Calculation Of Regression For Estimation Of Sales


Data for corporate profits (P) and sales (S) for the manufacturing sector for the period

1970-2005 are stored in file sales.wf1.

a. Find least-squares estimates of β1 and β2 in the model

P = β1 + β2S + e

Report and comment on the estimated equation.

b. Draw a histogram of the residuals. Test for the normality of the error terms.

c. Use the Durbin-Watson test to test for positively-correlated first-order autoregressive errors. (Use a 5% significance level.)

d. Re-estimate the model assuming the existence of AR(1) errors. Report the results. Does ignoring the existence of AR(1) errors produce misleading inferences about β1

and β2?

e. Forecast profits for 2006 and 2007 assuming sales in these periods are 2400 and 2500, respectively. Find two sets of forecasts, one that assumes the errors do not follow an AR(1) process, and one that assumes that they do.



The question belongs to Statistics and it discusses about calculation of regression for estimation of sales.

Total Word Count 322

Download Full Solution


  • HWA

    this is a very good website

  • HWA

    I have 50 questions for the same test your page is showing only 28

  • HWA

    hi can you please help or guide me to answer my assignments. thanks

  • HWA

    hi can anyone help or guide me to my assignments. thanks

  • HWA

  • HWA

    This solution is perfect ...thanks

  • HWA

    Hello Allison,I love the 2nd image that you did! I also, had never heard of SumoPaint, is something that I will have to exolpre a bit! I understand completely the 52 (or so) youtube videos that you probably watched. Sometimes they have what you want, sometimes they don't! However, it is always satisfying when you are able to produce something that you have taught yourself. Great job!Debra 0 likes

  • HWA

    Perfect bank of solution. 

  • HWA

    great !

  • HWA
    Paul Brandon-Fritzius

    thanks for the quick response. the solution looks good. :)

  • HWA
    tina Johnson

    thnx for the answer. it was perfect. just the way i wanted it. 

  • HWA

    works fine.