Consider the following to answer the question(s) below:
A Toronto accounting firm estimated a model to explain variation in client profitability. The dependent variable is client net profits and the predictor variables include the hours spent working on the client and indicator variables to denote the type of client-manufacturing, service, or government. The indicator variables have a value of one if the client is the type described. The following are the model results.
-If the number of hours spent on a client is 100, and the client is in the Service industry, what is the predicted net profit?
A) The predicted net profit is $3,569.55.
B) The predicted net profit is $1,869.81.
C) The predicted net profit is $1,283.55.
D) The predicted net profit is $4,172.08.
E) The predicted net profit is $3,585.82.

Question

Consider the following to answer the question(s) below:
A Toronto accounting firm estimated a model to explain variation in client profitability. The dependent variable is client net profits and the predictor variables include the hours spent working on the client and indicator variables to denote the type of client-manufacturing, service, or government. The indicator variables have a value of one if the client is the type described. The following are the model results. 
-If the number of hours spent on a client is 100, and the client is in the Service industry, what is the predicted net profit?
A) The predicted net profit is $3,569.55. 
B) The predicted net profit is $1,869.81. 
C) The predicted net profit is $1,283.55. 
D) The predicted net profit is $4,172.08. 
E) The predicted net profit is $3,585.82.

Quizplus · Accepted Answer

The predicted net profit for 100 hours spent on a client in the Service industry is $3,569.55.

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