EBK STATISTICAL TECHNIQUES IN BUSINESS
17th Edition
ISBN: 9781259924163
Author: Lind
Publisher: MCGRAW HILL BOOK COMPANY
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Chapter 20, Problem 15CE
a.
To determine
Construct a payoffs table.
b.
To determine
Find the expected payoffs for all cottages.
Give the recommended decision.
c.
To determine
Construct an opportunity loss table.
d.
To determine
Find the expected opportunity losses and provide the conclusion.
e.
To determine
Obtain the
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To the Internal Revenue Service, the reasonableness of total itemized deductions depends on the taxpayer's adjusted gross income. Large deductions, which include charity and medical deductions, are more reasonable for taxpayers with large adjusted gross incomes. If a taxpayer claims larger than average itemized deductions for a given level of income, the chances of an IRS audit are increased. Data (in thousands of dollars) on adjusted gross income and the average or reasonable amount of itemized deductions follow.
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Develop a scatter diagram for these data with adjusted gross income as the independent variable.
(b)
Use the least squares method to develop the estimated regression equation that can be used to predict itemized deductions (in $1,000s) given the adjusted gross income (in $1,000s). (Round your numerical values to three decimal…
To the Internal Revenue Service, the reasonableness of total itemized deductions depends on the taxpayer's adjusted gross income. Large deductions, which include charity and medical deductions, are more reasonable for taxpayers with large adjusted gross incomes. If a taxpayer claims larger than
average itemized deductions for a given level of income, the chances of an IRS audit are increased. Data (in thousands of dollars) on adjusted gross income and the average or reasonable amount of itemized deductions follow.
Adjusted Gross Income
($1,000s)
Itemized Deductions
($1,000s)
22
9.6
27
9.6
32
10.1
48
11.1
65
11.5
85
15.7
120
23.5
(a) Develop a scatter diagram for these data with adjusted gross income as the independent variable.
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30
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120 140
Adjusted Gross Income ($1,000s)
Adjusted Gross Income ($1,000s)
Adjusted Gross Income ($1,000s)…
To the Internal Revenue Service, the reasonableness of total itemized deductions depends on the taxpayer's
adjusted gross income. Large deductions, which include charity and medical deductions, are more reasonable
for taxpayers with large adjusted gross incomes. If a taxpayer claims larger than average itemized deductions
for a given level of Income, the chances of an IRS audit are increased. Data (In thousands of dollars) on
adjusted gross income and the average or reasonable amount of itemized deductions follow.
Adjusted Gross Income
($1,000s)
Itemized Deductions
($1,000s)
22
9.6
27
9.6
32
10.1
48
11.1
65
12.5
85
16.7
120
24.5
(a) Develop a scatter diagram for these data with adjusted gross income as the independent variable.
(b) Use the least squares method to develop the estimated regression equation that can be used to predict
itemized deductions (in $1,000s) given the adjusted gross income (in $1,000s).
(c) Predict the reasonable level of total itemized deductions (in $1,000s)…
Chapter 20 Solutions
EBK STATISTICAL TECHNIQUES IN BUSINESS
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, statistics and related others by exploring similar questions and additional content below.Similar questions
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