Multiple Regression Analysis Was Used to Study the Relationship Between

question 135

Essay

Multiple regression analysis was used to study the relationship between a dependent variable, Y, and four independent variables; X1, X2, X3 and, X4. The following is a partial result of the regression analysis involving 31 observations.
$\begin{array}{lcc} & \text { Coefficient } & \text { Standard Error } \\\text { Intercept } & 18.00 & 6.00 \\\mathrm{X}_{1} &12.00 & 8.00 \\\mathrm{X}_{2} & 24.00 & 48.00 \\\mathrm{X}_{3} &-36.00 & 36.00 \\\mathrm{X}_{4} &16.00 & 2.00\end{array}$
$\text { Analysis of Variance }$
$\begin{array}{lllc}\text { Source } & \text { DF } & \text { SS } & \text { MS } &F\\\text { Regression } & & & 125\\\text { Error }&&\\\text { Total }&&760\end{array}$
a. Compute the coefficient of determination.
b. Perform a t test and determine whether or not β₁ is significantly different from zero α = 0.05).
c. Perform a t test and determine whether or not β4 is significantly different from zero α = 0.05).
d. At α = 0.05, perform an F test and determine whether or not the regression model is significant.

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Definitions:

Net Investment

The total amount of money spent on acquiring or maintaining fixed assets after accounting for depreciation.

MACRS

Modified Accelerated Cost Recovery System, a method of depreciation applied in the U.S. to determine the tax-deductible value of assets over time.

Marginal Tax Rate

The tax rate that applies to the last unit of currency of the taxpayer's income, influencing additional income's tax impact.

Net Cash Flows

Represents the amount of money that flows into and out of a business during a specific period, accounting for all income and expenses.