An marketing analyst wants to examine the relationship between sales (in $1,000s

Question

An marketing analyst wants to examine the relationship between sales (in $1,000s) and advertising (in $100s) for firms in the food and beverage industry and collects monthly data for 25 firms. He estimates the model Sales-0 +1 Advertising + . The following ANOVA table below shows a portion of the regression results df Regression Residual Total 78.53 504.02 582.55 MS 78.53 21.91 3.58 23 24 Coefficients 40.1 2.88 Standard Error t-stat p-value 2.848 0.0052 1.8950.0608 Intercept Advertising 14.08 1.52 Which of the following is the prediction of Sales for a firm with Advertising of $500? O $1,480 $40,100 O $54,500 O $148,00o

Explanation / Answer

The linear regression equation is given as =40.1+2.88*sales

these are the coefficient of regression equation

thus answer is 40.1+2.88*5=54.5 (because sales is given in 100s)

thus answer is 54500 in thousands of dollars

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