A Restriction in Using Linear Regression Is That It Assumes

question 41

True/False

A restriction in using linear regression is that it assumes that past data and future projections fall on or near a straight line.

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Definitions:

Straight-line Method

A technique for distributing the expense of a physical asset uniformly throughout its lifespan.

Salvage Value

An asset's remaining worth estimated at the conclusion of its life of use.

Book Value

Book value is the net value of a company's assets found on its balance sheet, and it is calculated by subtracting liabilities from the total value of assets.

Double-declining-balance

An accelerated method of depreciation which doubles the normal depreciation rate, reducing the asset's book value more quickly.