Question: The Vintage Restaurant, on Captiva Island near
The Vintage Restaurant, on Captiva Island near Fort Myers, Florida, is owned and operated by Karen Payne. The restaurant just completed its third year of operation. Since opening her restaurant, Karen has sought to establish a reputation for the Vintage as a high-quality dining establishment that specializes in fresh seafood. Through the efforts of Karen and her staff, her restaurant has become one of the best and fastest growing restaurants on the island. To better plan for future growth of the restaurant, Karen needs to develop a system that will enable her to forecast food and beverage sales by month for up to one year in advance. Table 17.25 shows the value of food and beverage sales ($1000s) for the first three years of operation. Managerial Report Perform an analysis of the sales data for the Vintage Restaurant. Prepare a report for Karen that summarizes your findings, forecasts, and recommendations. Include the following: 1. A time series plot. Comment on the underlying pattern in the time series. 2. An analysis of the seasonality of the data. Indicate the seasonal indexes for each month, and comment on the high and low seasonal sales months. Do the seasonal indexes make intuitive sense? Discuss. 3. Deseasonalize the time series. Does there appear to be any trend in the deseasonalized time series? 4. Using the time series decomposition method, forecast sales for January through December of the fourth year. 5. Using the dummy variable regression approach, forecast sales for January through December of the fourth year. 6. Provide summary tables of your calculations and any graphs in the appendix of your report. Table 17.25: 
Assume that January sales for the fourth year turn out to be $295,000. What was your forecast error? If this error is large, Karen may be puzzled about the difference between your forecast and the actual sales value. What can you do to resolve her uncertainty in the forecasting procedure?
> Suppose that you are responsible for making arrangements for a business convention and that you have been charged with choosing a city for the convention that has the least expensive hotel rooms. You have narrowed your choices to Atlanta and Houston. The
> USA Today reports that the average expenditure on Valentine’s Day is $100.89. Do male and female consumers differ in the amounts they spend? The average expenditure in a sample survey of 40 male consumers was $135.67, and the average expenditure in a sam
> Condé Nast Traveler conducts an annual survey in which readers rate their favorite cruise ship. All ships are rated on a 100-point scale, with higher values indicating better service. A sample of 37 ships that carry fewer than 500 passengers resulted in
> The range for a set of data is estimated to be 36. a. What is the planning value for the population standard deviation? b. At 95% confidence, how large a sample would provide a margin of error of 3? c. At 95% confidence, how large a sample would provide
> Carl Allen and Norm Nixon are two loan officers at Brea Federal Savings and Loan Bank. The bank manager is interested in comparing the default rate on the loans approved by Carl to the default rate on the loans approved by Norm. In the sample of loans co
> The Adecco Workplace Insights Survey sampled men and women workers and asked if they expected to get a raise or promotion this year. Suppose the survey sampled 200 men and 200 women. If 104 of the men replied Yes and 74 of the women replied Yes, are the
> Tourism is extremely important to the economy of Florida. Hotel occupancy is an often-reported measure of visitor volume and visitor activity (Orlando Sentinel, https://www.orlandosentinel.com/business/tourism/os-bz-hotel -occupancy-dip-20180522-story.ht
> Oil wells are expensive to drill, and dry wells are a great concern to oil exploration companies. The domestic oil and natural gas producer Aegis Oil, LLC describes on its website how improvements in technologies such as three-dimensional seismic imaging
> Minnesota had the highest turnout rate of any state for the 2016 presidential election (United States Election Project website). Political analysts wonder if turnout in rural Minnesota was higher than turnout in the urban areas of the state. A sample sho
> Researchers with Oceana, a group dedicated to preserving the ocean ecosystem, reported finding that 33% of fish sold in retail outlets, grocery stores, and sushi bars throughout the United States had been mislabeled (San Francisco Chronicle, https://www.
