Jayson Company Used Regression Analysis to Predict the Annual Cost

question 73

Multiple Choice

Jayson Company used regression analysis to predict the annual cost of indirect materials.The results were as follows:
$\begin{array}{ll}&\text { Indirect Materials Cost }\\&\text { Explained by Units Produced }\\\text { Constant } & 14,885 \\\text { Standard error of } Y \text { estimate } & 0.90 \\\text { R-Squared } & 0.60 \\\text { No. of observations } & 22 \\\text { Degrees of freedom } & 20 \\\text { X Coefficient } & 0.70 \\\text { Standard error of coefficient } & 2.1876\end{array}$
The coefficient of determination is ________.

• A) 0.60
• B) 0.70
• C) 0.90
• D) 1.10

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Definitions:

Free Cash Flow

The amount of cash a company generates after accounting for capital expenditures needed to maintain or expand the asset base.

Net Income

The total profit or loss of a company after all expenses, including taxes and interest, have been subtracted from revenue.

Cash Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits in the form of cash.

Net Cash

The difference between a company's total cash inflows and outflows within a period.