TABLE 17-1 A Real Estate Builder Wishes to Determine How House Size

question 175

Multiple Choice

TABLE 17-1
A real estate builder wishes to determine how house size (House) is influenced by family income (Income) ,family size (Size) ,and education of the head of household (School) .House size is measured in hundreds of square feet,income is measured in thousands of dollars,and education is in years.The builder randomly selected 50 families and ran the multiple regression.Microsoft Excel output is provided below:
-Referring to Table 17-1,what minimum annual income would an individual with a family size of 4 and 16 years of education need to attain a predicted 10,000 square foot home (House = 100) ?

• A)$44.14 thousand
• B)$56.75 thousand
• C)$178.33 thousand
• D)$211.85 thousand

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Definitions:

NPV Calculation

The process of determining the Net Present Value of a series of cash flows by discounting them to their present value using a specific rate.

Interest Charges

Costs incurred for borrowing money, calculated as a percentage of the principal amount over a given period.

Project

A planned set of interrelated tasks to be executed over a fixed period and within certain cost and other limitations.

Selling Price

The amount of money for which a product or service is sold to the customer.