TABLE 17-7 As a Project for His Business Statistics Class,a Student Examined

question 197

Multiple Choice

TABLE 17-7
As a project for his business statistics class,a student examined the factors that determined parking meter rates throughout the campus area.Data were collected for the price per hour of parking,blocks to the quadrangle,and one of the three jurisdictions: on campus,in downtown and off campus,or outside of downtown and off campus.The population regression model hypothesized is
Y_i = α + β₁X_1i + β₂X_2i + β₃X_3i + ε
where
Y is the meter price
X₁ is the number of blocks to the quad
X₂ is a dummy variable that takes the value 1 if the meter is located in downtown and off campus and the value 0 otherwise
X₃ is a dummy variable that takes the value 1 if the meter is located outside of downtown and off campus,and the value 0 otherwise
The following Excel results are obtained.
-Referring to Table 17-7,predict the meter rate per hour if one parks outside of downtown and off campus 3 blocks from the quad.

• A)-$0.0139
• B)$0.2589
• C)$0.2604
• D)$0.4981

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Definitions:

Originating Temporary Difference

A difference that arises in a particular period between the book income and taxable income, which is expected to reverse in the future.

Municipal Bonds

Debt securities issued by municipalities or local governments to finance public projects, typically offering tax-exempt interest payments to investors.

Permanent Difference

Refers to the discrepancy between book income and tax income that arises from certain items being recognized in either financial accounting or tax accounting, but not in both, leading to a difference that does not reverse over time.

Interperiod Tax Allocation

A method used in accounting to distribute income taxes over different periods due to temporary timing differences between when items are recognized for financial reporting and tax purposes.