Regression Analysis Was Applied Between Sales (In $10,000) and Advertising

question 3

Multiple Choice

Regression analysis was applied between sales (in $10,000) and advertising (in $100) and the following regression function was obtained. = 50 + 8 X Based on the above estimated regression line if advertising is $1,000, then the point estimate for sales (in dollars) is

• A)$8,050
• B)$130
• C)$130,000
• D)$1,300,000

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Definitions:

Present Value

Present value is the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Comprehensive Income

An overall measure of all changes in equity from non-owner sources, capturing both realized and unrealized gains and losses.

Cost-Cutting Project

Initiatives or plans implemented by a business to reduce its expenses and increase efficiency, aiming to improve overall profitability.

Erosion

In finance, the gradual reduction of the value of an asset or earnings, often due to external factors or new projects cannibalizing existing project revenues.