Which of the Following Is a Strength of the Regression

question 52

Multiple Choice

Which of the following is a strength of the regression method of cost estimation?

• A)The method provides a detailed expert analysis of the cost behavior in each account.
• B)The method is based on studies of what future costs should be rather than what past costs have been.
• C)The method requires that several relatively strict assumptions be satisfied.
• D)The method is relatively easy to use with computer and sophisticated calculators.

---

Definitions:

Net Income

The profit of a company after all expenses and taxes have been deducted from revenue.

Stockholders' Equity

The residual assets of a company that belong to the shareholders, calculated as the total assets minus total liabilities.

Total Asset Turnover Ratio

A financial ratio that measures a company's ability to generate sales from its assets by comparing net sales to average total assets.

Net Profit Margin Ratio

A financial metric that shows the percentage of a company's revenue that remains as profit after all operating expenses, interest, taxes, and preferred stock dividends have been deducted.