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# Regression analysis

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(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)

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#### Solution Preview

Regression Analysis

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 ...

#### Solution Summary

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.

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