Question

The managerial salaries in a real estate company are linked with the number of units sold. The company decided to use regression analysis to predict mean salaries at different sale levels. The researcher would like to examine the relationship between salary and the units sold and its significance. He prepared the following model for predicting salary based on different sale levels.

Y = β0 + β1X + ε       where             X = Unit sold             and

Y= Salary

Salary (AED)	Units Sold
37,950.00	15
32,890.00	11
22,195.00	2
27,140.00	5
36,800.00	9
24,265.00	8
30,820.00	6
40,250.00	14
44,390.00	21
42,205.00	16
23,690.00	7
24,955.00	2
18,055.00	1
48,070.00	20

1. Estimate the parameters β0 and β1 in the above equation by using EXECL software.

2. Estimate the Coefficient of determination R² in the Excel software.

3. What is the Correlation Coefficient r²?

4. What is the prediction equation?

5. What is estimated salary if the units sold are 25?

Note : Answers should be in Excel or Word Format

Answer 1