A Firm Is Experiencing Theft Problems at Its Warehouse -Aone Percent Increase in the Level of Unemployment in the Consultant

question 23

Multiple Choice

A firm is experiencing theft problems at its warehouse. A consultant to the firm believes that the dollar loss from theft each week (T) depends on the number of security guards (G) and on the unemployment rate in the county where the warehouse is located (U measured as a percent) . In order to test this hypothesis, the consultant estimated the regression equation T = a + bG + cU and obtained the following results:
$$\begin{array} { c l l l l l } \text { DEPENDENT VARIAELE: } & \text { T } & \text { R-SQUARE } & \text { F-RATIO } & \text { P-VALUE ONF } \\\text { OESERVATIONS: } & 27 & \mathbf { 0 . 7 7 9 3 } & 42.38 & \mathbf { 0 . 0 0 0 1 } & \\& & \text { PARAMETER } & \text { STANDARD } & & \\\text { VARIAELE } & & \text { ESTMATE } & \text { ERROR } & \text { T-RATIO } & \text { P-VALUE } \\\text { INTERCEPT } & & 5150.43 & 1740.72 & \mathbf { 2 . 9 6 } & \mathbf { 0 . 0 0 6 8 } \\\text { G } & & - 480.92 & 130.65 & - \mathbf { 3 . 6 8 } & \mathbf { 0 . 0 0 1 2 } \\\text { U } & & 211.0 & 75.0 & \mathbf { 2 . 8 1 } & \mathbf { 0 . 0 0 9 5 }\end{array}$$
-Aone percent increase in the level of unemployment in the county results in an increase in losses due to theft of __________ more losses per week.

• A) $75
• B) $211
• C) $280
• D) $460

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Definitions:

Tax Law

Legislation and regulations governing how taxes are assessed, collected, and managed by governmental authorities.

Deductibility

The eligibility of an expense to be subtracted from gross income to reduce taxable income.

Pension Plans

Financial arrangements designed to provide individuals with an income during retirement, funded by either the employer, the employee, or both.

Income Tax Purposes

The specific calculations and methods used to determine taxable income and tax liabilities according to the regulations set by tax authorities.