A Local Grocery Store Wants to Predict the Daily Sales

question 142

Multiple Choice

A local grocery store wants to predict the daily sales in dollars. The manager believes that the amount of newspaper advertising significantly affects the store sales. The manager randomly selects 7 days of data consisting of daily grocery store sales (in thousands of dollars) and advertising expenditures (in thousands of dollars) . The Excel/Mega-Stat output given below summarizes the results of fitting a simple linear regression model using this data.
Regression Analysis
$\begin{array}{rc}\mathrm{r}^{2} 0.762 & \mathrm{n} 7 \\\mathrm{R} 0.873 & \mathrm{k} \text { 1 } \\\text { Std. Error 11.547 } & \text { Dep. Var. Sales }\end{array}$
ANOVA
table
$\begin{array}{rrrrrr}\hline \text { Source } & S S & d f & M S & F & p \text {-value } \\\hline \text { Regression } & 2,133.3333 & 1 & 2,133.3333 & 16.00 & .0103 \\\text { Residual } & 666.6667 & 5 & 133.3333 & & \\\hline \text { Total } & 2,800.0000 & 6 & & &\\\hline\end{array}$

$\text { Regression output }$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Confidence interval }$
$\begin{array}{rrrrrrrr}\hline\text { Variables} & \text { Coefficients } & \text { std. error } & t(d f=5) & \text { p-value } & 95 \% &95 \% \text { upper } \\& & & & & \text { lower } & \\\hline \text { Intercep } & 63.3333 & 7.9682 & 7.948 & .0005 & 42.8505 & 83.8162 \\\text { Advertising } & 6.6667 & 1.6667 & 4.000 & .0103 & &\end{array}$
-At a significance level of 0.05,use an F test to test the significance of the slope and state your conclusion.

• A)We reject H₀and conclude there is sufficient evidence that dollars spent on advertising is a significant linear predictor of the grocery store sales.
• B)We failed to reject H₀and conclude there is not sufficient evidence that dollars spent on advertising is a significant linear predictor of the grocery store sales.
• C)We failed to reject H₀and conclude there is sufficient evidence that dollars spent on advertising is a significant linear predictor of the grocery store sales.
• D)We fail to reject H₀and conclude that there is sufficient evidence that grocery store sales in dollars is a significant linear predictor of the dollars spent on advertising.
• E)We reject H₀and conclude that there is not sufficient evidence that dollars spent on advertising is a significant linear predictor of the grocery store sales.

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Definitions:

Identifiable Intangible

An intangible asset that can be separated from the company and sold, transferred, or licensed.

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Reliable Measurement

The degree to which information is consistently accurate and dependable, providing a true representation of a financial situation.

Original Investigation

A detailed study or research conducted for the first time to gain new knowledge or insights.