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 Weekly Gross Televison Newspaper Advertising Advertising Revenue ($1000s) ($1000s) ($1000s) 96 5 1.5 91 3 96 5 2.5 92 2.5 2.5 95 3 4.3 95 3.5 3.3 94 2,5 4.2 94 3 3.5 a. Use o0.01 to test the hypotheses Ho BB0 H A and/or Bis not equal to zero for the model yB 22, where ntelevision advertising ($1000s) newspaper advertising ($1000s) Compute the F test statistic (to 2 decimals). Use F table What is the p-value? Y Select your answer What is your conclusion? -Select your answer- b. Use a 0.05 to test the significance of 8. Compute the t test statistic (to 2 decimals). Use t table What is the p-value? Select your answer What is your conclusion? Select your answer- be dropped from the model? Should Select your answer c. Use a 0.05 to test the significance of B. Compute the t test statistic (to 2 decimals). Use t table What is the p-value? -Select your answer What is your conclusion? Select your answer be dropped from the model? Should Select your answer

Answer 1

Output using excel:

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.976659
R Square	0.953863
Adjusted R Square	0.935408
Standard Error	0.459431
Observations	8
ANOVA
	df	SS	MS	F	Significance F
Regression	2	21.81962	10.90981	51.68648	0.000457
Residual	5	1.055383	0.211077
Total	7	22.875
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	84.13824	1.221685	68.87063	1.22E-08	80.99779	87.27868
Tv Ads	1.932654	0.191703	10.08151	0.000164	1.439866	2.425442
Newspaper Ads	1.156402	0.231692	4.991128	0.004136	0.56082	1.751984

a) F Test statistic:

F = 51.69

p-value = 0.0005

Conclusion:

Reject the null hypothesis. It is significant.

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b) Test statistic for β₁:

t = 10.08

p-value = 0.0001

Conclusion:

Reject the null hypothesis. It is significant.

No, x1 should not be dropped from the model.

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c) t = 4.99

p-value = 0.0041

Conclusion:

Reject the null hypothesis. It is significant.

No, x2 should not be dropped from the model.