Question

The owner of Showtime Movie Theaters, Inc., would like to predict weekly gross revenue as a function of advertising expenditures. Historical data for a sample of eight weeks follow has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. Use a = .01 to test the hypotheses for the model y = Bo + 1101 + $2@2 + E, where: Ho: B1 = B2 = 0 Ha: B1 and/or B2 #0 Compute the F test statistic (to 2 decimals). What is the p-value? ? Less than .01 Between .01 and .025 Between .025 and .05 Between .05 and 10 Greater than 10

Answer 1

Solution:

We can use the excel regression data analysis tool to find the answer to the given questions. The excel output is given below:

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.97347
R Square	0.94765
Adjusted R Square	0.92671
Standard Error	0.44455
Observations	8
ANOVA
	df	SS	MS	F	Significance F
Regression	2	17.8869	8.9434	45.2544	0.0006
Residual	5	0.9881	0.1976
Total	7	18.875
	Coefficients	Standard Error	t Stat	P-value	Lower 99.0%	Upper 99.0%
Intercept	85.7533	1.0817	79.2782	0.0000	81.3918	90.1147
Television Advertising ($1000s)	1.7538	0.1869	9.3844	0.0002	1.0003	2.5074
Newspaper Advertising ($1000s)	1.0352	0.2321	4.4604	0.0066	0.0994	1.9711

a. Use a .01 to test the hypotheses for the model y Po + B11 + B2a2 + €, where: Ho: P1 B20 Ha: 1 and/or 2 #0 Compute the F test statistic (to 2 decimals) 45.25 What is the p-value? less than .01 Less than .01 Between .01 and .025 Between .025 and .05 Between .05 and .10 Greater than 10 What is your conclusion? The regression equation is significant b. Use a .05 to test the significance of B. Compute the t test statistic (to 2 decimals) 9.38 What is the p-value? less than .01 or less than 0.05 What is your conclusion? significant Should be dropped from the model? No c. Use a 05 to test the significance of B2. Compute the t test statistic (to 2 decimals) 4.46

What is the p-value? less than .01 or less than 0.05 What is your conclusion? Significant Should 2 be dropped from the model? No d. The owner plans to spend (in $1000s) $5.4 on television advertising and $3.9 on newspaper advertising. What is the expected revenue (in $1000s) for this advertising combination (to the nearest whole number)? 99 y 85.7533(17538x 5.4)+(1.0352 x3.9) = 99.26 99