A Random Sample of Records of Electricity Usage of Homes $\hat{\text { usage }} = 1218 + 0.3$

question 5

Multiple Choice

A random sample of records of electricity usage of homes in the month of July gives the amount of electricity used and size (in square feet) of 135 homes.A regression was done to predict the amount of electricity used (in kilowatt-hours) from size.The residuals plot indicated that a linear model is appropriate.The model is $\hat{\text { usage }} = 1218 + 0.3$ size.What would a negative residual mean for people living in a house that is 2495 square feet?

• A)They are using more electricity than expected.
• B)Their house is bigger than expected.
• C)Their house is smaller than expected.
• D)They are using the least amount of electricity of all of the houses sampled.
• E)They are using less electricity than expected.

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Definitions:

Free Cash Flow

The amount of cash generated by a company after accounting for capital expenditures, indicating the liquidity available for expansion or dividend distribution.

Corporate Tax Rate

The percentage of a corporation's income that is seized by the government as tax.

Depreciation

The reduction in value of an asset over time, particularly in respect of wear and tear.

Expected Return

Expected return is the anticipated value or profit generated by an investment in the future, considering the potential risks and rewards.