> Forbes reports that women trust recommendations from Pinterest more than recommendations from any other social network platfor (https://www.forbes.com/sites/marketshare/2012/03/20/why-brand-managers-need-to-take-an-interest-in-pinterest/#5e3b22fb6375). B
> A Businessweek/Harris poll asked senior executives at large corporations their opinions about the economic outlook for the future. One question was, “Do you think that there will be an increase in the number of full-time employees at your company over th
> Consider the following hypothesis test. H0: µ1 - µ2 = 0 Ha: µ1 - µ2 ≠ 0 The following results are for two independent samples taken from the two populations. Sample 1 …………………………………….. Sample 2 n1 = 80 ………………………………………….. n2 = 70 x̅1 = 104 ………………………………………
> Consider the hypothesis test H0: p1 - p2 ≤ 0 Ha: p1 - p2 > 0 The following results are for independent samples taken from the two populations. Sample 1 …………………………… Sample 2 n1 = 200 …………………………….. n2 = 300 p̅1 = .22 ……………………………….. p̅ 2 = .16 a. What is
> How large a sample should be selected to provide a 95% confidence interval with a margin of error of 10? Assume that the population standard deviation is 40. Applications
> Consider the following results for independent samples taken from two populations. Sample 1 …………………………………….. Sample 2 n1 = 400 ……………………………………. n2 = 300 p̅1 = .48 ……………………………………… p̅2 = .36 a. What is the point estimate of the difference between the two
> A personal fitness company produces both a deluxe and a standard model of a smoothie blender for home use. Selling prices obtained from a sample of retail outlets follow. a. The manufacturer’s suggested retail prices for the two model
> Scores in the first and fourth (final) rounds for a sample of 20 golfers who competed in PGA tournaments are shown in the following table. Suppose you would like to determine if the mean score for the first round of a PGA Tour event is significantly diff
> The College Board SAT college entrance exam consists of three parts: math, writing, and critical reading. Sample data showing the math and writing scores for a sample of 12 students who took the SAT follow. a. Use a .05 level of significance and test f
> The Global Business Travel Association reported the domestic airfare for business travel for the current year and the previous year. Below is a sample of 12 flights with their domestic airfares shown for both years. a. Formulate the hypotheses and test
> Bank of America’s Consumer Spending Survey collected data on annual credit card charges in seven different categories of expenditures: transportation, groceries, dining out, household expenses, home furnishings, apparel, and entertainment. Using data fro
> The price per share of stock for a sample of 25 companies was recorded at the beginning of the first financial quarter and then again at the end of the first financial quarter. How stocks perform during the first financial quarter is an indicator of what
> A market research firm used a sample of individuals to rate the purchase potential of a particular product before and after the individuals saw a new television commercial about the product. The purchase potential ratings were based on a 0 to 10 scale, w
> The following data are from matched samples taken from two populations. a. Compute the difference value for each element. b. Compute dÌ…. c. Compute the standard deviation sd. d. What is the point estimate of the difference between the two
> Consider the following hypothesis test. H0: µ1 - µ2 ≤ 0 Ha: µ1 - µ2 > 0 The following results are for two independent samples taken from the two populations. Sample 1 ………………………………... Sample 2 n1 = 40 …………………………………….. n2 = 50 x̅1 = 25.2 …………………………………. x̅
> Marvel Studio’s motion picture Guardians of the Galaxy opened over the first two days of the 2014 Labor Day weekend to a then record-breaking $94.3 million in ticket sales revenue in North America. The ticket sales revenue in dollars for a sample of 30 t
> Consider the following hypothesis test. H0: µd ≤ 0 Ha: µd > 0 The following data are from matched samples taken from two populations. a. Compute the difference value for each element. b. Compute dÌ
> The success of an airline depends heavily on its ability to provide a pleasant customer experience. One dimension of customer service on which airlines compete is on-time arrival. The file LateFlights contains a sample of data from delayed flights showin
> Periodically, Merrill Lynch customers are asked to evaluate Merrill Lynch financial consultants and services. Higher ratings on the client satisfaction survey indicate better service, with 7 the maximum service rating. Independent samples of service rati
> The College Board provided comparisons of Scholastic Aptitude Test (SAT) scores based on the highest level of education attained by the test taker’s parents. A research hypothesis was that students whose parents had attained a higher le
> Hotel room pricing changes over time (Lodging Magazine), but is there a difference between Europe hotel prices and U.S. hotel prices? The file IntHotels contains changes in the hotel prices for 47 major European cities and 53 major U.S. cities. a. On the
> The Tippie College of Business obtained the following results on the salaries of a recent graduating class: Finance Majors ……………………………………… Business Analytics Majors n1 = 110 …………………………………………………………………………… n2 = 30 x̅1 = $48,537 …………………………………………………………….. x
