Linear Regression Project in Excel
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For each of the two majors:
1. Create a scatter diagram of Y = 'Annual % ROI' against X = 'Cost'. Include the trendline and the coefficient of determination right on the graph. See Week 1 hints for assistance.
2. Calculate the estimated 'Annual % ROI' when the 'Cost' (X) is $160,000. Show your work.
3. Conduct a full hypothesis test using the p value method: You will be in charge. Set your own logical significance level. State it. Claim: There is a relationship between cost and Annual %ROI. The hypotheses are given but you must also state them. Make sure all the steps of hypothesis testing are present. Revisit Week 6 if you are unsure. I would suggest following the template in Week 6 Assignment, #2.
• H0: β1 = 0
• Ha: β1 ≠ 0
4. For this last activity in #3, you are going to use a word template that you could also use in your final paper to present all the hypothesis tests we did in Weeks 6 and 7. (I absolutely recommend this practice) Remember, this is a word template, so words, not symbols should be used. This is because the final product is a paper of interpretation, and β1 = 0 won't mean a lot to the reader, but "the slope is zero so there is no relationship" will be much more readily understood.
Template: In Week _____, I ran a hypothesis test to determine if _____________________________________. My null hypothesis was ___________________. The results of the test indicated that I should ______________________ the null hypothesis which means that ______________________.
Here are a few examples of how the template works: (These are fake examples - you need to use your real conclusions).
Example A: In Week 28, I ran a hypothesis test to determine if the cost of an accounting degree was 1 million dollars. My null hypothesis was that the cost of an accounting degree was 1 million dollars. The results of the test indicated that I should reject the null hypothesis which means that the cost of an accounting degree is not 1 million dollars.
Example B: In Week 88, I ran a hypothesis test to determine if the 30-year ROI of an accounting degree was 5 million dollars. My null hypothesis was that the 30-year ROI of an accounting degree was 5 million dollars. The results of the test indicated that I should fail to reject the null hypothesis which means that the 30-year ROI of an accounting degree is 5 million dollars.
Now, you try it for the hypothesis test you did in #3. Use the template to show what happened in this test.
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The Excel file contains all graphs, equations and computations found using Excel. The Word file provides the explanations and results.
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For each of the two majors:
1. Create a scatter diagram of Y = 'Annual % ROI' against X = 'Cost'. Include the trendline and the coefficient of determination right on the graph. See Week 1 hints for assistance.
2. Calculate the estimated 'Annual % ROI' when the 'Cost' (X) is $160,000. Show your work.
Business Major
y = -2E-07x + 0.118
y = -2E-07 * 160,000 + 0.118
y= -.0000002 * 160,000 + .118
y= .086
y= 8.6%
Engineering Major
y = -2E-07x + 0.1268
y = -2E-07 * 160,000 + 0.1268
y = -.0000002 * 160,000 + 0.1268
y = .0948
y = 9.48%
3. Conduct a full hypothesis test using the p value method: You will be in charge. Set your own logical significance level. State it. Claim: There is a relationship between cost and Annual %ROI. The hypotheses are given but you must also state them. Make sure all the steps of hypothesis testing are present. Revisit Week 6 if you are unsure. I would suggest following the template in Week 6 Assignment, #2.
• H0: β1 = 0
• Ha: β1 ≠ 0
The null hypothesis is H0: β1 = 0
The alternative hypothesis is Ha: β1 ≠ 0
I will use a t test statistic in my formula because this is a hypothesis test of the slope.
Business Major
n = 20
I will use significance level α = ...
Education
- MSc, California State Polytechnic University, Pomona
- MBA, University of California, Riverside
- BSc, California State Polytechnic University, Pomona
- BSc, California State Polytechnic University, Pomona
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