15. Corporate Profits To study the relationship of advertising and capital investment to corporate profits, the following data, recorded in units of

$100,000, were collected for 10 medium-sized firms in the same year. The variable y represents profit for the year, 1 x represents capital investment, and 2 x represents advertising expenditures.

a. Using the model

and an appropriate computer software package, find the least-squares prediction equation for these data.

b. Use the overall F-test to determine whether the model contributes significant information for the prediction of y. Use a 5.01.

c. Does advertising expenditure 2 x contribute significant information for the prediction of y, given that 1 x is already in the model? Use a 5.01.

d. Calculate the coefficient of determination, R2. What percentage of the overall variation is explained by the model?

Transcribed Image Text:

x 2 y x 1 20 16 12 18 15 13 6 2 16 y 15 16 25 X5-6 232 30 12 29 1 x 453-2 04542