Q31 A microeconomist wants to determine how corporate sales

Q31. A microeconomist wants to determine how corporate sales are influenced by capital and wage spending by companies. She proceeds to randomly select 26 large corporations and record information in millions of dollars. The Microsoft Excel output below shows results of this multiple regression. One company in the sample had sales of $21.439 billion (Sales = 21,439). This company spent $300 million on capital and $700 million on wages. What is the residual (in millions of dollars) for this data point ?

Solution

predict= 15800+0.1245*300+7.0762*700 = 20790.69

So the residual = 20790.69-21439 = -648.31