Exhibit 18

question 21

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 a revenue forecast for 2012 found by the exponential trend equation?

• A)About 2 billion and 334 million dollars
• B)About 2 billion and 189 million dollars
• C)About 2 billion and 149 million dollars
• D)About 2 billion and 34 million dollars

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Definitions:

Preventive Maintenance

Scheduled maintenance activities aimed at preventing unexpected equipment failures and prolonging the life of the equipment.

Economic Value

The measure of the benefit provided by a good or service to an economic agent, often represented in terms of willingness to pay for it.

Service Hours

A measure of the amount of time spent providing services to customers, often used to allocate service department costs to producing departments.

Net Operating Income

An evaluation of a business's core operating income, omitting the effects of interest and tax expenses.