Question

A statistical program is recommended.

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 ($1,000s)	Television Advertising ($1,000s)	Newspaper Advertising ($1,000s)
96	5.0	1.5
90	2.0	2.0
95	4.0	1.5
92	2.5	2.5
95	3.0	3.3
94	3.5	2.3
94	2.5	4.2
94	3.0	2.5

a) Predict weekly gross revenue (in dollars) for a week when $3,300 is spent on television advertising and $1,500 is spent on newspaper advertising. (Round your answer to the nearest cent.)

$

b) Predict weekly gross revenue (in dollars) for a week when $3,500 is spent on television advertising and $1,300 is spent on newspaper advertising. (Round your answer to the nearest cent.)

$  

Answer 1

Solution:

Perfrom multiple regression in excel

Install analysis toolpak in excel

Go to data>Data anlaysis >Regression

select Y as weekly gross revenue

X as Television and Newspaper Ad

click ok

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.958663
R Square	0.919036
Adjusted R Square	0.88665
Standard Error	0.642587
Observations	8
ANOVA
	df	SS	MS	F	Significance F
Regression	2	23.43541	11.7177	28.37777	0.001865
Residual	5	2.064592	0.412918
Total	7	25.5
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	83.23009	1.573869	52.88248	4.57E-08	79.18433	87.27585
Television Advertising	2.290184	0.304065	7.531899	0.000653	1.508561	3.071806
Newspaper Advertising	1.300989	0.320702	4.056697	0.009761	0.476599	2.125379

we get

Weekly gross revenue=83.23009+2.290184*Tv+1.300989*Newspaper

Solution-A:

given tv=3300=3300/1000=3.3

newspaper=1500=1500/1000=1.5

weekly gross revenue=83.23009+2.290184*3.3+1.300989*1.5

=92.73918

=92.73918*1000

=92739.18

$92739.18

Solution-b;

given tv=3500=3500/1000=3.5

newspaper=1300=1300/1000=1.3

weekly gross revenue=83.23009+2.290184*3.5+1.300989*1.3

=92.93702

=92.93702*1000

= 92937.02

$92937.02