Chapter A.3, Problem 64E

Advertising and Sales. Refer to Exercise A.43 on page A-14 regarding the household-appliance manufacturer that wants to analyze the relationship between total sales and the company’s expenditures on three primary means of advertising (television, magazines, and radio). Use Output A.5 on page A-15 to help answer the following questions.

1. a. Explain what it would mean for the assumptions for multiple linear regression inferences to be satisfied with television, magazine, and radio advertising expenditures as predictor variables for sales.
2. b. Use the computer output to obtain the coefficient of determination, R². Interpret your result.
3. c. Determine and interpret the standard error of the estimate, s_e.
4. d. At the 5% significance level, do the data provide sufficient evidence to conclude that, taken together, television, magazine, and radio advertising expenditures are useful for predicting sales?