4. Accounting Application (15 points) The auditors for Delaware Car Dealers (DCC) are suspicious that DCC is cooking its books. Specifically, they think DCC is
4. Accounting Application (15 points) The auditors for Delaware Car Dealers (DCC) are suspicious that DCC is cooking its books. Specifically, they think DCC is using discretionary write-offs to manipulate the reported net income. To verify this, the auditors collect data from 25 companies similar to DCC. The cumulative reported third quarter income and the final net income for the 25 firms are provided in the file DCC. If DCC reports a cumulative third quarter income of $2,500,000 and a net income of $4,900,000 should the auditors conclude that DCC could be involved in fraudulent bookkeeping? Answer this question using numerical values from the appropriate regression model you must first construct. Report the regression equation, and a brief summary of the additional analysis you carried out to answer the question, either "yes" or "no".
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