type of sample is this? A college fac ...

Romeo composes a letter to juliet and gives it to tybalt to

Romeo composes a letter to Juliet, and gives it to Tybalt to deliver to Juliet. While on the way, Tybalt peeks at the letter's contents. Tybalt gives Juliet the letter, and Juliet reads it immediately, in Tybalt's presen ...

1 can single-case experimental designs be used to test the

1. Can single-case experimental designs be used to test the effects of various levels of an independent variable (as in a one-way group design)? Explain. 2. How many levels of the independent variable are there in an ABA ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro