The Association of Business Executives QCF

Introduction to Quantitative Methods

Thursday 6 June 2013, Morning
1. Time allowed: 3 hours.

2.  Read the instructions at the top of each section carefully. The number of questions you have to answer is marked clearly at the top of each section. Do not answer more questions than instructed. 3.  The number of marks per question may vary. Marks for subdivisions of questions and the total marks for each question are shown in brackets after the question. 4.  No books, dictionaries, notes or any other written materials are allowed in this examination. 5.  Calculators, including scientic calculators, are allowed providing they are not programmable and cannot store or recall information. Electronic dictionaries and personal organisers are NOT allowed. All workings must be shown. 6.  Formulae and a table of standard normal distribution are printed on pages 8 to 11 for the assistance of candidates. Their use is not compulsory. Graph paper is provided at the front of the answer booklet. Note: 1 = 100p. 7.  Candidates who break ABE Examination Regulations, or commit any misconduct, will be disqualied from the examinations. 8. Question papers must not be removed from the Examination Hall.

STRUCTURE OF PAPER: Answer BOTH sections SECTION A: Answer ALL EIGHT questions Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Either Q9 or Q10 10 marks 10 marks 10 marks 10 marks 12 marks 12 marks 12 marks 12 marks 12 marks 100 marks

SECTION B: Answer ONE question

Total marKs aVailable for the paper

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ABE 2013

D/600/0603

This paper consists of TWO SECTIONS. Follow the instructions at the top of EACH section. SECTION A You must answer ALL EIGHT questions in this section. Questions do not carry equal marks. The mark allocation is shown after each question. Section A is worth 88% of the total marks available for the paper.

Q1 (a)  Without the use of a calculator, nd the value of the following, showing all steps in your calculations: (i) (ii) (b) 1 3 4  8 4 (25) 3 (24)  6 2 (24) (2 marks) (2 marks)

Use a calculator to nd the value, correct to 2 decimal places, of: (2 marks) (2 marks) (2 marks) (Total 10 marks)

(i) e0.7 (ii) log128 (iii) ln 9.1

Q2 (a)  A paint manufacturing company produces 522.45 litres of paint per day. Express this volume: (i) (ii) In standard form A 3 10n, where 1A10 and n is an integer Correct to 2 signicant gures (2 marks) (2 marks) (2 marks)

(iii) Correct to 1 decimal place

(b) Over the last decade, the world price of wheat has risen by approximately 150%.  Express this percentage rise as a: (i) Decimal  (ii) Fraction in its simplest form (2 marks) (2 marks) (Total 10 marks)

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Q3 (a)  A taxi rm buys a new car for one of its drivers, costing 15,680. It loses 15% of its value immediately and 10% each year. Calculate the value of the car after 3 years. (Give your answer to the nearest .) (5 marks) (b) A UK businessman is visiting the US to meet a client. The cost of staying at a New  York hotel while in the US is US$280 per night, plus a 5% sales tax. The current exchange rate is US$1.6 to 1. Calculate the total cost of staying at the New York hotel in . (Give your answer to the nearest .) (5 marks)  (Total 10 marks)

Q4 (a)  Simplify the following logarithm expression to a single log term: log (x29) 1 log (x).  (5 marks)  (b)  Determine the equation of the straight line which passes through the points (2,4) and (22,2). (5 marks) (Total 10 marks)

Q5 (a) Given that a 5 2, b 5 (22) and c 5 8, calculate the value of (b) Solve 5x 1 19 5 61 2x

a 2 3b  3c 1 4a

(4 marks) (4 marks)

(c) Solve x2 2 7x 1 10 5 0 using factorisation

(4 marks) (Total 12 marks)

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Q6  The following table shows the sales revenue of a retail company against its expenditure on advertising over a given period. Advertising Expenditure (000) 18 20 20 22 24 24 28 32 13 8 5 Sales Revenue (000) 165 197 206 210 220 222 223 231 94 68 54

(a) Use this data to draw a fully labelled scatter diagram of advertising expenditure against  sales revenue, where advertising expenditure is the independent variable and sales revenue is the dependent variable. (8 marks)  (b)  Use your scatter diagram to comment on the possible relationship between advertising expenditure and sales revenue. (4 marks) (Total 12 marks)

Q7 (a)  Classify the following data compiled by a car manufacturing company as either continuous or discrete:  (i) (ii) The number of cars sold in the rst 3 months of 2013 The time taken to produce each car (3 marks)

(iii) The weight of each car

(b)  Classify the following data compiled by a car manufacturing company as either qualitative or quantitative: (i) (ii) The colour of each car produced The cost of each car produced

(iii) The prot made on each car produced  (3 marks)

