Thane Company Is Interested in Establishing the Relationship Between Electricity

question 92

Multiple Choice

Thane Company is interested in establishing the relationship between electricity costs and machine hours.Data have been collected and a regression analysis prepared using Excel.The monthly data and the regression output follow: $$\begin{array} { | l | r | r | } \hline \text { Month } & \text { Machine Hours } & \text { Electricity Costs } \\\hline \text { January } & 2,500 & 18,400 \\\hline \text { February } & 2,900 & 21,000 \\\hline \text { March } & 1,900 & 13,500 \\\hline \text { April } & 3,100 & 23,000 \\\hline \text { May } & 3,800 & 28,250 \\\hline \text { June } & 3,300 & 22,000 \\\hline \text { Juby } & 4,100 & 24,750 \\\hline \text { August } & 3,500 & 22,750 \\\hline \text { September } & 2,000 & 15,500 \\\hline \text { October } & 3,700 & 26,000 \\\hline \text { November } & 4,700 & 31,000 \\\hline \text { December } & 4,200 & 27,750 \\\hline\end{array}$$

The correlation coefficient for the regression equation for electricity costs is:

• A) 0.965.
• B) 0.932.
• C) 0.925.
• D) 0.982.

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Definitions:

Profits

The financial gain obtained when the revenues generated from business activities exceed the expenses, taxes, and costs associated with sustaining the business.

Dividend Growth Model

A valuation method used to estimate the value of a stock by using predicted dividends and the growth rate of those dividends.

Capital Gains

The profit realized from the sale of assets like stocks, bonds, or real estate when the sale price exceeds the purchase price.

Dividend Yield

The annual dividends a firm distributes, expressed as a ratio of its current stock price.