Using the Regression Formula with a Slope = 1,000 and an Intercept

question 40

Multiple Choice

Using the regression formula with a slope = 1,000 and an intercept = 25,000,what would the predicted income be for someone who has 20 years of education?

• A)$40,000
• B)$42,000
• C)$45,000
• D)$47,000

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Definitions:

Acquisition Differential

The gap between what is paid to buy a company and the net worth of its recognizable assets and debts.

Equity Method

A financial recording method for logging investments in subsidiary entities where the investor has considerable sway but lacks complete dominance.

Goodwill

An intangible asset that arises when a company acquires another business for a price higher than the fair value of its identifiable net assets.

Equity Method

An accounting technique used when an investor holds significant influence but not full control over an investee, allowing the investor to record a proportionate share of the investee's profits or losses.