SUMMARY OUTPUT Regression Statistics Multiple R 0.820245 R Square 0.672803 Adjus
ID: 3398341 • Letter: S
Question
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.820245
R Square
0.672803
Adjusted R Square
0.615899
Standard Error
43.07516
Observations
28
ANOVA
df
SS
MS
F
Significance F
Regression
4
87752.51
21938.13
11.82349
2.3E-05
Residual
23
42675.8
1855.469
Total
27
130428.3
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Intercept
1830.418
109.007
16.79175
2.1E-14
1604.92
2055.916
Month
-0.91687
1.0523
-0.87131
0.392592
-3.09372
1.259974
Price
-32.9522
7.179249
-4.58993
0.000129
-47.8036
-18.1008
Advertising
13.05076
5.353861
2.437635
0.022927
1.975451
24.12606
Interest Rate
-14.0638
2.969979
-4.73531
9E-05
-20.2076
-7.9199
Using above Summery
If at current prices and interest rates, each additional sales dollar contributes $0.18 to profit before advertising and taxes, should the firm continue to advertise? Why or why not? Discuss. Hint: You need the relation between advertising and sales.
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.820245
R Square
0.672803
Adjusted R Square
0.615899
Standard Error
43.07516
Observations
28
ANOVA
df
SS
MS
F
Significance F
Regression
4
87752.51
21938.13
11.82349
2.3E-05
Residual
23
42675.8
1855.469
Total
27
130428.3
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Intercept
1830.418
109.007
16.79175
2.1E-14
1604.92
2055.916
Month
-0.91687
1.0523
-0.87131
0.392592
-3.09372
1.259974
Price
-32.9522
7.179249
-4.58993
0.000129
-47.8036
-18.1008
Advertising
13.05076
5.353861
2.437635
0.022927
1.975451
24.12606
Interest Rate
-14.0638
2.969979
-4.73531
9E-05
-20.2076
-7.9199
Explanation / Answer
If at current prices and interest rates, each additional sales dollar contributes $0.18 to profit before advertising and taxes, should the firm continue to advertise?
the firm continue to adverstise because you have a coefficient greater in the relation between advertising and sales
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