A regression analysis between sales (in $1000)and advertising (in $100)resulted in the following least squares line: = 84 +7X.This implies that if advertising is $800,then the predicted amount of sales (in dollars)is $140,000.

Question

A regression analysis between sales (in $1000)and advertising (in $100)resulted in the following least squares line:  = 84 +7X.This implies that if advertising is $800,then the predicted amount of sales (in dollars)is $140,000.

Quizplus · Accepted Answer

To find out if the statement is true or false, we need to substitute the given value of advertising ($800) into the equation of the least squares line:

Sales = 84 + 7(800)
Sales = 84 + 5600
Sales = 5684

However, the question specifies that the sales are in $1000, so we need to divide the result by 1000:

Sales = 5.684

Therefore, if advertising is $800, the predicted amount of sales is $5,684 thousand, which is equivalent to $140,000. Therefore, the statement is true.

A Regression Analysis Between Sales (In $1000)and Advertising (In $100)resulted