Does the estimated value of the intercept make sense? Why or why not? (Please tr

Question

Does the estimated value of the intercept make sense? Why or why not? (Please try to explain how do you know this)

(8 points) Question 4 The following table shows the output of a regression of selected S&P; 500 companies' net income in billions of dollars (the dependent variable) on their sales in billions of dollars (the independent variable). SUMMARY OUTPUT Rearession Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.726492486 0.527791332 0.526571154 1444.608669 389 ANOVA MS Significance F 1 902692213.7 902692213.7 432.5529349 4.90343E-65 Regression Residual Total 387 807628057.7 2086894.206 388 1710320271 Coefficients Standard ErrortStat 4.18074218483.62471914 0.049994095 0.960152886 -160.2348801 168.5963645 0.062578367 0.003008878 20.79790698 4.90343E-65 0.056662574 0.068494161 P-value Lower 95% Upper 95% Intercept Sales

Explanation / Answer

The intercept value shows the amount of net income when sales are 0. Thus in this case as we are trying to show the relationship between sales and income this will not make sense as there cannot ideally be any income if the sales are 0. So this does not make intuitive sense.

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