Question

1. The owner of Showtime Movie Theaters, Inc. would like to estimate weekly gross revenue as a function of advertising expenditures. Historical data for a sample of eight weeks follow.

Weekly Gross	Television	Newspaper	Radio
Revenue	Advertising	Advertising	Advertising
($1000s)	($1000s)	($1000s)	($1000s)
96	5	1.5	0.3
90	2	2	0.2
95	4	1.5	0.3
92	2.5	2.5	0.1
95	3	3.3	0.4
94	3.5	2.3	0.4
94	2.5	4.2	0.3
94	3	2.5	0.3

1. Use the F test to determine the overall significance of the relationship. What is the conclusion at the .05 level of significance?
2. Use the t test to determine the significance of each independent variable. What is your conclusion at the .05 level of significance?
1. Determine the sample correlation coefficient between all possible pairs of independent variables to measure multicollinearity. Is there any value high enough to predict any potential problem in the regression model? Explain

PLEASE SHOW HOW TO DO IN EXCEL. Thank you!

Answer 1

SOLUTION A] NULL HYPOTHESIS H0: THERE IS NO OVERALL SIGNIFICANCE OF THE RELATIONSHIP.

ALTERNATIVE HYPOTHESIS HA: THERE IS OVERALL SIGNIFICANCE OF THE RELATIONSHIP.

LEVEL OF SIGNIFICANCE= 0.05

FSTAT= 18.38

PVALUE=0.00838

SINCE P VALUE SMALLER THAN THE LEVEL OF SIGNIFICANCE THEREFORE SIGNIFICANCT.

DECISION: REJECT NULL HYPOTHESIS H0.

CONCLUSION: WE HAVE SUFFICIENT EVIDENCE TO CONCLUDE THAT THERE IS overall significance of the relationship..

SOLUTION B] NULL HYPOTTHESIS H0:

ALTERNATIVE HYPOTHESIS Ha:

LEVEL OF SIGNIFICANCE =0.05

t stat= coefficient of b1/S.E

= 2.08/0.39

= 5.31

P value=0.006

Since P value smaller than 0.05 therefore SIGNIFICANT

DECISION: REJECT H0.

CONCLUSION: WE HAVE SUFFICIENT EVIDENCE TO SHOW THAT THE TV ADVERTISNG IS SIGNIFICANT.

NULL HYPOTHESIS H0:

ALTERNATIVE HYPOTHESIS Ha:

LEVEL OF SIGNIFICANCE =0.05

t stat= coefficient of b2/S.E

= 1.12/0.38

= 2.93

P value=0.043

Since P value smaller than 0.05 therefore SIGNIFICANT

DECISION: REJECT H0.

CONCLUSION: WE HAVE SUFFICIENT EVIDENCE TO SHOW THAT THE NEWSPAPER ADVERTISNG IS SIGNIFICANT.

NULL HYPOTHESIS H0:

ALTERNATIVE HYPOTHESIS Ha:

LEVEL OF SIGNIFICANCE =0.05

t stat= coefficient of b3/S.E

= 2.84/3.20

= 0.888

P value=0.425

Since P value GREATER THAN 0.05  therefore SIGNIFICANT

DECISION: DO NOT  REJECT H0

CONCLUSION: WEDO NOT HAVE SUFFICIENT EVIDENCE TO SHOW THAT THERE IS SIGNIFICANT EFFECT OF RADIO ADVERTSING.

SOLUTION C]

NO THERE IS NO HIGH CORRELATED VALUE OF CORELATION .