The regression equation NetIncome = 2,159 + 0.0312 Revenue was estimated from a

Question

The regression equation NetIncome = 2,159 + 0.0312 Revenue was estimated from a sample of 100 leading world companies (variables are in millions of dollars).

Calculate the residual for the x, y pair ($45,533, $2,697). (A negative value should be indicated by a minus sign. Round your answer to 4 decimal places.)

Calculate the residual for the x, y pair ($60,417, $3,497).(A negative value should be indicated by a minus sign. Round your answer to 4 decimal places.)

The regression equation NetIncome = 2,159 + 0.0312 Revenue was estimated from a sample of 100 leading world companies (variables are in millions of dollars).

Explanation / Answer

a 1)
Net Income = 2,159 + 0.0312* Revenue
for the x, y pair ($45,533, $2,697)
=(0.0312*45,533)+2159= 3579.6296
Residual = 3579.63-2697=+882.6296

a2) Since residual is positive, regression equation overestimated the net income

b1) for the x, y pair ($60,417, $3,497)
NI=$4044.0104
Residual=$547.0104

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