Problem (simple linear regression). McDonald’s Corporation reported total revenues (X) and net profits (Y) from 1998...

Problem (simple linear regression). McDonald’s Corporation reported total revenues (X) and net profits (Y) from 1998 to 2005. Using 2-var statistics, we get:

x-average=15.86; standard deviation of X =2.82; y-average=1.795, standard deviation of Y=0.5278; n=8 (from 1998 to 2005). Sum of squared X=2067.50, sum of squared Y=27.73, and sum of the product of X and Y =233.28.

The least-square regression is

Y (net profit) =0.2107+0.0999X (total revenue), with ESS=1.3965, and standard error of estimate (S_y,x)=0.4824.

For one year with total revenue of 18.0, what is the 95% confidence interval for the net profit?
Compute the coefficient of determination, r-square , and interpret its meaning in the context of the problem.
Testing the hypothesis that the slope could be 0 at 0.10 level of significance.
Conduct the ANOVA F-test to the overall validity of the regression analysis. Use 0.10 level of significance.

Expert Solution

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Problem (simple linear regression). McDonald’s Corporation reported total revenues (X) and net profits (Y) from 1998...

Problem (simple linear regression). McDonald’s Corporation reported total revenues (X) and net profits (Y) from 1998 to 2005. Using 2-var statistics, we get: x-average=15.86; standard deviation of X =2.82; y-average=1.795, standard deviation of Y=0.5278; n=8 (from 1998 to 2005). Sum of squared X=2067.50, sum of squared Y=27.73, and sum of the product of X and Y =233.28. The least-square regression is Y (net profit) =0.2107+0.0999X (total revenue), with ESS=1.3965, and standard error of estimate (Sy,x)=0.4824. For one year with total...

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Problem (simple linear regression). McDonald’s Corporation reported total revenues (X) and net profits (Y) from 1998...

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