The top law firms in the world in terms of profit per equity partner and the gro

Question

The top law firms in the world in terms of profit per equity partner and the gross revenue ($ millions) for the most recent fiscal year were analyzed.  Given this information, answer the question using the provided output.

a. What is the slope?

b. Interpret the slope in the language of the problem.

c. What is the standard error of the estimate?

d. For a firm with a gross_revenue of $675 million, what is the predicted profit per equity partner (partners)? Give answer to three decimal places.

Regression Analysis: partners versus gross revenue Analysis of Variance DE Adj SS Adj MS Value P-Value Source 1 702775 702775 174.59 0.000 Regression gross revenue 1 702775 702775 174.59 0.000 Error 98 394470 4025 Lack-of-Fit 96 391237 4075 2.52 0.326 1617 3233 Pure Error 99 1097245 Total Model Summary R-sq R-sq (adj) R-sq (pred) 63.68$ 60.99 63.4445 64.053 oefficients Coef SE Coef T-Value Value VIF Term 65.8 11 5.61 0.000 Constant gross revenue 0.1682 0.0127 13.21 0.000 1.00 Regression Equation partners 65.8 0.1682 gross revenue

Explanation / Answer

Your regression equation is

Partners = 65.8 + 0.1682 gross_revenue .

a) Slope = 0.1682

b) Interpretation of Slope

A firm with a gross_revenue ofincreased by $1 million, then predicted profit per equity partner in increased by $ 0.1682 Million .

c) Standard error of the estimate = s = 63.4445

d ) For a firm with a gross_revenue of $675 million, the predicted profit per equity partner (partners) is

    Partners = 65.8 + 0.1682 * 675

                   = 179.335

So, a firm with a gross_revenue of $675 million, the predicted profit per equity partner (partners) is $179.335

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