Business Analytics (2nd Edition)
2nd Edition
ISBN: 9780321997821
Author: James R. Evans
Publisher: PEARSON
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Chapter 1, Problem 12PE
Return on investment (ROl) is computed in the folIowng manner: ROl is equal to turnover multiplied by earnings as a percent of sales. Turnover is sales divided by total investment. Total investment is current assets (inventories, accounts receivable, and cash) plus fixed assets. Earnings equal sales minus the cost ot sales. The cost of sales consists of variable production costs, selling expenses, freight and delivery, and administrative costs.
- Construct an influence diagram that relates these variables
- Define symbols and develop a mathematical model
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The following table shows the expenses and income for a local college student. Assume that amounts shown for salaries and wages are after taxes and that 1 month = 4 weeks.
Income
Expenses
Part-time Job: $1100/month
Rent: $550/month
Student Loans: $8400/year
Groceries: $50/week
Scholarship: $5700/year
Tuition and Fees: $7500/year
Health Insurance: $40/month
Entertainment: $40/week
Phone: $65/month
a) What is the student's monthly income?
b) What is the student's monthly expenses?
c) What is the student's net monthly cash flow?
Describe a revenue function for a business venture.
Swain Athletic Gear (SAG) operates six retail outlets in a large Midwest city. One is in the center of the city on Cornwall Street and the others are scattered around the perimeter of the city. Management at SAG is concerned about declining sales and profitability of the Cornwall store and believes that outlet has been a drag on profits in recent years. The most recent income statement for the Cornwall store follows.
SWAIN ATHLETIC GEAR
Cornwall Street Store Income Statement
For the Year Ending February 28
Sales revenue
$ 12,300,000
Costs
Cost of goods sold
$ 5,289,000
Advertising
1,421,000
Store administrative salaries
975,000
Sales commissions
1,056,000
Leases and utilities
2,100,000
Allocated corporate support
1,622,000
Total costs
$ 12,463,000
Net loss before tax benefit
$ (163,000)
Tax benefit at 25%
(40,750)
Net loss
$ (122,250)
The CFO at SAG has asked for your advice on closing the Cornwall Street store. If the Cornwall Street store is…
Chapter 1 Solutions
Business Analytics (2nd Edition)
Ch. 1 - Discuss how you might use business analytics in...Ch. 1 - A supermarket has been experiencing long lines...Ch. 1 - Suggest some metrics that a hotel might want to...Ch. 1 - Prob. 4PECh. 1 - Classify each of the data elements in the Sales...Ch. 1 - Identify each of the variables in the Excel file...Ch. 1 - Classify each of the varaibles in the Excel file...Ch. 1 - A survey handed out to individuals at a major...Ch. 1 - A bank developed a model for predicting the...Ch. 1 - Four key marketing decision variables are price...
Ch. 1 - Suppose that a manufacturer can produce a part for...Ch. 1 - Return on investment (ROl) is computed in the...Ch. 1 - Total marketing effort is a term used to describe...Ch. 1 - Automobiles have different fuel economies (mpg),...Ch. 1 - A manufacturer of mp3 players is preparing to set...Ch. 1 - The demand for airline travel is quite sensitive...
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