Question: Use the following for questions 5 - 6: A random sample of 40 companies on the Forbes 500 list was selected and the relationship between


Use the following for questions 5 - 6: A random sample of 40 companies on the Forbes 500 list was selected and the relationship between sales (in hundreds of thousands of dollars) and profits (in hundreds of thousands of dollars) was investigated using regression. A least-squares regression line was fitted to the data using statistical software, with sales as the explanatory variable and profits as the response variable. Here is the output from the software: Dependent variable is Profits R-squared - 66.2% 8 - 466.2 with 40 - 2 - 38 degrees of freedom Variable Coefficient s.e. of Coefficient P-value Constant -176 . 644 61.16 0. 0050 Sales 0. 092498 0. 0106 50. 0001 5. Which of the following is an appropriate interpretation of the number 0.092498? (a) An increase in profits of $100,000 increases predicted sales by $9,249.80. (b) An increase in sales of $100,000 increases predicted profits by $9,249.80. (c) Sales of $100,000 correspond to predicted profits of $9,249.80. (d) The ratio of predicted profit to observed profit is, on average, 0.092498. (e) The ratio of predicted profits to observed sales is, on average, 0.092498
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
