Problem 1 The CEO of Emerald Homes Industries (a home builder and developer of c

Question

Problem 1 The CEO of Emerald Homes Industries (a home builder and developer of commercial and residential properties has stores in the USA, Canada and Mexico). Emerald homes wants to find out how to reduce the losses at any given office location. Losses1000 as the Response variable (measured in $1000's per year) and uses the following as X variables. Salr1000 - Amount spent in Salary and total compensation at each location in $1000 -1 if there is a large competitor within the office's region located close to the office -0 otherwise (large competitor is far away) LgComp Marketing expenditures per year at each office in 100's of dollars And location of the office. Location is a dummy variable Canada -1 if office is located in Canada O otherwise Omitted Category is USA Mexico -1 if office is located in Mexico; -O otherwise He runs the following regressions Regression Analysis: Losses versus Marketing, LgComp,. The regression output is

Explanation / Answer

The correct answer is: Regression-4

Because, the regression-4 had strong correlation between the variables, here in regression-4 there is a 91% of strong correlation, so based on this evidence we say that regression-4 is best for checking curvilinearity.

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