McMahon and Tate advertising company is interested in an appropriate mix of print, radio, and television ads for their new client
Darrin Stevens performs a multiple regression on the effects of dollars spent on each type of media on dollars of sales of product. Darrin uses data from the most recent advertising campaigns and develops the following equation:
y = 254,215 + 6.79 × Print - 1.4 × Radio + 16.87 × Television
The r-squared statistic is 0.77. Which of the following statements is best?
A) At a minimum, the client will sell $254,215 worth of product after the new advertising campaign.
B) At a maximum, the client will sell $254,215 worth of product after the new advertising campaign.
C) This equation will be of no use in predicting the amount of sales based on advertising in these media.
D) The client should spend more money on television advertising than on radio advertising.
Answer: D
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