Please answer the two questions below. Thanks! 1) Pam's Stables used two different independent variables (trainer hours and number of horses) in two different equations to evaluate the cost of training horses. The most recent results of the two regressions are as follows: Trainer's hours: Variable Coefficient Standard Error t-Value Constant $913.32 $198.12 4.61 Independent Variable $20.90 $ 2.94 2.11 r2 = 0.56 Number of horses: Variable Coefficient Standard Error t-Value Constant $4,764.50 $1,073.09 4.44 Independent Variable $864.98 $ 247.14 3.50 r2 = 0.82 Using the more reliable cost driver, what is the estimated total cost for the coming year if 16,000 trainer hours are incurred and the stable has 400 horses to be trained? In other words, use the regression results that you believe are more reliable to estimate the total cost for the year 2) Referring to the question above, what statistics did you rely on in choosing the more reliable regression estimates and why?
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
Please answer the two questions below. Thanks!
1) Pam's Stables used two different independent variables (trainer hours and number of horses) in two different equations to evaluate the cost of training horses. The most recent results of the two regressions are as follows:
Trainer's hours:
Variable Coefficient Standard Error t-Value
Constant $913.32 $198.12 4.61
Independent Variable $20.90 $ 2.94 2.11
r2 = 0.56
Number of horses:
Variable Coefficient Standard Error t-Value
Constant $4,764.50 $1,073.09 4.44
Independent Variable $864.98 $ 247.14 3.50
r2 = 0.82
Using the more reliable cost driver, what is the estimated total cost for the coming year if 16,000 trainer hours are incurred and the stable has 400 horses to be trained? In other words, use the regression results that you believe are more reliable to estimate the total cost for the year
2) Referring to the question above, what statistics did you rely on in choosing the more reliable regression estimates and why?
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