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To encourage performance, loyalty, and continuing education, the human resources department at a large company wants to develop a regression-based compensation model for mid-level managers

To encourage performance, loyalty, and continuing education, the human resources department at a large company wants to develop a regression-based compensation model for mid-level managers based on three variables: business unit-profitability in $1,000s(Profit), years with company(Years), and a dummy variable(Grad)which takes on 1 when the individual holds a graduate degree in a relevant field and 0 otherwise. Data have been collected for 36 managers. The sample regression equation is= 13,260.50 + 14.62Profit+ 1,867.00Years+ 45,121.03Grad 0.1531ProfitGrad 198.05YearsGrad. Which of the following is the difference in the predicted compensations for two managers, one having a graduate degree, the other one not, both having 10 years with the company, and having the same business-unit profit of $3,000,000?

Group of answer choices

A) $420,007.17

B) $422,261.97

C) $426,786.18

D) $42,681.23

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