Exhibit 16

question 55

Short Answer

Exhibit 16.6.Thirty employed single individuals were randomly selected to examine the relationship between their age (Age)and their credit card debt (Debt)expressed as a percentage of their annual income.Three polynomial models were applied and the following table summarizes Excel's regression results. Refer to Exhibit 16.6.Using the quadratic regression equation,find the age of an employed single person with the highest predicted percentage debt.

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Definitions:

Price-earnings Ratio

A valuation metric for stocks, calculated by dividing the current market price of a stock by its earnings per share (EPS).

Debt-to-equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets, typically used to assess leverage and financial health.

Times Interest

A financial ratio, also known as interest coverage ratio, that measures a company's ability to meet its interest payments on outstanding debt.

Equity Multiplier

A financial leverage ratio that measures the proportion of a company's assets that are financed by stockholders' equity.