Question

PLEASE ANSWER. WILL GIVE THUMBS UP.

The regression equation NetIncome = 2,372 + 0.0303 Revenue was estimated from a sample of 100 leading world companies (variables are in millions of dollars).

(a-1)

Calculate the residual for the x, y pair ($49,145, $4,406). (A negative value should be indicated by a minus sign. Round your answer to 4 decimal places.)

  

Residual

(a-2)	Did the regression equation underestimate or overestimate the net income?
	The regression equation underestimated the net income. The regression equation overestimated the net income.

(b-1)

Calculate the residual for the x, y pair ($63,360, $4,134).(A negative value should be indicated by a minus sign. Round your answer to 4 decimal places.)

   

Residual

(b-2)	Did the regression equation underestimate or overestimate the net income?
	The regression equation overestimated the net income. The regression equation underestimated the net income.

Answer 1

net income = y

revenue = x

the regression equation is:-

y = 2372 + 0.0303x

a-1).the predicted value when x=4406 is:-

= 2372 + (0.0303 * 49145)

= $ 3861.0935

the residual of ($49,145, $4406) is:-

= observed - expected

= 4406 - 3861.0935

= 544.9065

a-2).The regression equation underestimated the net income.

b-1).the predicted value when x=63360 is:-

= 2372 + (0.0303 * 63360)

= $ 4291.808

the residual of ($63360,$4134) is:-

= observed - expected

= 4134 - 4291.808

= -157.808

b-2).The regression equation overestimated the net income.

*** if you have any doubt regarding the problem please write it in the comment box.if you are satisfied please give me a LIKE if possible...