Question

Use computer software packages, such as Minitab or Excel, to solve this problem. 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	Television	Newspaper
Gross Revenue	Advertising	Advertising
($1,000s)	($1,000s)	($1,000s)
96	5.0	1.5
90	2.0	2.0
95	4.0	1.5
92	2.5	2.5
95	3.0	3.3
94	3.5	2.3
94	2.5	4.2
94	3.0	2.5

a. Develop an estimated regression equation with the amount of television advertising as the independent variable (to 1 decimal).

b. Develop an estimated regression equation with both television advertising and newspaper advertising as the independent variables (to 2 decimals).

c. Is the estimated regression equation coefficient for television advertising expenditures the same in part (a) and in part (b)?

d. Predict weekly gross revenue for a week when 3.5 thousand is spent on television advertising and 1.8 thousand is spent on newspaper advertising?

NOTE: To compute the predicted revenues, use the coefficients you have computed rounded to two decimals, as you have entered them here. Then, also round your predicted revenue to two decimal places. in thousands

Answer 1

Y(hat)= 88.6+1.6*TV Advertising

b)

Estimated regression equation

y(hat)= 83.23+2.29*TV ADVERTISING+1.30* NEWS PAPER ADVERTISING.

c) NO. the estimated regression equation coefficient for television advertising expenditures is NOT same in part (a) and in part (b).

d) Y(hat)= 83.23+2.29*TV ADVERTISING+1.30* NEWS PAPER ADVERTISING.

T.V ADVERTISING =3.5

NEWS PAPER ADVERTISING= 1.8

Y(hat)= 83.23+2.29*3.5+1.30* 1.8

Y(hat)= $ 93.58 in thousands