Question

Comparing least-squares regression to high-low estimation:

		Least-squares regression accurately predicts costs outside the relevant range
		Least-squares regression makes fuller use of the data
		Least-squares regression involves more simplistic calculations
		All of the above

Answer 1

Comparing lease-squares regression to high-low estimation:-

The correct answer is Option B - Least squares regression makes fuller use of the data. High low method generally uses only the relevant data points in creating the cost equation, while a least squares regression model uses all of the available data in the situation to create a best fit of the cost estimation.

Option A is not true because it is not possible for least squares regression to predit costs outside relevant range.

Option C is not true. Least-squares method is not as simple to calculate in comparison to the high - low estimation.

Option D is not true because all the options are not ture.

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