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Global test for a hypothetical company

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Where appropriate, always use an alpha of .05, always use the one tail test, always use a confidence interval of 95%, and assume Z = 1.96 in formulas for confidence interval calculations and sample size calculations.

The above table represents a random sample of 16 chemical plants that depict their 1967 annual profit, the number of employees, the number of consecutive stock dividends paid, and the value of inventory at the start of the year. Use these data to perform the following multiple correlation and regression questions.

Calculate the regression equation using all of the independent variables.

Using a global test, determine if the equation generates useful estimates of the dependent variable?

Test each independent variable. Identify any that should be eliminated.
If necessary, recalculate the regression equation and record it here.

Using the following information, estimate the profit of a hypothetical company: 600 Employees, 100 Consecutive Dividends, and a Beginning Inventory of $9,000,00.

Explain what the Coefficient of Determination is telling us.


Solution Summary

The solution performs the hypothesis test.