Consider the Following to Answer the Question(s) Below

question 4

Multiple Choice

Consider the following to answer the question(s) below:
A small independent organic food store offers a variety of specialty coffees. To determine whether price has an impact on sales, the managers kept track of how many kilograms of each variety of coffee were sold last month. The data, scatterplot and summary statistics are shown below.

-Below is a plot showing residuals versus fitted values for the estimated regression equation relating monthly sales of coffee to price per kilogram. Based on this plot we can say

• A) The linearity condition is not satisfied.
• B) The linearity condition is reasonably satisfied.
• C) A slight thickening of the plot is definitely not evident.
• D) The correlation coefficient is close to one.
• E) Nothing related to regression analysis can be said based on this graph.

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Definitions:

Loss on Sale

The financial loss incurred when the selling price of an asset is less than its carrying amount on the books.

Patent Amortization

The systematic reduction of the recorded cost of a patent over its useful life to reflect its consumption or expiration.

Operating Section

The segment of a financial statement that details revenues and expenses directly related to the core business operations.

Net Income

Net Income, or net profit, is the total earnings of a company after subtracting all expenses, including taxes, interest, and operating expenses, from its total revenue.