The planning director of an electronics company is interested in finding out the

Question

The planning director of an electronics company is interested in finding out the effect of research and development (R&D;) expenditure on company profits (in rands) He has obtained expenditure and profit data from six companies operating in the same market as his company. Sigma X^2 = 5575 Sigma Y^2 = 18050 Sigma XY = 10000 Sigma x = 175 Sigma Y = 320 The coefficient of determination is 1. 0.9798 2. 0.9600 3. 0.9898 4 0.9900 5. 0.9801 Consider the information on question 13, which one of the following statements is incorrect? 1. The mean of X = 29 1667 and the mean of Y = 53.333 2 The slope is 1.4160 3 The y-intercept is 12 0354 4. The equation line is Y_1 = 1.4160 + 12.0354X_1 5. The relationship is very strong. Consider the information on question 13, the estimated profit for R&D; expenditure of 23 will be? 1. R44.60 2. R12.0354 3. R141.60 4. R40.00 5. R70.00

Explanation / Answer

PERFORM REGRESSION IN EXCEL

coefficient of determination =R sq from the above output

=0.959952

=0.96

OPTION 2

Solution14:

Regression eq

y=12.035+1.415x

slope is 1.415

y intercept =12.035

since r=0.979

relationship is strong

OPTION4 IS INCORRECT

OPTION4

Solution15;

mean of X=29.17

mean of Y=53.33

y=12.035+1.415x

for x=23

y=12.035+1.415(23)

y=44.58

y=44.6

OPTION1

SUMMARY OUTPUT Regression Statistics Multiple R 0.979771 R Square 0.959952 Adjusted R Square 0.94994 Standard Error 3.137695 Observations 6 ANOVA df SS MS F Significance F Regression 1 943.9528 943.9528 95.88015 0.00061 Residual 4 39.38053 9.845133 Total 5 983.3333 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 12.0354 4.407821 2.730464 0.052418 -0.20268 24.27347 R&D Expenditure,X 1.415929 0.144603 9.791841 0.00061 1.014447 1.817411

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