A microeconomist wants to determine how corporate sales are influenced by capital and wage spending by companies. She proceeds to randomly select 26 large corporations and record information in millions of dollars. The Microsoft Excel output below shows results of this multiple regression. SUMMARY OUTPUT

Regression Statistics

Multiple R 0.830

R Square 0.689

Adjusted R Square 0.662

Standard Error 17501.643

Observations 26

ANOVA

df SS MS F Signif F

Regression 2 15579777040 7789888520 25.432 0.0001

Residual 23 7045072780 306307512

Total 25 22624849820

Coeff StdError t Stat P-value

Intercept 15800.0000 6038.2999 2.617 0.0154

Capital 0.1245 0.2045 0.609 0.5485

Wages 7.0762 1.4729 4.804 0.0001

Please analyze in detail the regression outcome, what conclusions you can make? Discuss and explain.

answer: c, the green line

step-by-step explanation:

there is no black line, eliminate b.

simple interest implies periodic payments, but the red line shows no payments, eliminate d.

simple interest has equal payments. if paid say every day, the graph is about a straight line (actually a stairstep).

the yellow line is not straight, eliminate a.

check: the green line is straight, answer is c.

simple interest with positive interest rate gives a straight line sloping up to the right. green line:

g(t) = $100 + ($200-$100) ÷ (20 years) × (t years)

= $100 + (4%/year) × ($100)(t years)

incidentally, the yellow line curving upward represents continuously compounded interest

y = $100 × 2^(t years / (14 assuming the yellow line hits $200 at 14 years. 2^0 is 1, so y(0) = $100; 2^(14/14) is 2, so y(14) = $200.

the final amount you will pay is $68.04.

the tip is determined by the pre-tax amount, so we calculate the tip based on the original bill, not after we've added sales tax.

to find the tip:

we can divide 54.00 by 100 to get 1% of 54. then we multiply that by 18.

54 / 100 = .54

.54 x 18 = 9.72

tip = 9.72$

to find the tax:

we can divide 54.00 by 100 to get 1% of 54. then we can multiply that by 8 to get 8%.

54 / 100 = .54

.54 x 8 = 4.32

tax= 4.32

now we can add the tip and tax to the bill to get our total.

54 + 9.72 + 4.32 = 68.04

total: $68.04

step-by-step explanation: