Instruction 12 $\text { Regression statistics }$ $\text { ANOVA }$

question 25

Multiple Choice

Instruction 12.23
The managing partner of an advertising agency believes that his company's sales are related to the industry sales. He uses Microsoft Excel's Data Analysis tool to analyse the last four years of quarterly data with the following results:
$\text { Regression statistics }$
$\begin{array}{|l|l|}\hline \text { Multiple R } & 0.802 \\\hline \text { R Square } & 0.643 \\\hline \begin{array}{l}\text { Adjusted R } \\\text { Square }\end{array} & 0.618 \\\hline \begin{array}{l}\text { Standard Error } \\\text { SYX }\end{array} & 0.9224 \\\hline \text { Observations } & 16 \\\hline\end{array}$

$\text { ANOVA }$
$\begin{array}{|l|l|l|l|l|l|}\hline & \text { df } & \text { SS } & \text { MS } & \text { F } & \text { Sig.F } \\\hline \text { Regression } & 1 & 21.497 & 21.497 & 25.27 & 0.000 \\\hline \text { Error } & 14 & 11.912 & 0.851 & & \\\hline \text { Total } & 15 & 33.409 & & & \\\hline\end{array}$

$\begin{array}{|l|l|l|l|l|}\hline\text { Predictor } & \text { Coef } & \text { StdError } & \text { t Stat } & \text { p-value } \\\hline \text { Intercept } & 3.962 & 1.440 & 2.75 & 0.016 \\\hline \text { Industry } & 0.040451 & 0.008048 & 5.03 & 0.000\\\hline\end{array}$


$\begin{array}{|l|l|}\hline\text { Durbin-Watson } & 1.59 \\\text { Statistic } &\\\hline\end{array}$

-Referring to Instruction 12.23,the partner wants to test for autocorrelation using the Durbin-Watson statistic.Using a level of significance of 0.05,the decision he should make is

• A) the test is unable to make a definite conclusion.
• B) there is evidence of autocorrelation.
• C) there is no evidence of autocorrelation.
• D) there is not enough information to perform the test.

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Definitions:

Product Cost

The total expense incurred to manufacture or acquire a product, including direct materials, labor, and overhead costs.

Depreciation

An accounting method of allocating the cost of a tangible or physical asset over its useful life, representing the asset's wear and tear over time.

Store Equipment

Tangible assets used in a retail business's operations, such as cash registers, shelving, and display cases.

Period Cost

Costs that are not directly associated with the production of goods and are expensed in the period they are incurred.