Data given below are on the adjusted gross income and the amount of itemized deductions taken by taxpayers. Data were reported in thousands of dollars. With the estimated regression equation ŷ = 4.68 +0.16x, the point estimate of a reasonable level of total itemized deductions for a taxpayer with an adjusted gross income of $52,500 is $13,080. Click on the datafile to reference the data. Excel File: data14-37.xlsx Adjusted Gross Income ($1000s) 22 N 27 Reasonable Amount of Itemized Deductions ($1000s) 9.6 9.6
Data given below are on the adjusted gross income and the amount of itemized deductions taken by taxpayers. Data were reported in thousands of dollars. With the estimated regression equation ŷ = 4.68 +0.16x, the point estimate of a reasonable level of total itemized deductions for a taxpayer with an adjusted gross income of $52,500 is $13,080. Click on the datafile to reference the data. Excel File: data14-37.xlsx Adjusted Gross Income ($1000s) 22 N 27 Reasonable Amount of Itemized Deductions ($1000s) 9.6 9.6
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
Related questions
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![## Adjusted Gross Income and Itemized Deductions Analysis
### Data Overview
The table below illustrates the adjusted gross income \( x \) and the amount of itemized deductions taken by taxpayers. The figures are reported in thousands of dollars. Using the estimated regression equation
\[ \hat{y} = 4.68 + 0.16x \]
we can calculate the point estimate of the reasonable level of total itemized deductions for a taxpayer with an adjusted gross income of $52,500, which is determined to be $13,080.
**Excel File**: [data14-37.xlsx](#)
### Data Table
| Adjusted Gross Income (000s) | Reasonable Amount of Itemized Deductions (000s) |
|------------------------------|-------------------------------------------------|
| 22 | 9.6 |
| 27 | 9.6 |
| 32 | 10.1 |
| 48 | 11.1 |
| 65 | 13.5 |
| 85 | 17.7 |
| 120 | 25.5 |
### Calculations
#### a. 95% Confidence Interval
Develop a 95% confidence interval for the mean amount of total itemized deductions for all taxpayers with an adjusted gross income of $52,500 (to 2 decimals).
\[ \$ 9.2739 \text{ thousand to } \$ 16.886 \text{ thousand} \]
#### b. 95% Prediction Interval
Develop a 95% prediction interval estimate for the amount of total itemized deductions for a particular taxpayer with an adjusted gross income of $52,500 (to 2 decimals).
\[ \$ \_ \text{ thousand to } \$ \_ \text{ thousand} \]
#### c. IRS Audit Justification
If a particular taxpayer referred to in part (b) claimed total itemized deductions of $20,400, would the IRS agent's request for an audit appear to be justified?
\[ \_ \text{ than anticipated.} \]
#### d. Guidelines for IRS Audit
Use your answer to part (b) to provide the IRS agent a guideline on the amount of total itemized deductions a taxpayer with an adjusted gross income of $52,500 should claim before an audit is recommended (to the nearest whole number).
Any deductions exceeding the \[ \_ \](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fac4ecf6d-2ca9-4d7a-9411-ad5c7f2c67b6%2F79ea6a2f-9698-41df-9bbd-161edc640326%2F63azzjgb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:## Adjusted Gross Income and Itemized Deductions Analysis
### Data Overview
The table below illustrates the adjusted gross income \( x \) and the amount of itemized deductions taken by taxpayers. The figures are reported in thousands of dollars. Using the estimated regression equation
\[ \hat{y} = 4.68 + 0.16x \]
we can calculate the point estimate of the reasonable level of total itemized deductions for a taxpayer with an adjusted gross income of $52,500, which is determined to be $13,080.
**Excel File**: [data14-37.xlsx](#)
### Data Table
| Adjusted Gross Income (000s) | Reasonable Amount of Itemized Deductions (000s) |
|------------------------------|-------------------------------------------------|
| 22 | 9.6 |
| 27 | 9.6 |
| 32 | 10.1 |
| 48 | 11.1 |
| 65 | 13.5 |
| 85 | 17.7 |
| 120 | 25.5 |
### Calculations
#### a. 95% Confidence Interval
Develop a 95% confidence interval for the mean amount of total itemized deductions for all taxpayers with an adjusted gross income of $52,500 (to 2 decimals).
\[ \$ 9.2739 \text{ thousand to } \$ 16.886 \text{ thousand} \]
#### b. 95% Prediction Interval
Develop a 95% prediction interval estimate for the amount of total itemized deductions for a particular taxpayer with an adjusted gross income of $52,500 (to 2 decimals).
\[ \$ \_ \text{ thousand to } \$ \_ \text{ thousand} \]
#### c. IRS Audit Justification
If a particular taxpayer referred to in part (b) claimed total itemized deductions of $20,400, would the IRS agent's request for an audit appear to be justified?
\[ \_ \text{ than anticipated.} \]
#### d. Guidelines for IRS Audit
Use your answer to part (b) to provide the IRS agent a guideline on the amount of total itemized deductions a taxpayer with an adjusted gross income of $52,500 should claim before an audit is recommended (to the nearest whole number).
Any deductions exceeding the \[ \_ \
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