Corporate Profits In order to study the relationship of advertising and capital inve...

Corporate Profits In order to study the relationship of advertising and capital investment with 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, 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 α = .01.

c. Does advertising expenditure x2 contribute significant information for the prediction of y, given that x1 is already in the model? Use α = .01.

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