SCENARIO 13-11 A Computer Software Developer Would Like to Use the Number

question 28

True/False

SCENARIO 13-11
A computer software developer would like to use the number of downloads (in thousands)for the trial
version of his new shareware to predict the amount of revenue (in thousands of dollars)he can make
on the full version of the new shareware.Following is the output from a simple linear regression
along with the residual plot and normal probability plot obtained from a data set of 30 different
sharewares that he has developed:
Simple Linear Regression 13-43
-True or False: Referring to Scenario 13-11, the normality of error assumption appears to have
been violated.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds.

Tax Rate

The proportion of income or profits taken as tax by the government from an individual or company.

Straight-Line Depreciation

A blueprint for allocating the expense of a solid asset across its useful life in even yearly installments.

Net Working Capital

The discrepancy between what a company owns as current assets versus what it owes as current liabilities, a measure of its short-term financial condition.