> The increasing annual cost (including tuition, room, board, books, and fees) to attend college has been widely discussed (http://time.com/money/4543839/college-costs-record-2016/). The following random samples show the annual cost of attending private an
> The U.S. Department of Transportation provides the number of miles that residents of the 75 largest metropolitan areas travel per day in a car. Suppose that for a simple random sample of 50 Buffalo residents the mean is 22.5 miles a day and the standard
> Consider the following data for two independent random samples taken from two normal populations. a. Compute the two sample means. b. Compute the two sample standard deviations. c. What is the point estimate of the difference between the two population
> Consider the following hypothesis test. H0: µ1 - µ2 = 0 Ha: µ1 - µ2 ≠ 0 The following results are from independent samples taken from two populations. Sample 1 ……………………………… Sample 2 n1 = 35 ………………………………….. n2 = 40 x̅1 = 13.6 ……………………………… x̅2 = 10.1 σ1 =
> Health insurers are beginning to offer telemedicine services online that replace the common office visit. Wellpoint provides a video service that allows subscribers to connect with a physician online and receive prescribed treatments (Bloomberg Businessw
> Find the t value(s) for each of the following cases. a. Upper tail area of .025 with 12 degrees of freedom b. Lower tail area of .05 with 50 degrees of freedom c. Upper tail area of .01 with 30 degrees of freedom d. Where 90% of the area falls between th
> In a study conducted by Zogby International for the Democrat and Chronicle, more than 700 New Yorkers were polled to determine whether the New York state government works. Respondents surveyed were asked questions involving pay cuts for state legislators
> Meticulous Drill & Reamer (MD&R) specializes in drilling and boring precise holes in hard metals (e.g., steel alloys, tungsten carbide, and titanium). The company recently contracted to drill holes with 3-centimeter diameters in large carbon-stee
> An Air Force introductory course in electronics uses a personalized system of instruction whereby each student views a videotaped lecture and then is given a programmed instruction text. The students work independently with the text until they have compl
> Par, Inc., is a major manufacturer of golf equipment. Management believes that Par’s market share could be increased with the introduction of a cut-resistant, longer-lasting golf ball. Therefore, the research group at Par has been inves
> During the global recession of 2008 and 2009, there were many accusations of unethical behavior by Wall Street executives, financial managers, and other corporate officers. At that time, an article appeared that suggested that part of the reason for such
> Quality Associates, Inc., a consulting firm, advises its clients about sampling and statistical procedures that can be used to control their manufacturing processes. In one particular application, a client gave Quality Associates a sample of 800 observat
> Metropolitan Research, Inc., a consumer research organization, conducts surveys designed to evaluate a wide variety of products and services available to consumers. In one particular study, Metropolitan looked at consumer satisfaction with the performanc
> Glenn Foreman, president of Oceanview Development Corporation, is considering submitting a bid to purchase property that will be sold by sealed-bid auction at a county tax foreclosure. Glenn’s initial judgment is to submit a bid of $5 m
> John Campbell, an employee of Manhattan Construction Company, claims to have injured his back as a result of a fall while repairing the roof at one of the Eastview apartment buildings. In a lawsuit asking for damages of $1,500,000, filed against Doug Rey
> RainOrShine.Com is an online provider of weather forecasts and information. The organization is putting together a weather-preparedness program to increase its audience’s understanding of severe weather. As part of this program, RainOrS
> The Carlson Department Store suffered heavy damage when a hurricane struck on August 31. The store was closed for four months (September through December), and Carlson is now involved in a dispute with its insurance company about the amount of lost sales
> Wine Spectator magazine contains articles and reviews on every aspect of the wine industry, including ratings of wine from around the world. In a recent issue they reviewed and scored 475 wines from the Piedmont region of Italy using a 100-point scale. T
> The Ladies Professional Golf Association (LPGA) maintains data on performance for members of the LPGA Tour. Scoring average is generally considered the most important statistic in term of a player’s success. To investigate the relationship between scorin
> When trying to decide what car to buy, real value is not necessarily determined by how much you spend on the initial purchase. Instead, cars that are reliable and don’t cost much to own often represent the best values. But no matter how
> Matt Kenseth won the 2012 Daytona 500, the most important race of the NASCAR season. His win was no surprise because for the 2011 season he finished fourth in the point standings with 2330 points, behind Tony Stewart (2403 points), Carl Edwards (2403 poi
> Consumer Research, Inc., is an independent agency that conducts research on consumer attitudes and behaviors for a variety of firms. In one study, a client asked for an investigation of consumer characteristics that can be used to predict the amount char
