Using the Following Information: What Is the Correlation

question 58

Multiple Choice

Using the following information: What is the correlation coefficient?

• A) 0.81
• B) 0.958
• C) - 0.958
• D) 0.9004

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Definitions:

After-Tax Salvage Value

The net value of a disposed asset after accounting for taxes on its sale.

Tax Rate

The fraction of earnings taxed from a person or a company.

CCA Class

Refers to categories in the Capital Cost Allowance system where assets are grouped according to their nature and function for tax depreciation purposes in Canada.

Annual Depreciation Tax Shield

This represents the tax savings a company achieves due to depreciation expense, calculated as the depreciation times the tax rate.