Interpretation of Regression Data
Not what you're looking for?
PLEASE HELP ON HOW TO ARRIVE ON THIS PROBLEM
Unsafe Insurance Company needs to forecast its personnel department costs. The following output was obtained from a regression program used to estimate the department's costs as a function of the number of employees:
SUMMARY OUTPUT
Dependent variable = Personnel costs
Regression Statistics
R-square 0.7255
Standard error 612.0926
Observations 24
Standard
Independent Variable Coefficients Error T-Statistic
Intercept 8,421.441 2,687.979 3.133
Employees 492.703 164.949 2.987
Monthly data for the past two years were used to construct these estimates. Cost relationships are
expected to be the same for the coming period.
Required
a. What are the estimated personnel costs for 4,200 employees?
b. (Appendix A) How confident are you that a significant cost-driver relation exists?
See attached file for full problem description.
Purchase this Solution
Solution Summary
This solution calculates the regression equation, personnel cost and value of r-square. A conclusion is made about if the data set is significant and all steps are shown with brief explanations.
Solution Preview
You have not provided the unit of number of employees used in regression equation. I hope it is in units and solving assuming that. If it is in thousands make suitable adjustments.
The regression line ...
Purchase this Solution
Free BrainMass Quizzes
Introduction to Finance
This quiz test introductory finance topics.
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.