D Co forecasts costs using the model y = a + bx. The gradient is $40. When y = $1,100 then x = 20.
What is the value of the intercept?
The correct answer is: 300
The point at which the straight line crosses the y axis is the intercept and this is the value of a. The gradient is b = $40.
y = a + bx
$1,100 = a + ($40 x 20)
$1,100 - $800 = a
a = 300
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