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 slope value?   If sales rise by one-dollar, net cash flow would increase by 18.23% 1823 is multiplied by the current period actual and (1 - 0.1823) is multiplied by the current period forecast If sales drop by one-dollar, net cash flow would drop by $0.1823 23% of the change in net cash flow is explained by the change in net sales

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter2: International Flow Of Funds
Section: Chapter Questions
Problem 5IEE
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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 slope value?

 

  1. If sales rise by one-dollar, net cash flow would increase by 18.23%
  2. 1823 is multiplied by the current period actual and (1 - 0.1823) is multiplied by the current period forecast
  3. If sales drop by one-dollar, net cash flow would drop by $0.1823
  4. 23% of the change in net cash flow is explained by the change in net sales
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