TABLE 17-6 A Weight-Loss Clinic Wants to Use Regression Analysis to Build

question 72

True/False

TABLE 17-6
A weight-loss clinic wants to use regression analysis to build a model for weight loss of a client (measured in pounds).Two variables thought to affect weight loss are client's length of time on the weight-loss program and time of session.These variables are described below:
Y = Weight loss (in pounds)
X₁ = Length of time in weight-loss program (in months)
X₂ = 1 if morning session,0 if not
X₃ = 1 if afternoon session,0 if not (Base level = evening session)
Data for 12 clients on a weight-loss program at the clinic were collected and used to fit the interaction model:
Y = β₀ + β₁X₁ + β₂X₂ + β₃X₃ + β₄X₁X₂ + β₅X₁X₃ + ε
Partial output from Microsoft Excel follows:
Regression Statistics ANOVA
F = 5.41118 Significance F = 0.040201
-True or False: Referring to Table 17-6,the overall model for predicting weight loss (Y)is statistically significant at the 0.05 level.

Understand the role of the present value factor in investment analysis.

Recognize the limitations and advantages of the average rate of return method.

Calculate the internal rate of return and its importance in investment decision-making.

Apply the concept of the time value of money in comparing future cash inflows to present value.