Question

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 Gross Revenue ($1000s)	Televison Advertising ($1000s)	Newspaper Advertising ($1000s)
97	5	1.5
90	2	3
96	4	2.5
93	3.5	2.5
96	3	4.3
94	3.5	2.3
95	2.5	5.2
95	3	3.5

a. Use  to test the hypotheses

and/or  is not equal to zero

for the model , where

television advertising

newspaper advertising

Compute the  test statistic (to 2 decimals). Use F table.

What is the -value?

- Select your answer -less than .01between .01 and .025between .025 and .05between .05 and .10greater than .10Item 2

What is your conclusion?

- Select your answer -The overall model is not significantThe overall model is significantItem 3

b. Use  to test the significance of . Compute the  test statistic (to 2 decimals). Use t table.

What is the -value?

- Select your answer -less than .01between .01 and .02between .02 and .05between .05 and .10between .10 and .20between .20 and .40greater than .40Item 5

What is your conclusion?

- Select your answer -No significant relationship between television advertising and revenueSignificant relationship between television advertising and revenueItem 6

Should  be dropped from the model?

- Select your answer -No, x1 should not be dropped from the modelYes, x1 should be dropped from the modelItem 7

c. Use  to test the significance of . Compute the  test statistic (to 2 decimals). Use t table.

What is the -value?

- Select your answer -less than .01between .01 and .02between .02 and .05between .05 and .10between .10 and .20between .20 and .40greater than .40Item 9

What is your conclusion?

- Select your answer -No significant relationship between newspaper advertising and revenueSignificant relationship between newspaper advertising and revenueItem 10

Should  be dropped from the model?

Answer 1

By using MS EXCEL:-

A] NULL HYPOTHESIS H0: MODEL IS NOT SIGNIFICANT.

ALTERNATIVE HYPOTHESIS Ha: MODEL IS SIGNIFICANT.

test statistic F= 32.02

P value=0.00 ( -less than .01)

Conclusion: The overall model is significant.

B] NULL HYPOTHESIS H0:

ALTERNATIVE HYPOTHESIS Ha:

Test statistic t= 8.00

P VALUE : -less than .01.

CONCLUSION: No, x1 should not be dropped from the model

C] NULL HYPOTHESIS H0:

ALTERNATIVE HYPOTHESIS Ha:

Test statistic t= 5.63

P VALUE : -less than .01.

CONCLUSION: No, x2. should not be dropped from the model