The Regression Output for Sales and Advertising Spend Is Shown

question 16

Multiple Choice

The regression output for sales and advertising spend is shown below. Model summary
$$\begin{array} { | l | l | r | r | r | } \hline \text { Model } & \boldsymbol { R } & \boldsymbol { R } \text {-square } & \begin{array} { c } \text { Adjusted } \\\boldsymbol { R } \text {-square }\end{array} & \begin{array} { r } \text { Std. error of } \\\text { the estimate }\end{array} \\\hline 1 & .445 \text { (a) } & .198 & .169 & 1229.780 \\\hline\end{array}$$ a Predictors: (Constant) , advertising spend
ANOVA(b)
$$\begin{array} { | l | l | r | r | r | r | c | } \hline \text { Model } & & \begin{array} { c } \text { Sum of } \\\text { squares }\end{array} & \text { df } & \text { Mean square } & { \boldsymbol { F } } & \text { Sig. } \\\hline 1 & \text { Regression } & 10448599.647 & 1 & 10448599.647 & 6.909 & .014 ( \mathrm { a } ) \\\hline & \text { Residual } & 42346067.019 & 28 & 1512359.536 & & \\\hline & \text { Total } & 52794666.667 & 29 & & & \\\hline\end{array}$$ a Predictors: (Constant) , advertising spend
B Dependent variable: Sales (A$'000)
Coefficients(a)
$$\begin{array} { | l | l | cr | r | r | r |} \hline\text { Model } & & { \begin{array} { c } \text { Unstandardised } \\\text { coefficients }\end{array} } && \begin{array} { c } \text { Standardised } \\\text { coefficients }\end{array} & { \boldsymbol { t } } & { \text { Sig. } } \\\hline & & \boldsymbol { B } & \text { Std. Error } & \text { Beta } & & \\\hline 1& \text { (Constant) } & 2993.298 & 706.247 & & 4.238 & .000 \\\hline & \text { Number of salespeople } & 42.928 & 16.332 & .445 & 2.628 & .014 \\\hline\end{array}$$ a Dependent variable: Sales (A$'000)
The above shows that:

• A) approximately 45 per cent of the variance in sales can be explained by advertising spend.
• B) approximately 43 per cent of the variance in Sales can be explained by advertising spend.
• C) approximately 14 per cent of the variance in sales can be explained by advertising spend.
• D) approximately 20 per cent of the variance in sales can be explained by advertising spend.

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Definitions:

Bruce A. Kirchhoff

An academic notable for contributions to the fields of entrepreneurship and small business management.

Small Businesses

Enterprises characterized by having a small number of employees, low volume of sales, and relatively limited market influence.

Out of Business

signifies a status where a company ceases operations, often due to financial problems or inability to sustain its business model.

Unpaid Bills

Liabilities or debts that have been invoiced but not yet settled or paid.