Private Endowment Annual Budget Ranking 2.5 8.1 87 52.0 26.0 20 12.7 7.5 122 63.0 33.0 32 46.0 12.0 54 27.1 16.1 76 23.3 17.0 103 46.4 14.9 40 48.9 21.8 98
The Dean of the College of Business at State University has
initiated a fund raising campaign. One of the selling points
she plans to use with potential donors is that increasing the
college’s private endowment will improve its ranking among
business schools as published in various news magazines.
She would like to demonstrate that there is a relationship
between funding and the rankings. She has collected the
following data showing the private endowments ($ millions),
and annual budgets ($ millions) from state and private
sources, for eight of State’s peer institutions plus State, and
the ranking of each school.
Use Excel to develop a linear regression model for the
amount of the private endowment and the ranking, and
forecast a ranking for a private endowment of $70 mil-
lion. Does there appear to be a strong relationship
between the endowment and ranking?
b. Using Excel, develop a multiple regression equation for
all of these data including private endowment and
annual budget, and forecast a ranking for a private
endowment of $70 million and an annual budget of
$40 million. How does this forecast compare to the
forecast in part (a)?
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