As part of an investment firm, you have been asked to researchpotential companies for the firm to invest in. Specifically, youare interested are interested in identifying the factors thatinfluence a company’s earnings before taxes. You hypothesize that afirm’s current assets, current liabilities, and amount the firmpays in interest on its loans all might play a role in predicting acompany’s earnings before taxes. Therefore, you collect data on allof the variables from several different companies.

Use this data to estimate the following model and answer each ofthe questions below.

EBT= ?0+?1TotAssets+ ?2 TotLiabilities+ ?3 InterestExpense+?

Variable Descriptions:

EBT: A firm’s total reported earnings before taxes measured inmillions of dollars

Tot Assets: A firm’s total current assets measured in millionsof dollars

Tot Liabilities: A firm’s total current liabilities measured inmillions of dollars

Interest Expense: A firm’s total expense on interest paid onloans measured in millions of dollars

For this question, you will need to download the Stock Data andthen use the data analysis tool pack in Excel to run a regression.Note, you will need to install the data analysis tool pack on yourcomputer. How to do this differs based on the type of computer youare using, but instructions can be found on google for both Mac andPC. Estimate the sample regression equation above and fill in theestimated coefficients. Round the coefficient estimates to 4decimals.

https://arizona.grtep.com/core/uploadfiles/components/282919/files/Stock%20Data.xlsx(Stock Data)

EBTˆ=_____+_____TotAssets+____TotLiabilities+____InterestExpense

Predict the earnings before taxes for a company with 1.5 billiondollars in assets, 900 million dollars in liabilities, and 80million dollars in interest expenses. Make sure to use the roundedcoefficients when making the prediction. Round your finalanswer to 4 decimals. Hint, make sure you payattention to the units!