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(c)  The following stem and leaf diagram shows the ages, in years, of the employees of a mobile phone shop: Stem and leaf diagram of the ages of a mobile phone shops employees 2 3 4 5 6 3 4 6 9 1 2 3 7 8 3 3 6 7

3 2 represents 32 years old Required: Using the stem and leaf diagram determine each of the following: (i) Age of the youngest employee

(ii) Median age (iii) Modal age  (3 marks)

(d)  The following stem and leaf diagram shows the ages, in years, of the employees of an accounting rm: Stem and leaf diagram of the ages of an accounting firms employees 2 3 4 5 6 8 2 4 9 2 6 6 7 9 3 4 7 3

3 2 represents 32 years old Required: (i)  Use this stem and leaf diagram to compare how the ages of employees at the accounting rm differ from the ages of those employees at the mobile phone shop in (c). (ii) Comment on the distribution of the age data in both stem and leaf diagrams. (3 marks) (Total 12 marks)

 

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Q8 T  he following data shows the number of weekly sales made by a shoe retailer over a 6 week period in 2012. 13110498127102134 (a) Using this sales data, calculate the: (i) (ii) Mean number of shoes sold in a week over the period Standard deviation of the weekly shoe sales over the period  (2 marks) (4 marks) (2 marks)

(iii) Range of the data on weekly shoe sales over the period 

(b)  In the same 6 week period in 2013, the shoe retailer calculated that the mean number of shoes sold per week was 120, with a standard deviation of 12.2. (i)  Calculate how many more shoes were sold in the 6 week period in 2013 compared to the same period in 2012. (2 marks) (ii)  Comment on the level of dispersion of weekly shoe sales in the 6 week period in 2013 compared to the same period in 2012. (2 marks) (Total 12 marks)

END OF SECTION A MAXIMUM MARKS FOR SECTION A: 88

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SECTION B You must answer ONE question in this section. DO NOT answer BOTH Q9 AND Q10. Each question carries 12 marks. Section B is worth 12% of the total marks available for the paper. EITHER: Q9 (a)  If the two possible outcomes of a promotional strategy are prots of 1,000 and 25,000 with probabilities of 0.6 and 0.4 respectively, calculate the expected prot.  (4 marks) (b)  The weight of a bag of sugar is found to be normally distributed with a mean of 1000grams and a standard deviation of 12 grams.  OR: Q10 (a)  For each of the following events, classify whether all the possible outcomes are equally likely or not equally likely:  (i) (ii) Rolling a six-sided dice Selecting students based on hair colour (3 marks) (i)  Calculate the probability that a randomly selected bag of sugar weighs less than 985 grams. (4 marks) (ii)  If 100 bags of sugar were selected at random, calculate how many would weigh less than 985 grams. (Give your answer rounded up to the nearest whole bag of sugar.) (4 marks) (Total 12 marks)

(iii) Tossing a coin

(b)  A box contains 3 red balls and 7 blue balls. A ball is selected at random and its colour noted before being put back in the box. A second ball is then randomly selected from the box of 10 balls and its colour noted. (i)  Given this information, draw a tree diagram to show the probabilities of the four possible outcomes of selecting two balls randomly. (6 marks) (ii)  Using your tree diagram or otherwise, calculate the probability that the two balls selected are different in colour. (3 marks) (Total 12 marks) END OF SECTION B MAXIMUM MARKS FOR SECTION B: 12

TOTAL MAXIMUM MARKS: 100 END OF QUESTION PAPER

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INTRODUCTION TO QUANTITATIVE METHODS FORMULAE FOR BUSINESS MATHEMATICS AND STATISTICS INTEREST The formula for calculating compound interest: r A = P 1 + 100
n

where: A = Accrued amount P = Original principal r = Rate of interest (for a particular time period, usually annual) n = Number of time periods. DEPRECIATION

Straight-line method:

Cost of asset Annual depreciation = Useful life

(Cost of asset) (Value at end of useful life) or Annual depreciation = Useful life

Reducing balance method: D = B (1 i ) n where: D = Depreciated value at the end of the n th time period B = Original value at beginning of time period i = Depreciation rate (as a proportion) n = Number of time periods (normally years)

STRAIGHT LINE A linear function is one for which, when the relationship is plotted on a graph, a straight line is obtained. The expression of a linear function, and hence the formula of a straight line, takes the following form: y = mx + c Note that: c = the y intercept (the point where the line crosses the y axis) m = the gradient (or slope) of the line

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QUADRATIC EQUATION A quadratic equation of the form ax 2 + bx + c = 0 can be solved using the following formula: x= b b 2 4ac 2a

