The Manager of a Fast Food Restaurant Wants to Determine

question 4

Essay

The manager of a fast food restaurant wants to determine how sales in a given week are related to the number of discount vouchers (#) printed in the local newspaper during the week. The number of vouchers and sales ($000s) from 10 randomly selected weeks is given below with the predicted sales.
Calculate the residuals. $$\begin{array} { | c | c | c | } \hline \text { Observation } & \text { Sales } & \text { Predicted Sales } \\\hline 1 & 12.8 & 13.4147 \\\hline 2 & 15.4 & 14.8000 \\\hline 3 & 13.9 & 13.8765 \\\hline 4 & 11.2 & 12.9529 \\\hline 5 & 18.7 & 20.3412 \\\hline 6 & 17.9 & 16.1853 \\\hline 7 & 16.8 & 15.2618 \\\hline 8 & 15.9 & 14.3382 \\\hline 9 & 11.5 & 12.9529 \\\hline 10 & 13.9 & 13.8765 \\\hline\end{array}$$

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Definitions:

Conscious Factor

Aspects of an individual’s psychological function that are within their immediate awareness and perception.

Unconscious Factor

Elements of thought and motivation that reside outside the conscious awareness but influence behavior and decisions.

Net Capital Loss

The financial loss that occurs when the total capital losses from investments exceed the total capital gains in a fiscal year.

Carry Back

A tax provision that allows a business to apply current year net operating losses to past tax years to receive a tax refund for previously paid taxes.