The Correlation Coefficient Measures the Strength of a Linear Relationship

question 141

True/False

The correlation coefficient measures the strength of a linear relationship between two variables.

---

Definitions:

Accelerated Depreciation

A method of calculating the depreciation of an asset that assumes the asset will lose value more quickly in its initial years of use.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life evenly, resulting in equal depreciation expenses per year.

Fixed Asset Turnover Ratio

An efficiency ratio that measures a company's ability to generate net sales from its fixed-asset investments, such as property, plant, and equipment.

Asset Impairment Loss

A charge recognized when the carrying amount of an asset exceeds its recoverable amount, indicating the asset's value has declined.