Why are the re expressed data better for regression

Assignment Help Basic Statistics

Reference no: EM131401686

Profit. How are a company s profits related to its sales? Let s examine data from 71 large U.S. corporations. All amounts are in millions of dollars.

a) Here are histograms of Profits and Sales and histograms of the logarithms of Profits and Sales. Why are the re-expressed data better for regression?

676_Graph 1.jpg

b) Here are the scatterplot and residuals plot for the regression of logarithm of Profits vs. log of Sales. Do you think this model is appropriate? Explain.

710_Graph 2.jpg

c) Here's the regression analysis. Write the equation.

Dependent variable is: Log Profit

R-squared = 48.1%

Variable Coefficient

Intercept -0.106259

LogSales 0.647798

d) Use your equation to estimate profits earned by a company with sales of 2.5 billion dollars. (That's 2500 million.)

Reference no: EM131401686

Questions Cloud

Summary - the fundamentals of electricity : Write a 2 pages summary for the attached slides. Executive Master in Energy and Resources - The Fundamentals of Electricity The physical constraint

Essay detailing the fraudulent or illegal activities : Provide a full essay detailing the fraudulent or illegal activities that were committed. Include background on the company culture as well as background on the major players in the fraud.

What you have learned about fossil evidence : Provide a 100-250 word argument for or against the idea that past events will be a predictor of future tsunamis based on what you have learned about fossil evidence.

What would the lorenz curve for lawyers represent : Why are we concerned with the distribution of income between whites and blacks, but not between redheads and blondes?

Why are the re expressed data better for regression : Here are histograms of Profits and Sales and histograms of the logarithms of Profits and Sales. Why are the re-expressed data better for regression?

Demonstrate the growth : Demonstrate the growth of a $250 monthly contribution for 40 years earning 9 percent APR. (LG5-2) Use an on line savings calculator to help you get this amount.

What role does technology play in a leadership role : What role does technology play in a leadership role?How can a leader use technology to communicate the organization's mission and other important information regarding the organization?What are some pros and cons of a leader using technology?

What kind of conflict do you think this practice leads to : Several large companies dismiss each year the five percent of their workforce receiving the lowest performance evaluation. What kind of conflict do you think this practice leads to? In your opinion, how does this affect performance and teamwork?

Identify the key elements of an appropriate e-commerce : you will be developing a comprehensive e-commerce implementation plan document and writing some code to demonstrate key elements of an e-commerce Web site. Your first task in this process will be to select an organization to use as the basis of yo..

User Account

All Pages