Question: A linear regression analysis has produced the following equation relating profits to hours of managerial time spent developing the past years projects of a firm:

A linear regression analysis has produced the following equation relating profits to hours of managerial time spent developing the past year’s projects of a firm:

Profits = −$957 + $85 × Number of hours

a. What is the managerial interpretation of these regression coefficients?

b. What is the break-even point?

c. What is the managerial interpretation if the r 2

= 0.25 and the t-stat for the slope coefficient is 4.71?

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