Management of MRC Enterprises Has Provided the Following Output from Excel^®

question 41

Multiple Choice

Management of MRC Enterprises has provided the following output from Excel^®: $\begin{array}{lr}\hline {\text { Statistics }} \\\hline \text { Multiple R } & 0.8939072 \\\text { R Square } & 0.7990702 \\\text { Adjusted R2 } & 0.7488377 \\\text { Standard Error } & 10744.516 \\\text { Observations } & 6 \\\hline\end{array}$

$\begin{array}{lrrrrr}\hline &&&&&\text { Signticance }\\\text { ANOVA }&df&SS&MS&F&F\\\hline \text { Regression } & 1 & 1836429 & 1836429 & 15.90745 & 0.0162864 \\\text { Residual } & 4 & 46177852 & 11544463 & & \\\text { Total } & 5 & 2298208 & & & \\\hline\end{array}$

$\begin{array}{lrrrrrrrr}\hline&&&&&&\text { Upper } & \text { Lower } & \text {upper } \\&\text { Coefficients}&\text { Std Error}&\text { t stat }&\text { P vlalue}&\text { Lower } 95 \%&95 \% & 95 \% & 95 \%\\\hline \text { Intercept } & 47757.05 & 34958.30 & 1.36611 & 0.24366 & -49302.764 & 144816.88 & 49302 . & 144816.8 \\\text { XVariable 1 } & 6.364 & 1.595798 & 3.98841 & 0.01628 & 1.9340590 & 10.795352 & 1.9340 & 10.79535 \\\hline\end{array}$ What is the estimated cost for a production level of 1,200 units?

• A)$1,730
• B)$55,394
• C)$7,636
• D)There is not enough information provided to determine the answer..

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Definitions:

Residual Income

The income that remains after deducting all required costs of capital from operating income.

Net Operating Income

This is the total profit of a company after operating expenses are subtracted from gross income but before income from investments, interest, and taxes are calculated.

Return On Investment

A measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments.

Investment Opportunity

An investment opportunity represents a situation where an individual or organization can invest capital with the expectation of achieving a return on the invested amount.