The regression equation NetIncome = 2,159 + 0.0312 Revenue was estimated from a
ID: 2799730 • Letter: T
Question
The regression equation NetIncome = 2,159 + 0.0312 Revenue was estimated from a sample of 100 leading world companies (variables are in millions of dollars).
Calculate the residual for the x, y pair ($45,533, $2,697). (A negative value should be indicated by a minus sign. Round your answer to 4 decimal places.)
Calculate the residual for the x, y pair ($60,417, $3,497).(A negative value should be indicated by a minus sign. Round your answer to 4 decimal places.)
The regression equation NetIncome = 2,159 + 0.0312 Revenue was estimated from a sample of 100 leading world companies (variables are in millions of dollars).
Explanation / Answer
a 1)
Net Income = 2,159 + 0.0312* Revenue
for the x, y pair ($45,533, $2,697)
=(0.0312*45,533)+2159= 3579.6296
Residual = 3579.63-2697=+882.6296
a2) Since residual is positive, regression equation overestimated the net income
b1) for the x, y pair ($60,417, $3,497)
NI=$4044.0104
Residual=$547.0104