This website uses cookies to ensure you have the best experience. Learn more

Residual Essay

655 words - 3 pages

Here are the characteristics of a well-behaved residual vs. fits plot and what they suggest about the appropriateness of the simple linear regression model:
* The residuals "bounce randomly" around the 0 line. This suggests that the assumption that the relationship is linear is reasonable.
* The residuals roughly form a "horizontal band" around the 0 line. This suggests that the variances of the error terms are equal.
* No one residual "stands out" from the basic random pattern of residuals. This suggests that there

Normal Probability Plot

Note that the relationship between the theoretical percentiles and the sample percentiles is approximately linear. Therefore, the normal ...view middle of the document...

10), we fail to reject the null hypothesis. There is insufficient evidence to conclude that the error terms are not normally distributed. We can proceed assuming that the error terms are normally distributed.
Let's take a look at examples of the different kinds of normal probability plots we can obtain and learn what each tells us.
Normally distributed residuals
The following histogram of residuals suggests that the residuals (and hence the error terms) are normally distributed:

The normal probability plot of the residuals is approximately linear supporting the condition that the error terms are normally distributed.

Normal residuals but with one outlier
The following histogram of residuals suggests that the residuals (and hence the error terms) are normally distributed. But, there is one extreme outlier (with a value of 10):

Here's the corresponding normal probability plot of the residuals:

This is a classic example of what a normal probability plot looks like when the residuals are normally distributed, but there is just one outlier. The relationship is approximately linear with the exception of the one data...

Other assignments on Residual

Lessee Ltd Essay

1331 words - 6 pages lease. The equipment has a 4-year useful life and a fair value of $265,000. Additionally, the guaranteed residual value of the equipment is $20,000 and the expected salvage value is $2,000. Issue #1: How should Lessee Ltd.’s Lease Be Classified? International Accounting Standard 17.10 states five examples of situations that “individually or in combination would normally lead to a lease being classified as a finance lease.” Two of the

Lessee Inc Essay

1549 words - 7 pages concluded that the MLP includes the rental payments of $100,000.00 and the guaranteed residual value that is $20,000.00, but excludes the $2,000.00 of executory costs, such as any expenses related to insurance, maintenance, and taxes. In order to know which discount rate to use, I looked at ASC 840-10-25-31 which explains that the lessee should use the incremental borrowing rate unless the lessee knows the lessor’s implicit rate and the implicit rate

Financial Accounting Vs. Governmental/Not-For-Profit Accounting

250 words - 1 page citizens by providing public services, not for the purpose of generating returns to the owner(s), Governmental/Not-for-Profit Accounting lacks a residual ownership claim and the organization’s purpose is something other than to provide goods and services at a profit; it emphasizes on budgets, legal compliance, and efficiency and effectiveness measures other than income. These governmentally related not-for-profit organizations may include


256 words - 2 pages suggest that $2.3 billion is too much to pay, or can it afford to pay more – in either case, by how much? 7) What is the market-required rate of return for this investment, and why might this differ from the sponsor’s target return? 8) What is the value of Hertz using the equity residual method of valuation? 9) Assess the amount Ford is likely to receive if it pursues its IPO alternative versus being bought by a private equity group. 10) What factors would be considered in assessing whether the consortium’s bid is likely to beat that of a rival group?

Business And Management

1016 words - 5 pages + 0.410417 R-Squared = 0.877715 G) when X1 increase 1 unit, Y1 increased by 0.442584 unit, vice versa when X2 increase 1 unit, Y2 increased by 0.410417 unit, vice versa H) For X1 and Y1 For X2 and Y2 R-squared = 0.886884 R-squared = 0.877715 88.68% of X1 explain Y1 87.77% of X2 explain Y2 I) From OLS , press view , actual fitted residue, residue table |obs |Actual |Fitted |Residual

“Valuing Tangible Non-Current Assets Is Subjective And Complex And Can Therefore Result In Different Companies Valuing Similar Assets Very Differently”

1373 words - 6 pages methods of depreciation allowed under International Accounting Standards: straight-line depreciation – where depreciation is spread evenly over the entire useful life of the asset, and reducing balance depreciation, where depreciation is charged more heavily in earlier years and levels out to the residual value. Choice is a question of judgement. The difference between the acquisition cost and the disposal revenue is the depreciable amount.(2


