The Manager of a Commuter Rail Transportation System Is Asked

question 69

Essay

The manager of a commuter rail transportation system is asked by his governing board to predict the demand for rides in the large city served by the transportation network. The system manager has collected data on variables thought to be related to the number of weekly riders on the city's rail system. The table shown below contains these data. The variables "weekly riders" and "population" are measured in thousands, and the variables "price per ride", "income", and "parking rate" are measured in dollars.
-(A) Estimate a multiple regression model using all of the available explanatory variables.
​
(B) Conduct and interpret the result of an F- test on the given model. Employ a 5% level of significance in conducting this statistical hypothesis test.
​
(C) Is there evidence of autocorrelated residuals in this model? Explain why or why not.

---

Definitions:

Retained Earnings

Profits that a company retains rather than distributes to its shareholders as dividends, often used for reinvestment.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the loss of value over time.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenue.

Financial Statements

Reports that summarize the financial health, performance, and liquidity of a company including balance sheet, income statement, and statement of cash flows.