CASE 2 IT Industry: Checkered Growth ANS Q2 Trend projection method is a classical method of business forecasting.

. This method is essentially concerned with the study of movement of variable through time. The use of this method requires a long and reliable time series data. The trend projection method is used under the assumption that the factors responsible for the past trends in variables to be projected (e.g. sales and demand) will continue to play their part in future in the same manner and to the same extend as they did in the past in determining the magnitude and direction of the variable. There are three (3) techniques of trend projection based on time series data. 1. Graphical Method: - under this method, annual sales data is plotted on a graph paper and a line is drawn through the plotted points. Then a free hand line is so drawn that the total distance between the line and the point is minimum. Although this method is very simple and least expensive, the projections made through this method are not very reliable. The reason is that the extension of the trend line involves subjectivity and personal bias of the analysis. Sale Years /Trend Projection Fitting Trend Equation: Least square method: - Fitting trend equation is a formal technique of projecting the trend in demand. Under this method, a trend line (or curve) is fitted to the time series data with the aid of statistical techniques. The form of the trend equation that can be fitted to the time series data is determined either by plotting the sales data or by trying different forms of trend equations for the best fit.
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When plotted, a time series date may show various trends. The most common types of trend equation are 1) liner and 2) exponential trends

Linear Trend: - When a time series data reveals a rising trend in sales than a straight-line trend equation of the following form is fitted. (S = A + BT ; Where S = annual sales , T = Time (in year) , A & B are constant. The parameter b given the measure of annual increase in sale

3. Exponential trend:- When sales ( or any dependent variable) have increased over the past years at an increasing rate or at a constant percentage rate, than the appropriate trend equation to be used is an exponential trend equation of any of the following type ( Y = aebt , Or its semi logarithmic form -> Log y = = log a + bt; This form of trend equation is used when growth rate is constant.

Double log trend equation of equation

Y = aTB Or its double logarithmic form Log y = log a + b log t This form of trend equation is used when growth rate is increasing.

Limitation The first limitations of this method arise out of the assumption that the past rate of change in the dependent variable will persist in the future too. Therefore, the forecast based on this method may be considered to be reliable only for the period during which this assumption holds. Second, this method cannot be used for short-term estimates. Also it cannot be used where trend is cyclical with sharp turning points of trough and perks. Box Jenkins Method: - This method of forecasting is used only for short term predictions. Besides, this method is suitable for forecasting demand with only stationary time series sales data. Stationary time series data is one, which does not reveal long term trend. In other words, Box-Jenkins technique can be used only on those cases in which time-series analysis depicts monthly or seasonal variation recurring with some degree of regularity. 1. Ans to 3 Compute a 3 year moving average forecast for the years 1997-98 through 200304.

Weegy: The average daily balance method of calculating finance charges uses the average of your balance during the billing cycle. [ [ Your average daily is the sum of your balance on each day of the billing divided by the number of days in the billing cycle. Here is the calculation for the average daily balance method: average daily balance * APR * days in billing cycle / 365 *Calculating the Average Daily Balance Let?s say your APR is 12% and your billing cycle is 25 days long. You started the billing cycle with a balance of $100. On Day 4, you made a $100 purchase. On Day 20, a $25 payment was credited to your account. Your daily balance during the billing cycle was: Day 1 ? 3: $100 Day 4 ? 20: $200 ($100 purchase) Day 20 ? 25: $175 ($25 credit) To calculate your average daily balance you must total your balance from each day in the billing cycle and divide by the number of days in the cycle. (Day 1 Balance + Day 2 Balance + Day 3 Balance?) / number of days in billing cycle $4575 / 25 = $183 Calculating the Average Daily Balance Finance Charge Based on the details listed above, your finance charge using the average daily balance method would be: $183 * .12 * 25 / 365 = $1.50 If you continued making minimum payments and no additional charges on this account, you'd pay $18.00 in finance charges over the course of a year

CASE4 1.Is stock market a good example of perfect competition? Discuss. The stockarket is an example of perfect competition in that everyone has the same chances of ups and downs in a certain market. Laws also help to ensure it's perfect competition by makin insider trading illegal. In theory, a stock market is perfect competition. However, in reality, it is actually an example of very poor competition. Both in laws and in actual construction, stock markets heavily favor those able to purchase super-high-speed computers (and host them in the exchange itself), and also tend to restrict information to a advantaged few while denying it to the majority of users. The outcome is that a stock market actually is very imperfect competition, heavily favoring the established members of the exchange over the ordinary exchange trader. Answer 2 It isn't. As a technical term in Economics, "perfect competition" is the (ideal or theoretical) market structure characterised by a large number of price-taking producers with identical U-shaped cost curves (the minimum of the firm cost curve occurring at an output small in comparison with market demand), who face no barriers to entry, producing a uniform product and selling it to a large number of price-taking consumers, without collusion or pricediscrimination. The stock market is characterised by non-uniform commodities (shares in different companies) each with a monopoly supplier. If anything it's an example of monopolistic competition, not perfect competition. Weegy: It is not a level playing field. Just a few problems: People manipulate stock prices (especially low priced ones) by hyping them up or artificially inflating them while they take the other side (i.e. short the stock). Insider trading. [ Some people get the scoop on a stock and trade it before the general public gets the news. Front trading. A broker or specialist will see a big order coming in to either buy or sell. They then buy or sell from their account before executing the big order thus gaining profit that other people don't have a chance to get. 2.Identify the characteristics of perfect competition in the stock market setting.

3.Can you find some basic aspect of perfect competition which is essentially absent in stock market? When economists analyze the production decisions of a firm, they take into account the structure of the market in which the firm is operating. The structure of the market is determined by four different market characteristics: the number and size of the firms in the market, the ease with which firms may enter and exit the market, the degree to which firms' products are differentiated, and the amount of information available to both buyers and sellers regarding prices, product characteristics, and production techniques.

Four characteristics or conditions must be present for a perfectly competitive market structure to exist. First, there must be many firms in the market, none of which is large in terms of its sales. Second, firms should be able to enter and exit the market easily. Third, each firm in the market

produces and sells a nondifferentiated or homogeneous product. Fourth, all firms and consumers in the market have complete information about prices, product quality, and production techniques. Pricetaking behavior. A firm that is operating in a perfectly competitive market will be a pricetaker. A pricetaker cannot control the price of the good it sells; it simply takes the market price as given. The conditions that cause a market to be perfectly competitive also cause the firms in that market to be pricetakers. When there are many firms, all producing and selling the same product using the same inputs and technology, competition forces each firm to charge the same market price for its good. Because each firm in the market sells the same, homogeneous product, no single firm can increase the price that it charges above the price charged by the other firms in the market without losing business. It is also impossible for a single firm to affect the market price by changing the quantity of output it supplies because, by assumption, there are many firms and each firm is small in size.