The following is part of the results of a regression analysis involving sales

Question

 

3.           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.

 

                                           Coefficient              Standard Error

            Constant            -11.340                   20.412

                    X1 advertisg                0.798                           0.332

                    X2 salesperson             0.141                           0.278

 

1. Write the regression equation.

 

                   

              b.    Interpret the coefficients of the estimated regression equation found in Part (a).

 

              c.    At a =0.05, test for the significance of the coefficient of advertising.

              d.    At a =0.05, test for the significance of the coefficient of number of salespeople.

              e.    If the company uses $50,000 in advertisement and has 800 salespersons, what are the expected sales?  Give your answer in dollars.

Answer 1

= -11.34 + 0.798x1+ 0.141x2b.As advertising increases by 1 unit ($1,000) (holding the number of salespersons constant), salesare expected to increase by 0.798 units ($798,000). As the number of salespersons increases by 1 (holding advertising constant), sales are expected to increase by $141,000.c.t = 2.404 > 2.365; advertising is significantd.t = 0.507 < 2.365; the number of salespersons is not significante.$141.36 million