Suppose That the Following Table Shows the Average Hourly Earnings

question 7

Multiple Choice

Suppose that the following table shows the average hourly earnings for full-time production workers in various industries for selected years. The linear regression equation for hourly earnings as a function of time is given by (where x is the number of years after 1970 and y is the average hourly wage) . What does this model predict for the average hourly earnings in 2024? Round your answer to two decimal places. ​

• A) $42.51
• B) $327.10
• C) $43.41
• D) $326.20
• E) $325.80

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Definitions:

Pro Forma Financial Statements

Financial statements that project the financial position of a company, based on certain assumptions and typically used for future planning.

Sales Forecast

A sales forecast is the process of estimating future sales. Accurate sales forecasts enable companies to make informed business decisions and predict short-term and long-term performance.

Financial Forecasting

The process of estimating or predicting how a business will perform in the future through its financial statements.

FA/Sales Ratio

The Fixed Asset to Sales Ratio compares a company's total amount of fixed assets to its sales revenue, indicating how efficiently the company uses its fixed assets to generate sales.