=4-17 Accountants at the firm Walker and Walker believed that several traveling executives submit unusually high travel

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=4-17 Accountants at the firm Walker and Walker believed that several traveling executives submit unusually high travel vouchers when they return from business trips. The accountants took a sample of 200 vouchers submitted from the past year; they then developed the following multiple regression equation relating expected travel cost (Y) to number of days on the road (X1) and distance traveled (X2) in miles:

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Y = $90.00 + $48.50X1 + $0.40X2 The coefficient of correlation computed was 0.68.

(a) If Thomas Williams returns from a 300-mile trip that took him out of town for 5 days, what is the expected amount that he should claim as expenses?

(b) Williams submitted a reimbursement request for $685; what should the accountant do?

(c) Comment on the validity of this model. Should any other variables be included? Which ones? Why?

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Quantitative Analysis For Management

ISBN: 9789332578692

12th Edition

Authors: Barry Render, Ralph M. Stair, Michael E. Hanna

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