$$\text { Why is } s ^ { 2 } \text { the best point estimate of } \sigma ^ { 2 }$$

question 71

Essay

$$\text { Why is } s ^ { 2 } \text { the best point estimate of } \sigma ^ { 2 }$$ ?

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Definitions:

Depreciation

The allocation of the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.

Fixed Costs

Costs that do not change with the level of production or sales activities within a certain range or period of time, such as rent, salaries, and insurance.

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, indicating how much contributes to covering fixed costs and generating profit.

Variable Cost

Expenses that change in proportion to the volume of output or sales, including items like labor and materials.