Question

Pursuing an MBA is a major personal investment. Tuition and expenses associated with business school programs are​ costly, but the high costs come with hopes of career advancement and high salaries. A prospective MBA student would like to examine the factors that impact starting salary upon graduation and decides to develop a model that uses program​ per-year tuition as a predictor of starting salary. Data were collected for 37 ​full-time MBA programs offered at private universities. The data are stored in the accompanying table. Complete parts​ (a) through​ (e) below.

Program Per-Year Tuition ($)   Mean Starting Salary Upon Graduation ($)
62819   155545
67626   154421
67248   144605
68422   141104
65939   141505
65405   155568
65378   150401
69274   150335
63663   136628
61705   144381
65343   143780
61518   144406
60295   141427
55529   141064
55657   127344
55323   118248
56080   129000
51034   132140
54086   131430
49479   120239
47215   111660
46724   110606
50113   112649
47289   109258
37782   77250
48907   81605
47979   99752
51165   75437
38609   87699
32086   75448
42334   77396
41497   50719
48955   65717
34440   99616
23530   57795
40494   82293
40472   54020

Assuming a linear​ relationship, use the​ least-squares method to determine the regression coefficients b0 and b1.

b0=

b1=

Interpret the meaning of the​ slope, b1 in this problem. Select the correct choice below and fill in the answer box to complete your choice.

​(Round to the nearest dollar as​ needed.)

a. The approximate starting salary upon graduation when the tuition is​ $0 is

b. For each increase in tuition of​ $100, the mean starting salary upon graduation is expected to increase by

c. The approximate tuition when the mean starting salary is​ $0 is

d. For each increase in starting salary upon graduation of​ $100, the mean tuition is expected to increase by

Predict the mean starting salary upon graduation for a program that has a​ per-year tuition cost of

The predicted mean starting salary will be

Answer 1

b0=-13015

Interpretation: If zero amount is spend as Tuition fees, salary becomes negative, which is absurd.

b1=2.428

Interpretation: With one dollar increase in Tuition fees, salary is expected to increase by an amount of 2.428 (dollars).

a. The approximate starting salary upon graduation when the tuition is​ $0 is -13015 (in dollars) (it is absurd)

b. For each increase in tuition of​ $100, the mean starting salary upon graduation is expected to increase by 242.8=243 (dollars)

c. The approximate tuition when the mean starting salary is​ $0 is  5360.379=5360 dollars

d. For each increase in starting salary upon graduation of​ $100, the mean tuition is expected to increase by 41.18616=41 dollars

last question: Predict the mean starting salary upon graduation for a program that has a​ per-year tuition cost of ?? missing.

I shall compute if the missing value is supplied using the

Regression Equation

Salary = -13015 + 2.428 Tuition fees