Use computer software packages, such as Minitab or Excel, to solve this problem.

Question

Use computer software packages, such as Minitab or Excel, to solve this problem.

The owner of Showtime Movie Theaters, Inc., would like to predict weekly gross revenue as a function of advertising expenditures. Historical data for a sample of eight weeks follow.

Develop an estimated regression equation with the amount of television advertising as the independent variable (to 1 decimal).
Revenue = ______ + _________ TVAdv

Develop an estimated regression equation with both television advertising and newspaper advertising as the independent variables (to 2 decimals).
Revenue = ________ + ________ TVAdv + _________ NewsAdv

Is the estimated regression equation coefficient for television advertising expenditures the same in part (a) and in part (b)?
Select

Yes, the coefficients are the same

No, the coefficients are not the same

Predict weekly gross revenue for a week when $3.6 thousand is spent on television advertising and $1.9 thousand is spent on newspaper advertising?

$_________ in thousands

Weekly Television Newspaper Gross Revenue Advertising Advertising ($1,000s) ($1,000s) ($1,000s) 104 5.0 1.5 90 2.0 2.0 95 4.0 1.5 92 2.5 2.5 97 3.0 3.3 94 3.5 2.3 94 2.5 4.2 105 3.0 2.5

Explanation / Answer

Develop an estimated regression equation with the amount of television advertising as the independent variable.

Here are the regression result from the EXCEL workbook.

so The regression Equation is

Revenue = 85.3 +3.5 * TVAdv

(b) Develop an estimated regression equation with both television advertising and newspaper advertising as the independent variables

Answer : Here regression results are

Here, regression equation is

Revenue = 79.41 +4.22 * TVAdv + 1.42 NewsAdv

(C) Is the estimated regression equation coefficient for television advertising expenditures the same in part (a) and in part (b)?

Answer : No, Coefficient are not same.

(D) Predict weekly gross revenue for a week when $3.6 thousand is spent on television advertising and $1.9 thousand is spent on newspaper advertising?

By putting values in regression equation

Revenue = 79.41 +4.22 * TVAdv + 1.42 NewsAdv

TV adv = $ 3.6 (in thousands)

Newspaper Adv = $ 1.9 (in thousand

Revenue = 79.41 +4.22 * 3.9 + 1.42 * 1.9 = $ 98.566 Thousand dollars

SUMMARY OUTPUT Regression Statistics Multiple R 0.614841 R Square 0.378029 Adjusted R Square 0.274367 Standard Error 4.619674 Observations 8 Coefficients Standard Error t Stat P-value Intercept 85.31884 6.01561 14.18291 7.68E-06 Television Advertising ($1,000s) 3.468599 1.816357 1.909647 0.104759

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