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

question 146

Short Answer

TABLE 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:



-Referring to Table 13-11, what is the critical value for testing whether there is a linear relationship between revenue and the number of downloads at a 5% level of significance?

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Definitions:

Tax Loss Carryovers

Provisions that allow taxpayers to use a taxable loss in one period to offset taxable income in future periods.

Depreciation Tax Shield

The reduction in income tax expense realized from the ability to deduct depreciation expenses, thus lowering taxable income.

Marginal Tax Rates

The rate of tax applied to the next dollar of taxable income, which varies depending on income level and filing status in a progressive tax system.

Lease Payments

Regular payments made by a lessee to a lessor for the use of some asset.