I in the Linear Trend Equation, the Letter "B" Is

question 28

Multiple Choice

i. In the linear trend equation, the letter "b" is the average change in t for each change of one unit (either increase or decrease) in y.
ii. The least squares method of computing the equation for a straight line going through the data of interest gives the "best fitting" line.
iii. A straight-line trend equation is used to represent the time series when it is believed that the data is increasing (or decreasing) by equal amounts, on the average, from one period to another.

• A) (i), (ii) and (iii) are all correct statements
• B) (i) and (ii) are correct statements, but not (iii).
• C) (i) and (iii) are correct statements but not (ii).
• D) (ii) and (iii) are correct statements but not (i).
• E) All statements are false

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Definitions:

Double-declining-balance Method

An accelerated depreciation method that doubles the depreciation expense compared to the straight-line method.

Depreciation Expense

Systematically dividing the expense of a tangible asset over the period it remains useful.

Scrap Value

The estimated worth of an asset's materials when the asset is deemed no longer useful and is intended to be disposed of or recycled.

Straight-line Method

A method of calculating depreciation by evenly spreading the cost of an asset over its expected useful life.