# Explaning results by the simple linear regression

A linear regression analysis produced the equation: Profits = - $950 + $85 * no. of development hours

a) How large would the profits or losses be if no time is spent in development?

b) On average, an extra 20 hours spent in development produces what increase in profits?

c) What is the break-even point - the number of hours for which the estimated profits would be zero?

d) If the correlation is r = 0.33, what percentage of the variation in profits is explained by the time spent?

e) How much of the variation in profits is left unexplained by the number of hours spent?

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Simple Linear Regression

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A linear regression analysis produced the equation: Profits = - $950 + $85 * no. of development hours

Denote the no. of development hours by X; denote the Profits by Y. Then a linear regression equation is

Y=-950+85X

a) How large would the profits or losses be if no time is spent in ...

#### Solution Summary

The solution contains detailed explanation of results by the simple linear regression method.