The regression equation NetIncome = 2,521 + 0.0389 Revenue was estimated from a

Question

The regression equation NetIncome = 2,521 + 0.0389 Revenue was estimated from a sample of 100 leading world companies (variables are in millions of dollars).

(a-1)

If Revenue = 1, then NetIncome =  million. (Round your answer to 2 decimal places.)

(a-2) Choose the correct statement.

Increasing the revenue raises the net income.
Decreasing the revenue raises the net income.
Increasing the revenue lowers the net income.

(b) Choose the right option.

The intercept is meaningful because a firm can have net income when revenue is zero.
The intercept is not meaningful because a firm cannot have net income when revenue is zero.

(c) If Revenue = 24,304, then NetIncome =  million. (Round your answer to the nearest whole number.)

Explanation / Answer

a1 if revenue is 1, netincome=2521+0.0389=2521.0389

a2 Increasing the revenue raises the net income. as coefficient of revenue is positive

b) The intercept is not meaningful because a firm cannot have net income when revenue is zero.

c) If Revenue = 24,304, then netincome=2521+0.0389*24304=3466.425

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