The Following Regression Model Has Been Proposed to Predict Sales $\hat { Y }$

question 138

Short Answer

The following regression model has been proposed to predict sales at a furniture store.
$\hat { Y }$ = 10 - 4X1+7X2+18X3
where
X1 = competitor's previous day's sales in $1,000s) X2 = population within 1 mile in 1,000s)
X3 = 1 if any form of advertising was used, 0 if otherwise
$\hat { Y }$ = sales in $1,000s)
a. Fully interpret the meaning of the coefficient of X3.
b. Predict sales in dollars) for a store with competitor's previous day's sale of $3,000, a population of 10,000 within 1 mile, and six radio advertisements.

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Definitions:

Other Comprehensive Income

Components of comprehensive income that are excluded from net income, including items such as unrealized gains or losses on foreign investments, pension plan adjustments.

IFRS

A collection of global accounting standards, International Financial Reporting Standards dictate the reporting methods for specific transactions and events in financial statements.

Other Comprehensive Income (OCI)

Items of income and expense that are not included in net income but directly affect equity, such as changes in the value of foreign investments.

Statement of Changes

A financial report detailing the changes in equity of a company over a period, including transactions with shareholders and comprehensive income.