{Exercise 14.13} Compute b 1 and b 0 (to 4 decimals). b 1 ______ b 0 ______ Comp
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Question
{Exercise 14.13}
Compute b1 and b0 (to 4 decimals).
b1 ______
b0 ______
Complete the estimated regression equation (to 2 decimals).
= ____ + ____ x
Predict a reasonable level of total itemized deductions for a taxpayer with an adjusted gross income of $52.5 thousand (to 2 decimals).
______ thousand dollars
What is the value, in dollars, of the deductions calculated in part (c) above (to the nearest whole number)?
$ ______
If this taxpayer claimed itemized deductions of $20,400, would the IRS agent's request for an audit appear justified?
_________________
Explanation / Answer
Which of the following scatter diagrams accurately represents the data
Scatter diagram 1
Regression Analysis
r²
0.955
n
7
r
0.977
k
1
Std. Error
1.372
Dep. Var.
deduction
ANOVA table
Source
SS
df
MS
F
p-value
Regression
199.0083
1
199.0083
105.79
.0001
Residual
9.4060
5
1.8812
Total
208.4143
6
Regression output
confidence interval
variables
coefficients
std. error
t (df=5)
p-value
95% lower
95% upper
Intercept
4.6768
1.0334
4.526
.0063
2.0203
7.3332
Income
0.1613
0.0157
10.285
.0001
0.1210
0.2016
Predicted values for: deduction
95% Confidence Interval
95% Prediction Interval
Income
Predicted
lower
upper
lower
upper
Leverage
52.5
13.1455
11.8006
14.4904
9.3720
16.9191
0.146
Compute b1 and b0 (to 4 decimals).
b1 0.16
b0 4.68
Complete the estimated regression equation (to 2 decimals).
= 4.68 + 0.16 x
Predict a reasonable level of total itemized deductions for a taxpayer with an adjusted gross income of $52.5 thousand (to 2 decimals).
13.15 thousand dollars
What is the value, in dollars, of the deductions calculated in part (c) above (to the nearest whole number)?
$ 13150
If this taxpayer claimed itemized deductions of $20,400, would the IRS agent's request for an audit appear justified?
IRS agent's request for an audit appear not justified, because expected deductions calculated is $13150.
Regression Analysis
r²
0.955
n
7
r
0.977
k
1
Std. Error
1.372
Dep. Var.
deduction
ANOVA table
Source
SS
df
MS
F
p-value
Regression
199.0083
1
199.0083
105.79
.0001
Residual
9.4060
5
1.8812
Total
208.4143
6
Regression output
confidence interval
variables
coefficients
std. error
t (df=5)
p-value
95% lower
95% upper
Intercept
4.6768
1.0334
4.526
.0063
2.0203
7.3332
Income
0.1613
0.0157
10.285
.0001
0.1210
0.2016
Predicted values for: deduction
95% Confidence Interval
95% Prediction Interval
Income
Predicted
lower
upper
lower
upper
Leverage
52.5
13.1455
11.8006
14.4904
9.3720
16.9191
0.146
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