(A) Regression analysis - Show all work
1. Run a regression of profits on assets and sales and interpret your result. You can use excel
2. By using dummy variable approach, compare the effect of Japaneseââ?¬â?¢s assets and sales on profits with that of the United States.
3. Use alpha equal to 10%, please indicate your null and alternative hypothesis
**Note: Should not be more than 2 pages (single space)
1. Run a regression of profits on assets and sales and interpret your result. You can use excel.
Coefficients Standard Error t Stat P-value
Intercept 1035.986 315.4844 3.283795 0.001938
Sale -0.00286 0.003633 -0.78726 0.435083
Assets 0.000183 0.000784 0.233594 0.816315
The estimated regression model is
Profit =1035.986 -0.00286*Sales +0.000183*Assets
The regression coefficients can be interpreted as
- For a unit increase in sales the Profits decrease by ...
Step by step method for regression analysis is discussed here. Regression coefficients, coefficient of determination, scatter diagram and significance of regression model are explained in the solution.