> Gulf Real Estate Properties, Inc., is a real estate firm located in southwest Florida. The company, which advertises itself as “expert in the real estate market,” monitors condominium sales by collecting data on location, list price, sale price, and numb
> Buckeye Creek Amusement Park is open from the beginning of May to the end of October. Buckeye Creek relies heavily on the sale of season passes. The sale of season passes brings in significant revenue prior to the park opening each season, and season pas
> When trying to decide what car to buy, real value is not necessarily determined by how much you spend on the initial purchase. Instead, cars that are reliable and don’t cost much to own often represent the best values. But, no matter ho
> Consumer Reports tested 166 different point-and-shoot digital cameras. Based upon factors such as the number of megapixels, weight (oz.), image quality, and ease of use, they developed an overall score for each camera tested. The overall score ranges fro
> As part of a study on transportation safety, the U.S. Department of Transportation collected data on the number of fatal accidents per 1000 licenses and the percentage of licensed drivers under the age of 21 in a sample of 42 cities. Data collected over
> One measure of the risk or volatility of an individual stock is the standard deviation of the total return (capital appreciation plus dividends) over several periods of time. Although the standard deviation is easy to compute, it does not take into accou
> TourisTopia Travel (Triple T) is an online travel agency that specializes in trips to exotic locations around the world for groups of ten or more travelers. Triple T’s marketing manager has been working on a major revision of the homepage of Triple T’s w
> Suppose that a local chapter of sales professionals in the greater San Francisco area conducted a survey of its membership to study the relationship, if any, between the years of experience and salary for individuals employed in inside and outside sales
> As part of a long-term study of individuals 65 years of age or older, sociologists and physicians at the Wentworth Medical Center in upstate New York investigated the relationship between geographic location and depression. A sample of 60 individuals, al
> Fresno Board Games manufactures and sells several different board games online and through department stores nationwide. Fresno’s most popular game, ¡Cabestrillo Cinco!, is played with 5 six-sided dice. Fresno has purchased dice for this game from Box C
> Six months ago, Fuentes Salty Snacks, Inc., added a new flavor to its line of potato chips. The new flavor, candied bacon, was introduced through a nationwide rollout supported by an extensive promotional campaign. Fuentes’ management is convinced that q
> Young Professional magazine was developed for a target audience of recent college graduates who are in their first 10 years in a business/professional career. In its two years of publication, the magazine has been fairly successful. Now the publisher is
> For a 60–40 D-E mix of investment capital, the maximum cost for debt capital that would yield a WACC of 10% when the cost of equity capital is 4% is closest to: (a) 8% (b) 12% (c) 14% (d) 16%
> All of the following are examples of debt capital, except: (a) Mortgage on equipment (b) Long-term bonds (c) Short-term loan from a bank (d) Preferred stock
> If benefits are $10,000 per year forever starting in year 1, and costs are $50,000 at time zero and $50,000 at the end of year 2, the B/C ratio at i = 10% per year is closest to: (a) 0.93 (b) 1.10 (c) 1.24 (d) 1.73
> All of the following cash flows should be classified as disbenefits, except: (a) Cost of fish from hatchery to stock lake at state park (b) Decrease in property values due to closure of a government research lab (c) School overcrowding because of militar
> If two mutually exclusive alternatives have B/C ratios of 1.5 and 1.4 for the lower first-cost and higher first-cost alternatives, respectively: (a) The B/C ratio on the increment between them is greater than 1.4 (b) The B/C ratio on the increment betwee
> From the PW, AW, and FW values shown, the conventional B/C ratio is closest to: (a) 1.27 (b) 1.33 (c) 1.54 (d) 2.76
> If two mutually exclusive alternatives have B/C ratios of 1.4 and 1.5 for the lower and higher cost alternatives, respectively: (a) The B/C ratio on the increment between them is equal to 1.5 (b) The B/C ratio on the increment between them is between 1.4
> All of the following are examples of unethical behavior, except: (a) Deception (b) Withholding information (c) Lying (d) Offering engineering services at a lower cost than a competitor
> In evaluating three mutually exclusive alternatives by the B/C method, the alternatives were ranked A, B, and C, respectively, in terms of increasing cost, and the following results were obtained for overall B/C ratios: 1.1, 0.9, and 1.3. On the basis of
> An alternative has the following cash flows: benefits = $50,000 per year; disbenefits = $27,000per year; costs = $25,000 per year. The B/C ratio is closest to: (a) 0.92 (b) 0.96 (c) 1.04 (d) 2.00
> The division manager would like to know how much the WACC varies for different D-E mixes, especially about 15% to 20% on either side of the 50% debt financing option in plan A. Plot the WACC curve and compare its shape with that of Figure 10–2.
