In Order to Examine If There Is a Relationship Between $=-4877+0.245$

question 36

Multiple Choice

In order to examine if there is a relationship between the size of cash bonuses and
Pay scale, data were obtained on the average annual cash bonus and the average annual
Pay for a sample of 20 companies. Below is the regression analysis output with annual
Cash bonus as the dependent variable. What is the correlation between average annual
Cash bonus and average annual pay?
Regression Analysis: Cash Bonus versus Pay The regression equation is
Cash Bonus $=-4877+0.245$ Pay

$\begin{array}{lrrrr}\text { Predictor } & \text { Coef } & \text { SE Coef } & \text { T } & \text { P } \\ \text { Constant } & -4877 & 9106 & -0.54 & 0.599 \\ \text { Pay } & 0.2453 & 0.1079 & 2.27 & 0.036\end{array}$

$\mathrm{S}=13188.6 \quad \mathrm{R}-\mathrm{Sq}=22.3\%$

• A) -.223
• B) .472
• C) .108
• D) -.540
• E) Cannot be determined from the information given.

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Definitions:

Variable Costs

Expenses that change in proportion to the level of production or business activity, such as raw materials, labor, and energy costs.

EMV

Expected Monetary Value; a decision rule used in decision analysis where you multiply the value of each possible outcome by its probability of occurrence, summing all these products to get an overall measure.