For Exercises 34–39, apply the Strategy for Building a Multiple Regression Model by performing the following steps, using level of significance :

  1. Step 1 Perform the test for significance of the overall regression.
  2. Step 2 Perform the tests for the individual predictors. If at least one of the predictors is not significant, then eliminate the variable with the largest -value from the model. Repeat Step 2 until all remaining predictors are significant.
  3. Step 3 Verify the assumptions.
  4. Step 4 Report and interpret your final model. Report and interpret the coefficients, the standard error of the estimate , and the adjusted coefficient of determination .

Question 13.140

accounting

38. Regression in Accounting. We are interested in estimating using , , and . Use the data in Table 10, containing a random sample of large technology companies in 2010. Total assets and total liabilities are in billions of dollars.

Table 13.46: TABLE 10 Accounting data for large technology companies
Company Current
ratio		 Price–earnings
ratio		 Assets Liabilities
Microsoft 1.82 12.51 77.9 38.3
Intel 2.79 18.44 53.1 11.4
Dell 1.28 10.95 33.7 28.0
Apple 1.88 24.57 53.9 26.0
Google 10.62 18.87 40.5 4.5
Table 13.46: Source: Lexis-Nexis.
  1. Build the final multiple regression model using level of significance .
  2. Comment on your results from (a).
  3. Redo your work from (a), this time using level of significance .
  4. Report and interpret your final model from (c).