A Company Is Considering Purchasing a Machine for $21,000

question 96

True/False

A company is considering purchasing a machine for $21,000. The machine will generate income from operations of $2,000; annual net cash flows from the machine will be $3,500. The payback period for the new machine is 10.5 years.

---

Definitions:

Slope

In the context of linear regression, the magnitude of change in the dependent variable for each unit change in the independent variable.

Residual

The difference between an observed value and the estimated value provided by a model.

Actual Value Of Y

The observed or measured outcome in a statistical analysis or experiment, representing a specific data point on the Y-axis.

Estimated Value Of Y

A predicted value of the dependent variable in a regression analysis based on specific values of the independent variables.