Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You may need to use the appropriate appendix table or technology to answer this question. The data be ow give the adjusted gross income x

image text in transcribedimage text in transcribed
You may need to use the appropriate appendix table or technology to answer this question. The data be ow give the adjusted gross income x and the amount of itemized deductions taken by taxpayers y. Data were reported in thousands of dollars. Adjusted Gross Income Itemized Deductions ($1,0009) (s1,ooos) 22 9.6 27 9.6 32 10.1 48 11.1 65 11.5 85 17.7 120 25.5 With the estimated regression equation )7 = 4.51 + 0.16X, the point estimate of a reasonable level of total itemized deductions for a taxpayer with an adjusted gross income of $47,500 is $12,110. (a) Develop a 95% condence interval for the mean amount of total itemized deductions (in thousands of dollars) for all taxpayers with an adjusted gross income of $47,500. (Round your answers to two decimal places.) (b) Develop a 95% prediction interval estimate for the amount of total itemized deductions (in thousands of dollars) for a particular taxpayer with an adjusted gross income of $47,500. (Round your answers to two decimal places.) (c) If the particular taxpayer referred to in part (b) claimed total itemized deductions of $21,000, would the [RS agent's request for an audit appear to be justified? 0 Since the predicted amount of itemized deductions is significantly greater than the actual claimed itemized deductions, the agent's request for an audit does not appear to be justified. ' ince the predicted amount of itemized deductions is significantly greater than the actual claimed itemized deductions, the agent's request for an audit appears to be justified. 0 Since the predicted amount of itemized deductions is roughly the same as the actual claimed itemized deductions, the agent's request for an audit appears to be justied. 0 Since the predicted amount of itemized deductions is significantly less than the actual claimed itemized deductions, the agent's request for an audit appears to be justied. 0 Since the predicted amount of itemized deductions is roughly the same as the actual claimed itemized deductions, the agent's request for an audit does not appear to be justified.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Mathematics For Liberal Arts Majors

Authors: Christopher Thomas

1st Edition

0071544305, 9780071544306

More Books

Students also viewed these Mathematics questions