The Following Is Part of the Results of a Regression

question 93

Essay

The following is part of the results of a regression analysis involving sales (y in millions of dollars), advertising expenditures (x₁ in thousands of dollars), and number of salespeople (x₂) for a corporation. The regression was performed on a sample of 10 observations.

a.If the company uses $40,000 in advertisement and has 30 salespersons, what are the expected sales? Give your answer in dollars.
b.At  = 0.05, test for the significance of the coefficient of advertising.
c.At  = 0.05, test for the significance of the coefficient of the number of salespeople.

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Definitions:

Operating Activities

Transactions and events that affect net income, related to the primary operations of the business.

Contingent Activities

Contingent activities are actions or events that may occur but their happening is dependent upon certain conditions or situations being met.

Financing Activities

Financing activities are transactions involving obtaining or repaying capital, including issuing equity, borrowing loans, and paying dividends.

Investing Activities

Financial transactions that relate to the acquisition or sale of assets, investments, and other long-term items that are not part of the company's primary operations.