The Following Computer Printout Estimated Overhead Costs Using Linear Regression

question 92

Multiple Choice

The following computer printout estimated overhead costs using linear regression: Table of Selected Values: t Distribution
$\begin{array}{cccc} \text { Degrees of Freedom } & 90 \% & 95 \% & 99 \% \\\hline 15 & 1.753 & 2.131 & 2.947 \\ 16 & 1.746 & 2.120 & 2.921 \\ 17 & 1.740 & 2.110 & 2.898 \\18 & 1.734 & 2.101 & 2.878 \\19 & 1.729 & 2.093 & 2.861 \\\end{array}$ What is the interval around Y if 95 percent confidence is desired?

• A)Y ± 20.024
• B)Y ± 43.87759
• C)Y ± 52.8133
• D)Y ± 53.33893

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Definitions:

WACC

stands for Weighted Average Cost of Capital, which is a calculation of a firm's capital cost from all sources, including equity and debt, weighted accordingly.

Capital Asset Pricing Model

A model used to determine the theoretical rate of return of an asset, considering risk and the time value of money.

Cost of Equity

The return a firm theoretically pays to its equity investors, i.e., shareholders, to compensate for the risk they undertook by investing their capital.

WACC

Weighted Average Cost of Capital, a calculation that reflects the cost of a company to finance its assets through a mix of equity and debt.