A Multiple Linear Regression Analysis Involving 45 Observations Resulted in the Following

question 122

Essay

A multiple linear regression analysis involving 45 observations resulted in the following least squares prediction equation: $$\hat { y } = .408 + 1.3387 x _ { 1 } + 2.1 x _ { 2 }$$ .
The SSE for the above model is 49.
Addition of two other independent variables to the model,resulted in the following multiple linear regression equation: $$\hat { y } = 1.2 + 3 x _ { 1 } + 12 x _ { 2 } + 4 x _ { 3 } + 8 x _ { 4 }$$ .
The latter model's SSE is 40.
-Determine the degrees of freedom regression (explained variation),degrees of freedom error (unexplained variation),and total degrees of freedom for the model with two independent variables.

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Definitions:

Contribution Margin

Contribution Margin is the difference between sales revenue and variable costs of production, indicating how much revenue contributes to fixed costs and profit.

Contribution Format

A financial reporting format that highlights the contribution margin, used primarily in internal decision-making processes.

Income Statement

A financial report detailing a firm's income and expenditures within a certain timeframe, resulting in the total earnings or deficit experienced during that interval.

Net Operating Income

The income generated from normal business operations after deducting operating expenses but before interest and taxes.