We want to test whether or not the addition of 3 variables to a model will be statistically significant. You are given the following information based on a sample of 25 observations. 
= 62.42 - 1.836x1 + 25.62x2
SSE = 725 SSR = 526
The equation was also estimated including the 3 variables. The results are 
= 59.23 - 1.762x1 + 25.638x2 + 16.237x3 + 15.297x4 - 18.723x5
SSE = 520 SSR = 731
a.State the null and alternative hypotheses.
b.Test the null hypothesis at the 5% level of significance.
Definitions:
Variable Costs
Variable costs are expenses that change in proportion to the activity or production level of a business.
Fixed Costs
Expenses that do not fluctuate with the level of goods or services produced by the business.
Net Income
The total earnings of a person or organization after subtracting all expenses and taxes.
Variable Costs
Costs that change in proportion to the level of activity or volume of production in a company.
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