SCENARIO 18-2 One of the Most Common Questions of Prospective House Buyers

question 86

Multiple Choice

SCENARIO 18-2
One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y) . To provide its customers with information on that matter, a large real estate firm used the following 4 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit ( X₁ ) , the amount of insulation in inches ( X ₂ ) , the number of windows in the house ( X₃ ) , and the age of the furnace in years ( X ₄ ) . Given below are the EXCEL outputs of two regression models.


-Referring to Scenario 18-1,which of the following values for the level of significance is the smallest for which the regression model as a whole is significant?

• A)0.0005
• B)0.001
• C)0.01
• D)0.05

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Definitions:

Incremental Revenues

Additional income received from a particular action or decision, beyond what would have been received without it.

Direct Material

Raw materials that are directly traceable and allocable to the production of goods or services.

Direct Labor

The cost of wages for workers who are directly involved in producing goods or providing services.

Overhead

Indirect costs not directly associated with the production of goods or services, such as administrative expenses and rent.