Question

# A business is evaluating their advertising budget, and wishes to determine the relationship between advertising dollars...

A business is evaluating their advertising budget, and wishes to determine the relationship between advertising dollars spent and changes in revenue. Below is the output from their regression.

 SUMMARY OUTPUT
 Regression Statistics
 Multiple R 0.95 R Square 0.90 Adjusted R Square 0.82 Standard Error 0.82 Observations 8 ANOVA df SS MS F Significance F Regression 3 23.188 7.729 11.505 0.020 Residual 4 2.687 0.672 Total 7 25.875 Coefficients Std Error t Stat P-value Lower 95% Upper 95% Intercept 83.91 2.03 41.36 0.00 78.28 89.54 TV (\$k) 1.96 0.48 4.10 0.01 0.63 3.29 Radio (\$k) 0.76 0.47 1.64 0.18 -0.53 2.05 Newspaper (\$k) 1.76 1.93 0.91 0.41 -3.60 7.11

Select one:

a. Multiple R

b. TV

d. Newspaper

e. Regression

f. Residual

Solution:

Here we have to find the advertising method provides the most additional revenue per dollar spent?

Here we know that the multiple linear regression is like

Y = a + b1 * x1 + b2 * x2 + b3 * x3

If there are three variables

Where b1 : additional revenue per dollar spent by TV

b2 : additional revenue per dollar spent by rafir

b3 : additional revenue per dollar spent by newspaper

The most affect on factor on revenue is b1 because coefficient of x1( i.e. b1 = 1.96 ) is more than others

Therefore option TV is correct

Thank You..!!

#### Earn Coins

Coins can be redeemed for fabulous gifts.

##### Need Online Homework Help?

Most questions answered within 1 hours.