5.(20 marks)

Newton Company used linear regression analysis to obtain the following output:

Payroll Department Cost

Explained by Number of Employees

Constant $5,800

Standard error of Y estimate 630

r2 0.8924

Number of observations 20

X coefficient $1.902

Standard error of coefficient 0.0966

Required:

1. What is the coefficient of determination? Comment on the goodness of fit.
2. How would set up the regression equation? Show it with analysis.