Beaconhouse National University

School of Business
KM Off Raiwind Road, Lahore 54400, Pakistan 13
Tel: +92-42-35324318 URL: www.bnu.edu.pk Email: info@bnu.edu.pk

Final Examination
Spring - 2022
--------------------------------------------------------------------------------------------------------------------------
Name of Student: ---------------------------------------------------- Total Marks: 130
Date: June 28, 2022 Time Allowed: 2 Hours
Program: BBA Semester: Spring, 2022
Course Title: Quantitative Techniques in Business
Course Instructor: Ijaz Hussain
Course Code: BBA 213
Instructions:
i. Attempt all questions. All equations, inequalities and output of E-views must be
saved in a separate word file save with your name. All output of the excel solver and
QM must be saved in a single excel file. The E-views, word and excel files must be
uploaded once you finish your exam.
ii. Understanding of the questions is part of the examination; therefore, no queries will
be entertained.
iii. Use of unfair means or communications through any means can disqualify you for
the examination.
iv. Borrowing or lending of items is not allowed during the examination

Page 1 of 4
 Beaconhouse National University
School of Business
KM Off Raiwind Road, Lahore 54400, Pakistan 13
Tel: +92-42-35324318 URL: www.bnu.edu.pk Email: info@bnu.edu.pk

Q. 1 [40 Marks]

Given the data of the following variables of selected listed companies from the non-
financial sector of Pakistan in the excel file available in the shared folder.

1. ROA stands for return on assets and represents profitability of the company

2. ATO denotes the asset turn over indicative of the efficiency

3. FL is for financial leverage

4. CR is current ratio and indicates liquidity of the company

Instruction

i. Import your data file in the form of a dated panel using company as cross section
ID and Year as Time ID. (2.5)
ii. Create and save a group named as Variables including the following variables:
ROA, ATO, FL, CR in E-views and copy paste your result in a world file created and
saved in your own name. (2.5)
iii. Open the group created in part ii. above and create and save descriptive stats of
your group and copy past your results in a world file created in ii. above. (5)
iv. Open the group created in part ii. above and create and save Correlation
Coefficients of your group and copy past your results in a world file created in ii.
above. (5)
v. Interpret the correlation coefficient of ROA with FL. (5)
vi. Run regression choosing ROA as dependent variable and ATO, FL, CR as
independent variables. Copy past your regression output in a world file created
in ii. above. (5)
vii. Based on your regression results, interpret the following aspects of your results:
a. Which of the independent variables have significant or insignificant impact on
the profitability (ROA) and why? Explain. (5)
b. Which of independent variables have positive or negative impact on the
profitability (ROA) and why? Explain. (5)
c. Confirm and explain whether the following hypothesis is correct. “Financial
leverage significant negative impact on profitability.” (5)

Page 2 of 4
 Beaconhouse National University
School of Business
KM Off Raiwind Road, Lahore 54400, Pakistan 13
Tel: +92-42-35324318 URL: www.bnu.edu.pk Email: info@bnu.edu.pk

Q. 2 [30 Marks]

Instructions:

Tabulate your transportation problem in Excel QM and determine the number of units
to be transported from each supply source to each destination and find the minimized
total transportation cost and save your solution. (30)

Q.3 [20 Marks]

Major League Corporation makes sports-related items at a plant in South Carolina. Before
the baseball season, the company was approached by representatives from the Sports
Connection, a company that supplies baseball items to be sold at major league parks and
at sports souvenir stores. The Sports Connection has offered to contract to buy 300,000
baseball hats for $3.00 each irrespective the events this year. The company’s production
capacity is 500,000 hats. The problem facing Major League is whether to accept this offer or
to attempt to independently sell all its baseball hats. If the demand for hats is high, the
company will be able to sell hats for much more than $3.00 each, but if demand is low, the
hats will have to be sold for much less than $3.00. At least two uncertainties exist that will
affect the demand for hats. First, if the league races are tight, the demand will be high as
much as 500,000 hats. Second with no League Race, demand will be reduced to as low as
300,000 hats. Under high demand conditions Major League Corporation can sell hats up to
its full capacity while under low demand condition Major League Corporation can only sell
300,000 hats. Using available information on injury levels and team-strength analysis, Major
League’s executives estimate a 60% probability that the league races will be tight. In
addition, the executives estimate the probability of a strike this year to be 30%. Assuming
the two events, tight races and a player strike, are independent, the following table shows
the possible selling prices for the company’s hats and the associated probabilities of the
events:

Page 3 of 4
 Beaconhouse National University
School of Business
KM Off Raiwind Road, Lahore 54400, Pakistan 13
Tel: +92-42-35324318 URL: www.bnu.edu.pk Email: info@bnu.edu.pk

Tight League Race No Tight League Race

& High Demand & Low Demand
(500,000 Hats ) (300,000 Hats )
Probabilities 0.6 0.4
Player Strike 0.3 4 2
No Player Strike 0.7 5 2.5

Instructions:

Should Major League Corporation accept the Sports Connection’s offer sell independently to
maximize its expected revenue?

Q.4 [20 Marks]

Given the following information and that the present annuity factor ¿ ] can be computed
using the following well known formula:

r = 12%

n = 1 year

1
1−[ ]
( 1+r )n
PVAF r , n=
r

Instructions:

Use the data table function under what if analysis if interest rate varies from 1% to 15% and
n varies from 1 to 10 years.

Q. 5 [20 Marks]

Tabulate the following problem in excel sheet including a formula for computing the target
level of output.

Output (Units) Q 2000

Unit Price ($/Unit) P 500
Unit Variable Cost ($/Unit) V 300
Unit Contribution Margin ($/Unit) UCM 200
Annual Fixed Cost ($) FC 200,000
Profit ($) PR 200,000
Instructions:

Using the goal seek, set profit =500,000 and find the target level of output to achieve the
given target profit of S 500,000.

Page 4 of 4