2467 words - 10 pages Cola and Herman Miller. Residual income EVATM is based on the residual income technique that has been used since the early 20th century. Residual income is a performance measure normally used for assessing the performance of divisions, in which a finance charge is deducted from the profits of the division. The finance charge is calculated as the net assets of the division, multiplied by an interest rate – normally the company’s weighted


292 words - 2 pages r 1. Describe clearly the accounting changes Harnischfeger made in 1984 as stated in Note 2 of its financial statements In 1984 they changed the depreciation method they were using to expense their plants, machinery and equipment to the straight-line method for financial reporting purposes. This change included a adjustment of the residual values on certain machinery and equipment. They also included the products purchased from Kobe Steel


277 words - 2 pages * Pinholes generated by atmosphere * Residual Stresses * Rapid heating and cooling results in thermal stresses detrimental to joint strength * Prevention * Edge Alignment * Control of Heat Input * Preheating * Peeening * Heat treatment * Jigs and fixtures * Number of passes

Cognitive Disability

303 words - 2 pages Rochelle Powell March 28, 2016 Chapter 16 Assignment Part I Fill in the Blank 1. Disability Income Insurance 2. Double indemnity 3. Residual or Partial Disability 4. Waive of premium 5. Yes, because he has not made any payments toward the premium 6. SSDI and SSI 7. Physician treating the pt, Consultative examiner, or full or part time medical or psychologic consultant 8. within one year of injury


1346 words - 6 pages vida útil econômica do bem; III – o preço para o exercício da opção de compra seja o valor de mercado do bem arrendado. IV – não haja previsão de pagamento de valor residual garantido. A NBC TG 6 conceitua como arrendamento mercantil financeiro aquele em que há transferência substancial dos riscos e benefícios inerentes à propriedade de um ativo. O título de propriedade pode ou não vir a ser transferido. Arrendamento mercantil operacional é

Similar Documents

Methods Essay

330 words - 2 pages | | | | | | | | |   | df | SS | MS | F | Significance F | | | | Regression | 1 | 35.80647 | 35.80647 | 30.33368 | 0.002699 | | | | Residual | 5 | 5.902098 | 1.18042 | | | | | | Total | 6 | 41.70857 |   |   |   | | | | | | | | | | | | |   | Coefficients | Standard Error | t Stat | P-value | Lower 95% | Upper 95% | Lower 95.0% | Upper 95.0% | Intercept | 12.53342 | 1.395874 | 8.978911 | 0.000286 | 8.945217 | 16.12163 | 8.945217

Acct 557 Week 4 Essay

1175 words - 5 pages payments will be in equal annual installments. | 4) The lease is noncancelable with no renewal option. The lease term is 10 years (the same as the estimated economic life). | 5) At the end of the lease, the jousting ring will revert to Kingdom Leasing Inc. and have an unguaranteed residual value of $30000. Their implicit interest rate is 10%. | 6) Kingdom Leasing, Inc. Incurred costs of $6500 in negotiating and closing the lease. There are

Delta Vs Singapore Depreciation Essay

637 words - 3 pages = (1986) 10yr useful life + 10% residual value (1987-1992) 15yr useful life +10% residual value (1993) 20yr useful life + 5% residual value What is Delta’s annual depreciation costs (per $100)?  (1986) $9/yr  (1992) $6/yr  (1993) $4.75/yr * Note: When Delta changed its depreciation assumptions the first time it resulted in a 130m decrease in depreciation. Sing Air specific info     Owns 57 highly expensive planes

Management Accounting Chapter 10 Decentralization Essay

3618 words - 15 pages , operations, sales territories, divisions, and product lines. 10-5 Margin refers to the ratio of net operating income to total sales. Turnover refers to the ratio of total sales to average operating assets. The product of the two numbers is the ROI. 10-6 ROI can be improved (1) by increasing sales, (2) by reducing expenses, or (3) by reducing assets. 10-7 Residual income is the net operating income an investment center earns above the company’s