Help with hypothese Management of Meddicorp believes that the following four exp

Question

Help with hypothese

Management of Meddicorp believes that the following four explanatory variables may be important in explaining the variation in sales. These variables are (including Meddicorp's sales) y, Meddicorp's sales (in thousands of dollars) in each territory for 2003 (SALES) x1, the amount Meddicorp spent on advertising in each territory (in hundreds of dollars) in 2003 (ADV) x2, the total amount of bonuses paid in each territory (in hundreds of dollars) in 2003 (BONUS) x3, market share currently held by Meddicorp in each territory (MKTSHR) X4, largest competitor's sales in each territory (in hundreds of dollars) (COMPET) Build a regression model in EXCEL to predict Meddicorp's sales from the four explanatory variables. Use the results to help answer the following questions (a) Is there a linear relationship between Meddicorp's sales and competitor's sales after taking into account all other variables in the model? Use = 0.01. The data are in the worksheet named MEDDICORP,Hw7 (See the instructions of this assignment for the link to download the data in the file HW7 Data.xls) State the hypotheses to be tested Ho: 3 = 0 State the decision rule O Reject Ho if p 0.01 Do not reject Ho if p s 0.01 O Reject Ho if p

Explanation / Answer

a) H0: Beta4 = 0

Beta4 0

b) C option

Reject H0 if p < 0.01

he p-value is a number between 0 and 1 andinterpreted in the following way: A small p-value (typically 0.01) indicates strong evidence against the null hypothesis, so you reject the null hypothesis.

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