A Local Tire Dealer Wants to Predict the Number of Tires

question 72

Short Answer

A local tire dealer wants to predict the number of tires sold each month. He believes that the number of tires sold is a linear function of the amount of money invested in advertising. He randomly selects 6 months of data consisting of tire sales (in thousands of tires) and advertising expenditures (in thousands of dollars). Based on the data set with 6 observations, the simple linear regression model yielded the following results.
∑X = 24
∑X² = 124
∑Y = 42
∑Y² = 338
∑XY = 196
Calculate the coefficient of determination.

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Definitions:

Asset Surrendered

A situation or transaction where an asset is given up by its owner, which could be due to sale, exchange, forfeiture, or similar circumstances.

Undepreciated Cost

Undepreciated cost refers to the original cost of an asset minus any depreciation that has been claimed to date, reflecting its current book value.

Business Automobile

A vehicle owned and used by a company for business operations or activities.

Market Value

The current price at which an asset or service can be bought or sold, determined by supply and demand dynamics in open markets.