Research Methods for the Behavioral Sciences (MindTap Course List)
Research Methods for the Behavioral Sciences (MindTap Course List)
6th Edition
ISBN: 9781337613316
Author: Frederick J Gravetter, Lori-Ann B. Forzano
Publisher: Cengage Learning
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Chapter 14, Problem 6E
To determine

The concept of stability within a phase and its importance.

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Use the data to develop a regression equationthat could be used to predict the quantity of pork sold during future periods. Discuss how you can tell whether heteroscedasticity, autocorrelation, or multi-collinearity might be a problem.
We want to understand the relationship between sales growth rates (s) and project FCF growth rates (g). This is useful to think about, because in our spreadsheet models we often need an estimate of g but when we look for analyst forecasts, they often just apply to s. We consider a hypothetical firm in which there are Sales, COGS, Depreciation, Taxes, ONWC, and CAPEX occurring each year. You know that sales growth is constant and equals s. You further know that in any given year, COGS/Sales-c, the tax rate is p, the ratio of ONWC to Sales is n, and CAPEX-Depreciation, and Depreciation/Sales-d. s, c, p, n, and d are constants (i.e., fixed parameters that don't change over time). Perform an algebraic series of calculations. Start with FCF = (Sales - COGS - DA - Taxes - etc). Simplify the expression until it is in the form Sales. *((1-c-d)(1-p)-s/(1+s)*n).
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