a Develop an estimated regression equation with the amount o

a.  Develop an estimated regression equation with the amount of television advertising as the independent variable.

b.  Develop an estimated regression equation with both television advertising and newspaper advertising as the independent variables.

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

d.  Predict the weekly gross revenue for a week when $3500 is spent on television advertising and $1800 is spent on newspaper advertising?

If possible, please show in excel form, Thank You!!

Solution

a) An estimated regression equation with the amount of television advertising as the independent variable.

Regression Analysis: GR versus Tel

The regression equation is
GR = 88.6 + 1.60 Tel

Predictor Coef SE Coef T P
Constant 88.638 1.582 56.02 0.000
Tel 1.6039 0.4778 3.36 0.015

S = 1.21518 R-Sq = 65.3% R-Sq(adj) = 59.5%

b) An estimated regression equation with both television advertising and newspaper advertising as the independent variables.

Regression Analysis: GR versus Tel, New

The regression equation is
GR = 83.2 + 2.29 Tel + 1.30 New

Predictor Coef SE Coef T P
Constant 83.230 1.574 52.88 0.000
Tel 2.2902 0.3041 7.53 0.001
New 1.3010 0.3207 4.06 0.010

S = 0.642587 R-Sq = 91.9% R-Sq(adj) = 88.7%

c) Estimated regression coeffient for television advertising expenditures in part (a) is 1.6039

and estimated regression coeffient for television advertising expenditures in part (a) is 2.2902

Television in part a is playing a positive role i.e a unit increase in television is increasing gross revenue by 1.6039

Whereas Television in part b is playing a positive role i.e a unit increase in television is increasing gross revenue by 2.2902.

Coeffient of television is increasing in part b as by adding newspaper it is contributing more towards the estimation of gross revenue.

d) Estimate of weekly gross revenue when tel = 3.5 and new = 1.8

est(GR) = 83.2 + 2.29*(3.5)+ 1.30*(1.8) = 83.2 + 8.015 + 2.34 = 93.555

Therefore, estimate of weekly gross revenue is 93.555