John Wood, a financial analyst for a major automobile corporation, has been monitoring the funds used in
Question:
Regression equations and supporting statistical values developed for the various relationships between variables are as follows:
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where the notations used in the equations are as follows:
A = advertising funds in $100,000
R = funds for factory rebates in $1,000,000
D = customer sales demand (automobiles sold) in 10,000 units
The appropriate t values for use in determining confidence intervals are as follows:
50% confidence .......................... 0.69
95% confidence .......................... 2.07
Required:
(1) Assuming the corporation is projecting advertising expenditures amounting to $1,500,000 and factory rebate expenditures amounting to $12,000,000 for the next time period, calculate expected customer demand in units using:
(a) Equation 1
(b) Equation 2
(2) Assume that equation 4 is employed to estimate a total customer demand of 104,160 automobiles for a time period. Using a 50% confidence level, determine the range of automobile sales that could occur during the time period.
(3) Select the regression equation that would be most advantageous to predict customer sales demand and explain why it is the best.
(4) Explain the significance of equation 3 and how it may be used in evaluating equation 4.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
1 a D 2455 1881500000 100000 10000 units 2455 282 10000 units 5275 10000 units 52750 units b D 2491 ...View the full answer
