The Coefficient of Determination Is

question 30

Multiple Choice

The coefficient of determination is

• A)a measure of the variability of actual costs around the cost-estimating equation.
• B)used to construct probability intervals for cost estimates.
• C)a standardized measure of the degree to which two variables move together.
• D)a measure of the percent variation in the dependent variable that is explained by an independent variable.

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Definitions:

Time Value

The concept that money available today is worth more than the same amount in the future due to its potential earning capacity.

Profitability Index

A calculation used to assess the attractiveness of an investment, calculated as the present value of future cash flows divided by the initial investment.

Independent Project

A project that can be pursued without affecting the acceptance or funding of other projects, allowing for standalone consideration in decision-making.

Net Present Value

The contrast in the present value of money received and the present value of money spent over a designated duration, applied in capital budgeting to appraise the profitability of a potential investment.