Which of the Following Is True of the R-Squared (R2)

question 46

Multiple Choice

Which of the following is true of the R-squared (R2) value in Excel's Trendline function?

• A) A value of 1.0 for R2 indicates maximum deviation of the data from the line.
• B) If the value of R2 is above 1.0, the line will be at a perfect fit for the data.
• C) The value of R2 will always be between -1 and 1.
• D) As the value of R2 gets higher, the line will be a better fit for the data.

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Definitions:

Average Cost Method

An inventory costing method used to determine the cost of goods sold and ending inventory by averaging the costs of all items available for sale.

Schedule D Transactions

Refers to a tax form used in the U.S. to report capital gains and losses from the sale, exchange, or disposition of capital assets.

MACRS

Modified Accelerated Cost Recovery System, a method of depreciation in the U.S. for tax purposes, allowing faster recovery of investments in certain property through depreciation deductions.

Depreciable Real Property

Real estate eligible for depreciation for tax purposes, meaning its cost can be deducted over a period of time.