# I. Regression Analysis (Excel) 1. Steve Douglas has been hired as a m.docx

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I. Regression Analysis (Excel) 1. Steve Douglas has been hired as a management trainee by a large brokerage firm. As his first project, he is asked to study the gross profit of firms in the chemical industry. What factors affect profitability in that industry? Steve selects a random sample of 16 firms and obtains data on the number of employees, number of consecutive common stock dividends paid, the total value of inventory at the start of the current year, and the gross profit for each firm. His findings are as follows: Gross Profit (\$000), y Number of Employees Consecutive Dividends, Beginning Inventory (\$000), X3 \$2800 \$1800 1300 320 920 1230 1600 96 4500 3600 5700 8450 3250 598 640 870 3470 5550 6700 810 9875 3700 120 440 6500 6440 590 9130 1280 1200 440 280 4160 1890 3870 650 1200 980 250 1300 Determine the regression equation. The Master Chemical Company employs 220 people, has paid 64 consecutive common stock dividends, and has an inventory valued at \$1 500 000 at the start of the year. What is the estimate of the gross profit?

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