RULES FOR LOGARITHMS 1. log(p q) = log p + log q 2. p log = log p log q q

3. log pn = n log p 4. If y = axn then n = (log y log a) log x PROBABILITY

Probability rules: Probability limits: Total probability rule: For complementary events: For two mutually exclusive events: For independent events: Multiplication rules: For independent events: For dependent events: Additional rules: For mutually exclusive events: For non-mutually exclusive events: Conditional rules: P(A and B) P(A | B) = P(B) P(A and B) and P(B | A) = P(A) P(A or B) = P(A) + P(B) P(A or B) = P(A) + P(B) P(A and B) P(A and B) = P(A) P(B) P(A and B) = P(A) P(B|A) 0 P(A) 1 P(A) + P(A ) = 1 P(A and B) = 0 P(A) = P(A | B) and/or P(B) = P(B | A)

P = 1 (for all outcomes)

Expected value of variables x with associated probabilities P(x) is E(x) = xP(x)

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STATISTICAL MEASURES

Mean for ungrouped data:

x= x n

Mean for grouped data:

x= fx n

or

x=

f x f

Standard deviation for ungrouped data: = (x x ) 2 = n x 2 x2 = n x 2 x 2 n n

Standard deviation for grouped data: =

2 2 fx ) f ( x x ) 1 ( 2 = fx f n n

where: n = f

Pearsons measure of skewness: Psk = Mean Mode 3(Mean Median) or Standard deviation Standard deviation

Coefcient of variation: Standard deviation 100 Mean 1

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STANDARD NORMAL DISTRIBUTION The table of values of the standard normal distribution set out below provides a means of determining the probability of an observation (x ) lying within specified standard deviations () of the mean of the distribution ( ).

AREAS IN TAIL OF THE STANDARD NORMAL DISTRIBUTION

(x ) - .00 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3.0 .5000 .4602 .4207 .3821 .3446 .3085 .2743 .2420 .2119 .1841 .1587 .1357 .1151 .0968 .0808 .0668 .0548 .0446 .0359 .0287 .02275 .01786 .01390 .01072 .00820 .00621 .00466 .00347 .00256 .00187 .00135

.01 .4960 .4562 .4168 .3783 .3409 .3050 .2709 .2389 .2090 .1814 .1562 .1335 .1131 .0951 .0793 .0655 .0537 .0436 .0351 .0281 .02222 .01743 .01355 .01044 .00798 .00604 .00453 .00336 .00248 .00181

.02 .4920 .4522 .4129 .3745 .3372 .3015 .2676 .2358 .2061 .1788 .1539 .1314 .1112 .0934 .0778 .0643 .0526 .0427 .0344 .0274 .02169 .01700 .01321 .01017 .00776 .00587 .00440 .00326 .00240 .00175

.03 .4880 .4483 .4090 .3707 .3336 .2981 .2643 .2327 .2033 .1762 .1515 .1292 .1093 .0918 .0764 .0630 .0516 .0418 .0336 .0268 .02118 .01659 .01287 .00990 .00755 .00570 .00427 .00317 .00233 .00169

.04 .4840 .4443 .4052 .3669 .3300 .2946 .2611 .2296 .2005 .1736 .1492 .1271 .1075 .0901 .0749 .0618 .0505 .0409 .0329 .0262 .02068 .01618 .01255 .00964 .00734 .00554 .00415 .00307 .00226 .00164

.05 .4801 .4404 .4013 .3632 .3264 .2912 .2578 .2266 .1977 .1711 .1469 .1251 .1056 .0885 .0735 .0606 .0495 .0401 .0322 .0256 .02018 .01578 .01222 .00939 .00714 .00539 .00402 .00298 .00219 .00159

.06 .4761 .4364 .3874 .3594 .3228 .2877 .2546 .2236 .1949 .1685 .1446 .1230 .1038 .0869 .0721 .0594 .0485 .0392 .0314 .0250 .01970 .01539 .01191 .00914 .00695 .00523 .00391 .00289 .00212 .00154

.07 .4721 .4325 .3936 .3557 .3192 .2843 .2514 .2206 .1922 .1660 .1423 .1210 .1020 .0853 .0708 .0582 .0475 .0384 .0307 .0244 .01923 .01500 .01160 .00889 .00676 .00508 .00379 .00280 .00205 .00149

.08 .4681 .4286 .3897 .3520 .3156 .2810 .2483 .2177 .1894 .1635 .1401 .1190 .1003 .0838 .0694 .0571 .0465 .0375 .0301 .0239 .01876 .01463 .01130 .00866 .00657 .00494 .00368 .00272 .00199 .00144

.09 .4641 .4247 .3859 .3483 .3121 .2776 .2451 .2148 .1867 .1611 .1379 .1170 .0985 .0823 .0681 .0559 .0455 .0367 .0294 .0233 .01831 .01426 .01101 .00842 .00639 .00480 .00357 .00264 .00193 .00139

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