To Encourage Performance,loyalty,and Continuing Education,the Human Resources Department at a Large

question 77

Multiple Choice

To encourage performance,loyalty,and continuing education,the human resources department at a large company wants to develop a regression-based compensation model for mid-level managers based on three variables: business unit-profitability in $1,000s (Profit) ,years with company (Years) ,and dummy variable (Grad) ,graduate degree in relevant field.Data have been collected for 36 managers.The sample regression equation is = - 13,264.3 + 14.13Profit + 1,868.53Years + 45,121.94Grad - 0.1539Profit × Grad - 198.34Years × Grad.Which of the following is the difference in predicted compensations for two managers,one having graduate degree,the other one not,both having 10 years with the company,and having the same business-unit profit of $3,000,000?

• A) $34,456.51
• B) $38,980.72
• C) $41,235.52
• D) $47,566.51

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