The owner of Showtime Movie Theaters, Inc., would like to predict weekly gross revenue as a function of advertising expenditures. Historical data for a sample of eight weeks follow.
Weekly
Gross
Revenue
($1,000s) Television
Advertising
($1,000s) Newspaper
Advertising
($1,000s)
96 5.0 1.5
90 2.0 2.0
95 4.0 1.5
92 2.5 2.5
95 3.0 3.3
94 3.5 2.3
94 2.5 4.2
94 3.0 2.5
The owner then used multiple regression analysis to predict gross revenue (y), in thousands of dollars, as a function of television advertising (x1), in thousands of dollars, and newspaper advertising (x2), in thousands of dollars. The estimated regression equation was
Å· = 83.2 + 2.29x1 + 1.30x2.
(a) What is the gross revenue (in dollars) expected for a week when $4,000 is spent on television advertising (x1 = 4) and $1,500 is spent on newspaper advertising (x2 = 1.5)? (Round your answer to the nearest dollar.)
$_____
(b) Provide a 95% confidence interval (in dollars) for the mean revenue of all weeks with the expenditures listed in part (a). (Round your answers to the nearest dollar.)
$_____ to $ _____
c) Provide a 95% prediction interval (in dollars) for next week's revenue, assuming that the advertising expenditures will be allocated as in part (a). (Round your answers to the nearest dollar.)
$_____ to $_____