If a Scattergraph Contains Points That Do Not Fall in a Perfect

question 21

Multiple Choice

If a scattergraph contains points that do not fall in a perfect line,

• A)the relationship between the variables is not good enough to warrant fitting a line to the data.
• B)this is an indication that there is no relationship whatsoever between the variables.
• C)the visual fit method and high-low methods should not be used,but least-squares regression can be used.
• D)a straight line can still be used to approximate the relationship if a general linear trend can be discerneD.The relationship need not be perfect to approximate a relationship.

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Definitions:

Average Sale Period

The average amount of time it takes for a company to convert its inventory into sales.

Operating Cycle

The duration of time it takes for a company to purchase inventory, sell the goods, and receive cash from sales.

Average Sale Period

The average time it takes for a company to convert its inventory into sales.

Times Interest Earned

An indicator of how well a business can fulfill its debt repayments by evaluating its earnings prior to interest and taxes against its interest expenditures.