Regression equations are created by modeling data, such as the following: Profit = (Cost Per Item × Number of Items) –...

Regression equations are created by modeling data, such as the following: Profit = (Cost Per Item × Number of Items) – Constant Charges In this equation, constant charges may be rent, salaries, or other fixed costs. This includes anything that you have to pay for periodically as a business owner. This value is negative because this cost must be paid each period and must be paid whether you make a sale or not. Your company may wish to release a new e-reader device. Based on data collected from various sources, your company has come up with the following regression equation for the profit of the new e-reader: Profit = $0.15 × number of e-readers sold – $28 Or, assuming x = the number of e-readers sold, this would be the same regression equation: Profit = 0.15x – 28 In this case, the values are given in thousands (i.e., the cost of making an individual e-reader will be $150 [0.15 × 1,000], with $28,000 [28 * 1,000] in constant charges).