Question

Problem 8.11 An advertising agency is trying to convince new customers about the positive effect of advertising expenditures on sales. He knows that the economy also impacts sales, but he wants to create a model that evaluates both advertising and the economic factor using unemployment. He gathers data from multiple customers regarding sales, advertising expenditures and unemployment rate in the area. Data from his analyses are shown below. Use a 90% confidence level unless otherwise specified. 195 pr8 11 Excel New Tab Insert Page Layout Formulas Data Review ViewACROBAT Cut Ea Copy : Conditional Formatting 闣Menge & Center . | $ . % , Format Partei Forl Number EXSUMMARY OUTPUT A1 MMARY OUTP T ression Statistics 4 Multiple R 5 R Square Adjusted R Square 7 Standard Error 8 Observations 10 ANOVA Regression 72.6374 13 Residual 14 Total 130.681 15 rd Error 16 .98174.3966 0.0006 17 Intercept 17.5060 0.2997 2.2955 0.0377 00068 3.9322 0.0015 18 Price -0.6879 0.0266 19 Promotion Promotion 77.82 Mean 3.88 Mean 2.65 Sample Variance 265.24 Sample v 59 Minimum Minimum 99 Maximum 26 Maximumm Sum Count 4 Count 28 calculations no data

Answer 1

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We can conclude that promotion has a positive effect on sales as the t-value is also significant.