Please answer the following set of questions, based on the information provided
ID: 3261302 • Letter: P
Question
Please answer the following set of questions, based on the information provided below. An IT consulting company would like to investigate how the headcount, revenue and industry type of one company predict its IT budget. They collect the following data from 20 companies out of their clients: The IT budget The headcount . The revenue The industry type: manufacturing, retail, or high technology. An analysist in the IT consulting company creates two dummy variables to represent whether a company belongs to the manufacturing industry and retail industry, respectively. She runs a multiple regression model to test the effect of headcount, revenue, and industry type on IT budget. Parts of the raw data and the regression output are given below. Company ID IT Budget (S Million) Headcount Revenue (S Billion) Manufacturing Retail 2,118.69 220,000 57,280 245.4 539,000 13.9 514,707 207.75 51,043 47.6294 27.12 13.08 27.68 10.591 0 694.91 0 0 0 0 0 SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square 0.447928085 Standard Error 1,058.238094 Observations 0.751101692 20Explanation / Answer
20) from above option B is correct 4.85
21)option B; 3.06
22)t stat =-1324.33/662.37=-2.00 ; option C
23)R2 =SSR/SST =0.564 ; option B
24)
predicted IT budget =1522.68-0.0021*10000+22.023*10=1721.92 option E
25)as p value for revenue is less then 0.05 ; therefore option A
Source DF SS MS F significance F regression 4 21743137.3600 5435784.3400 4.854 3.0556 Residual error 15 16798017.9600 1119867.8640 Total 19 38541155.3200