> All of the following cash flows can be identified as benefits, except: (a) Longer tire life because of smooth pavement (b) $200,000 annual income to local businesses because of tourism created by water reservoir (c) Expenditure of $20 million for constru
> All of the following are primarily associated with public sector projects, except: (a) Low interest rates (b) Stocks (c) Benefits (d) Infinite life
> In a conventional B/C ratio: (a) Disbenefits and M&O costs are subtracted from benefits (b) Disbenefits are subtracted from benefits, and M&O costs are subtracted from costs (c) Disbenefits are subtracted from benefits, and M&O costs are added to costs (
> Ten noneconomic attributes are identified as A, B, C, ..., J. If they are rank-ordered in terms of decreasing importance with a value of 10 assigned to A, 9 to B, etc., the weighting of attribute B is closest to: (a) 0.24 (b) 0.17 (c) 0.08 (d) 0.04
> Alternative locations for an advanced wastewater recycling plant are being evaluated using four attributes identified as attributes 1, 2, 3, and 4 with weights of 0.4, 0.3, 0.2, and 0.1, respectively. If the value rating scale is from 1 to 10, and the ra
> Three attributes are first cost, safety, and environmental concerns. Assigned importance scores are 100, 75, and 50, respectively. The weight for environmental concerns is closest to: (a) 0.44 (b) 0.33 (c) 0.22 (d) 0.11
> All of the following are acceptable attribute identification approaches, except: (a) Employing small group discussions (b) Using the same attributes that competing entities use (c) Getting input from experts with relevant experience (d) Surveying the sta
> The importance values (0 to 100) for five attributes are shown below. The weight to assign to attribute 1 is: (a) 0.16 (b) 0.20 (c) 0.22 (d) 0.55 Attribute………………. Importance Score 1……………………………………… 55 2…………………………………….. 45 3…………………………………….. 85 4………………………
> Medzyme Pharmaceuticals has maintained a 50–50 D-E mix for capital investments. Equity capital has cost 11%; however, debt capital that has historically cost 9% is now 20% higher than that. If Medzyme does not want to exceed its historical weighted avera
> If the after-tax rate of return for a cash flow series is 11.2% and the corporate effective tax rate is 39%, the approximated before-tax rate of return is closest to: (a) 6.8% (b) 5.4% (c) 18.4% (d) 28.7%
> The engineer must make a recommendation on the financing plan by the end of the day. He does not know how to consider all the tax angles for the debt financing in plan A. However, he does have a handbook that gives these relations for equity and debt cap
> Gonzales, Inc. financed a new product as follows: $5 million in stock sales at 13.7% per year, $2 million in retained earnings at 8.9% per year, and $3 million through convertible bonds at 7.8% per year. The company’s WACC is closest to: (a) 9% per year
> All of the following are factors that affect the effective MARR of a project, except: (a) Project risk (b) Product selling price (c) Availability of capital (d) Attractiveness of other investment opportunities
> Of the following words, the one not related to ethics is: (a) Virtuous (b) Honest (c) Lucrative (d) Proper
> The statements contained in a code of ethics are variously known as all of the following, except: (a) Canons (b) Norms (c) Standards (d) Laws
> Cost-effectiveness analysis (CEA) differs from benefit/cost analysis (B/C) in that: (a) CEA cannot handle multiple alternatives (b) CEA compares alternatives on the basis of a specific outcome rather than solely on monetary units (c) CEA cannot handle in
> The estimated first cost of a permanent national monument is $2 million with annual benefits and disbenefits estimated at $360,000 and $42,000, respectively. The B/C ratio at 6% per year is closest to: (a) 0.16 (b) 0.88 (c) 1.73 (d) 2.65
> For the two independent projects shown, determine which, if any, should be funded at i = 10% per year using the B/C ratio method: (a) Fund neither (b) Fund X (c) Fund Y (d) Fund both X and Y
> A permanent flood-control dam is expected to have an initial cost of $2.8 million and an annual M&O cost of $20,000. In addition, minor reconstruction will be required every 5 years at a cost of $200,000. As a result of the dam, flood damage will be redu
> The first cost of grading and spreading gravel on a short rural road is expected to be $700,000. The road will have to be maintained at a cost of $25,000 per year. Even though the new road is not very smooth, it allows access to an area that previously c
> A milling machine with enhanced CNC controls that allow for high-speed machining of free-form parts was purchased 2 years ago for $195,000. The company wants to purchase a recently available faster model with control up to 8 axes for $240,000. The presen
> What values of MARR should the engineer use to determine the better financing plan?
> In a replacement study, the correct value to use when determining the purchase price of the challenger is: (a) Its first cost when it was purchased (b) Its first cost minus the trade-in value of the defender (c) Its first cost plus the trade-in value of
