Use the Following Information to Answer the Question

question 27

Multiple Choice

Use the following information to answer the question. Below is the scatterplot showing the association between raw material (in tons) put into an injection molding machine each day (x) , and the amount of scrap plastic (in tons) that is collected from the machine every 4 weeks (y) . The residual plot of the data is also shown along with a QQ plot of the residuals.

-Choose the statement that best describes whether the condition for normality of errors does or does not hold for the linear regression model.

• A)The residual plot shows no trend, therefore the normality condition is not satisfied.
• B)The residual plot does not display a fan shape, therefore the normality condition is satisfied.
• C)The QQ plot mostly follows a straight line, therefore the normality condition is satisfied.
• D)The residual plot shows no trend, therefore the normality condition is satisfied.

---

Definitions:

Residual Value

The approximated value of an asset at the conclusion of its period of utility.

Depreciation

Systematically dividing the cost of a tangible asset across the years it is expected to last.

Capital Expenditures

Money invested by an enterprise to procure, upgrade, and preserve solid assets, such as premises, industrial structures, or equipment.

Fixed Asset Turnover Ratio

A financial metric that measures a company's ability to generate net sales from fixed assets like property, plant, and equipment.