Analysis of sales (the independent variable) to cash flows (the dependent variable) data for linear regression produces an intercept of -$124,666 and a slope of 0.1823. Which correctly explains the intercept value? If there were no sales in a given period, the firm would have net cash outflows of $124,666 that periodThe intercept of -$124,666 shows that sales and cash flows are negatively correlatedThe intercept of -$124,666 shows what sales will be when cash flows equal zeroThe break-even amount of sales for this organization is $124,666

The intercept is the estimated value of the dependant variable y when x=0.

Answered: Analysis of sales (the independent…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Analysis of sales (the independent variable) to cash flows (the dependent variable) data for linear regression produces an intercept of -$124,666 and a slope of 0.1823. Which correctly explains the intercept value?

If there were no sales in a given period, the firm would have net cash outflows of $124,666 that period
The intercept of -$124,666 shows that sales and cash flows are negatively correlated
The intercept of -$124,666 shows what sales will be when cash flows equal zero
The break-even amount of sales for this organization is $124,666

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