The owner of Showtime Movie Theaters, Inc., would like to predict weekly gross r

Question

The owner of Showtime Movie Theaters, Inc., would like to predict weekly gross revenue as a function of advertising expenditures. Historical data for a sample of eight weeks follow. Weekly Televison Newspaper Gross AdvertisingAdvertising Revenue ($1000s) ($1000s) ($1000s) 96 90 95 93 95 95 94 94 2.5 2.5 4 4.5 2.5 4 1.5 3.5 3.3 3.3 4.2 2.5 a. Use = .01 to test the hypotheses Ha: 1 andlor 2 is 'it equal to zero for the model = 0 + 1x1 + 2x2 + , where televisicn advertising ($1000s) #2-newspaper advertisin, ' $100s) Compute the F test statistic (to 2 decimals) Wha less than .01 The overall model is significant b. Use -.05 to test the significance of 1-Compute the t test statistic (to 2 decimals) less than.01 significant relationship between television advertising and revenue #) | No, x1 should not be dropped from the model C. Use = .05 to test the significance of 2-Compute the t test statistic (to 2 decimals) Wha less than.01 hat Significant relationship between newspaper advertising and revenue Should x2 be dropped model? No, x2 should not be dropped from the model

Explanation / Answer

applying regression on above:

a)

F test statistic =47.01

b)test statistic for beta1 =9.60

c)  test statistic for beta2 =4.91

df SS MS F Significance F Regression 2 22.7882 11.3941 47.0125 0.0006 Residual 5 1.2118 0.2424 Total 7 24 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 84.8569 1.0683 79.4348 0.0000 82.1108 87.6029 82.1108 87.6029 TV ad 1.6153 0.1683 9.5960 0.0002 1.1826 2.0480 1.1826 2.0480 newspaper ad 1.1181 0.2279 4.9068 0.0044 0.5323 1.7039 0.5323 1.7039

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