Exhibit 14-10

question 112

Multiple Choice

Exhibit 14-10.A sociologist examines the relationship between the poverty rate and several socioeconomic factors.For the 50 states and the District of Columbia (n = 51) ,he collects data on the poverty rate (y,in %) ,the percent of the population with at least a high school education (x₁) ,median income (x₂,in $1000s) ,and the mortality rate per 1,000 residents (x₃) .He estimates the following model: .The following table shows a portion of the regression results. Notes: Data obtained from the Statistical Abstract of the US for the year 2007. Refer to Exhibit 14-10.The coefficient of determination indicates that

• A)14% of the variation in the poverty rate is explained by the regression model.
• B)14% of the variation in the regression model is explained by the variation in the poverty rate.
• C)86% of the variation in the poverty rate is explained by the regression model.
• D)86% of the variation in the regression model is explained by the variation in the poverty rate.

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Definitions:

Accelerated Depreciation

A method of depreciation that allows for a higher expense deduction in the early years of an asset's life, decreasing its book value more quickly.

Goodwill

Goodwill is an intangible asset that arises when a company acquires another business for a price higher than the fair value of its net tangible assets, representing aspects such as brand reputation and customer loyalty.

Times Interest

A financial ratio that measures a company's ability to meet its interest payments based on current earnings. Often referred to as the interest coverage ratio.

Stock Market

A public market for the trading of company stock and derivatives at agreed upon prices.