The Regression Line Must Pass Through the Origin

question 46

True/False

The regression line must pass through the origin.

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Definitions:

Discounted Payback

A capital budgeting method that calculates the time needed to recoup the initial investment in present value terms.

Compute

The process of using mathematical and logical operations to perform tasks and solve problems by a computer.

Average Accounting Return

The average accounting return is a financial ratio that represents the average annual accounting profit compared to the initial investment.

IRR

Internal Rate of Return, a financial metric used to estimate the profitability of potential investments by finding the interest rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.