Regression Analysis Was Applied Between Sales (In $10,000) and Advertising $\hat { y }$

question 67

Multiple Choice

Regression analysis was applied between sales (in $10,000) and advertising (in $100) and the following regression function was obtained. $\hat { y }$ = 50 + 8x

Based on the above estimated regression line, if advertising is $1000, then the point estimate for sales (in dollars) is

• A) $8050.
• B) $130.
• C) $130,000.
• D) $1,300,000.

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Definitions:

Effect On Income

The impact of specific actions, events, or decisions on a company's net income or profitability.

Book Value

Book value is the net value of a company's assets as reported on the balance sheet, calculated by subtracting liabilities from the total assets.

Salvage Value

The estimated residual value of an asset at the end of its useful life, used in calculating depreciation.

Market Value

Market value is the price at which an asset would trade in a competitive auction setting, reflecting what a buyer is willing to pay.