Exhibit 18

question 22

Multiple Choice

Exhibit 18.3.The following table shows the annual revenues (in millions of dollars) of a pharmaceutical company over the period 1990-2011. Excel scatterplot shown above indicates that the annual revenues have an increasing trend.Therefore,linear,exponential,quadratic and cubic models were used to fit the trend,and the following relevant information became available after applying linear regression. Refer to Exhibit 18.3.What is the revenue forecast for 2013 found by the trend regression equation with the best fit?

• A)About 2 billion and 512 million dollars
• B)About 2 billion and 95 million dollars
• C)About 2 billion and 248 million dollars
• D)About 2 billion and 290 million dollars

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Definitions:

Accounting Functions

The systematic process of recording, analyzing, summarizing, and reporting financial transactions of a business.

Agency Cost

Represents expenses arising from conflicts of interest between managers and shareholders within a corporation.

Corporate Jet

A private aircraft owned or leased by a corporation, used to transport company executives, employees, or clients.

Financing

The process of providing funds for business activities, making purchases, or investing, through various means such as loans, equity, or bonds.