TABLE 14-7
the Department Head of the Accounting $\text {SUMMARY OUTPUT}$

question 49

True/False

TABLE 14-7
The department head of the accounting department wanted to see if she could predict the GPA of students using the number of course units (credits) and total SAT scores of each. She takes a sample of students and generates the following Microsoft Excel output:
$\text {SUMMARY OUTPUT}$
$\begin{array}{ll}\hline \text { Regression Statistics } \\\hline \text { Multiple R }& 0.916 \\ \text { R Square} & 0.839 \\ \text { Adjusted R Square} & 0.732 \\ \text { Standard Error }& 0.24685 \\ \text { Observations} & 6 \\\hline\end{array}$

ANOVA
$\begin{array}{lccclc}\hline & \text {d f }& \text { SS }& \text { M S } & \text { F } & \text {Significance F } \\\hline \text { Regression} & 2 & 0.95219 & 0.47610 & 7.813 & 0.0646 \\ \text {Residual} & 3 & 0.18281 & 0.06094 & & \\ \text {Total} & 5 & 1.13500 & & & \\\hline\end{array}$

$\begin{array}{lrcrr}\hline & \text {Coefficients }& \text {Standard Error} & \text {t Stat } & \text { p -value} \\\hline \text { Intercept }& 4.593897 & 1.13374542 & 4.052 & 0.0271 \\ \text {Units }& -0.247270 & 0.06268485 & -3.945 & 0.0290 \\ \text {SAT Total }& 0.001443 & 0.00101241 & 1.425 & 0.2494 \\\hline\end{array}$

-Referring to Table 14-7, the department head wants to use a t test to test for the significance of the coefficient of X₁. At a level of significance of 0.05, the department head would decide that ?₁ ? 0.

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Definitions:

Fair Value

The estimated market value of an asset or liability, based on current conditions and mutually agreed upon by a buyer and seller.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on the income earned.