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Exhibit 14-7.Assume you ran a multiple regression to gain a better understanding of the relationship between lumber sales,housing starts,and commercial construction.The regression uses lumber sales (in $100,000s) as the response variable with housing starts (in 1000s) and commercial construction (in 1000s) as the explanatory variables.The results of the regression are: Refer to Exhibit 14-7.If housing starts were 17,000 and commercial construction was 3,200,the best estimate of lumber sales would be:
Compounded Monthly
Refers to the process where the interest earned is added to the principal sum each month, and future interest is calculated on the new total.
Sinking Fund
A reserve fund established by setting aside revenue over a period of time to fund a future capital expense or repayment of a long-term debt.
New Roof
The process or cost associated with replacing an old roof with a new one, either for repair or upgrade purposes.
Compounded Annually
Interest calculated on the initial principal and the interest accumulated over the previous periods once every year.
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