SUMMARY OUTPUT Regression Statistics Multiple R 0820245 R Sq

SUMMARY OUTPUT

Regression Statistics

Multiple R

0.820245

R Square

0.672803

Adjusted R Square

0.615899

Standard Error

43.07516

Observations

28

ANOVA

df

SS

MS

F

Significance F

Regression

4

87752.51

21938.13

11.82349

2.3E-05

Residual

23

42675.8

1855.469

Total

27

130428.3

Coefficients

Standard Error

t Stat

P-value

Lower 95%

Upper 95%

Intercept

1830.418

109.007

16.79175

2.1E-14

1604.92

2055.916

Month

-0.91687

1.0523

-0.87131

0.392592

-3.09372

1.259974

Price

-32.9522

7.179249

-4.58993

0.000129

-47.8036

-18.1008

Advertising

13.05076

5.353861

2.437635

0.022927

1.975451

24.12606

Interest Rate

-14.0638

2.969979

-4.73531

9E-05

-20.2076

-7.9199

Using above Summery

If at current prices and interest rates, each additional sales dollar contributes $0.18 to profit before advertising and taxes, should the firm continue to advertise? Why or why not? Discuss.   Hint: You need the relation between advertising and sales.  

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.820245
R Square	0.672803
Adjusted R Square	0.615899
Standard Error	43.07516
Observations	28
ANOVA
	df	SS	MS	F	Significance F
Regression	4	87752.51	21938.13	11.82349	2.3E-05
Residual	23	42675.8	1855.469
Total	27	130428.3
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	1830.418	109.007	16.79175	2.1E-14	1604.92	2055.916
Month	-0.91687	1.0523	-0.87131	0.392592	-3.09372	1.259974
Price	-32.9522	7.179249	-4.58993	0.000129	-47.8036	-18.1008
Advertising	13.05076	5.353861	2.437635	0.022927	1.975451	24.12606
Interest Rate	-14.0638	2.969979	-4.73531	9E-05	-20.2076	-7.9199

Solution

If at current prices and interest rates, each additional sales dollar contributes $0.18 to profit before advertising and taxes, should the firm continue to advertise?

the firm continue to adverstise because you have a coefficient greater in the relation between advertising and sales