Refer to the Information Provided in Table 21

question 20

Multiple Choice

Refer to the information provided in Table 21.3 below to answer the questions that follow.
Table 21.3
The data in the table was used to estimate the following consumption function: C = 20 + 0.2Y.
-Refer to Table 21.3. The error for point F is equal to

• A) -3.
• B) -1.
• C) +1.
• D) +2.

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Definitions:

Average Accounting Return

A financial ratio indicating the average net income an asset is expected to generate compared to its average capital cost.

Redeeming Feature

A characteristic or option in a financial product that offers the possibility of benefitting the holder, such as the ability to convert bonds into stock.

Required Return

The minimum expected yield by investors for investing in a particular asset, considering its risk.

Independent Projects

Projects that are evaluated for investment purposes, where the acceptance of one project does not affect the decision to undertake another.