Reading 11- LOS F (Part 1): : Q2 number, dollars, industry, following, television

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2.Paul Frank is an analyst for the retail industry. He is examining the role of television viewing by teenagers on the sales of accessory stores. He gathered data and estimated the following regression of sales (in millions of dollars) on the number of hours watched by teenagers (TV, in hours per week):

Sales_t = 1.05 + 1.6 TV_t

The predicted sales if television watching is 5 hours per week is:

A)   $9.05 million.

B)   $8.00 million.

C)   $2.65 million.

D)   $1.05 million.

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The correct answer was A)

The predicted sales are: Sales = $1.05 + [$1.6 (5)] = $1.05 + $8.00 = $9.05 million.