Instruction 13 ANOVA Note: Adj R Square = Adjusted R Square; Std

question 115

Multiple Choice

Instruction 13.27
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 metres, 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:
OUTPUT
SUMMARY
Regression Statistics
$\begin{array} { l l } \text { Multiple R } & 0.865 \\ \text { R Square } & 0.748 \\ \text { Adj. R Square } & 0.726 \\ \text { Std. Error } & 5.195 \\ \text { Observations } & 50 \end{array}$

ANOVA
$\begin{array} { l l l l l l } & d f & \text { SS } & \text { MS } & F & \text { Signiff } \\ \text { Regression } & & 3605.7736 & 901.4434 & & 0.0001 \\ \text { Residual } & & 1214.2264 & 26.9828 & & \\ \text { Total } & 49 & 4820.0000 & & & \\ & & & & & \\ & \text { Coeff } & \text { StdError } & t \text { Stat } & p \text { value } & \\ \text { Intercept } & - 1.6335 & 5.8078 & - 0.281 & 0.7798 & \\ \text { Income } & 0.4485 & 0.1137 & 3.9545 & 0.0003 & \\ \text { Size } & 4.2615 & 0.8062 & 5.286 & 0.0001 & \\ \text { School } & - 0.6517 & 0.4319 & - 1.509 & 0.1383 & \end{array}$ Note: Adj. R Square = Adjusted R Square; Std. Error = Standard Error
-Referring to Instruction 13.27,one individual in the sample had an annual income of $10,000,a family size of 1 and an education of 8 years.This individual owned a home with an area of 1,000 square metre (House = 10.00) .What is the residual (in hundreds of square metre) for this data point?

• A) 8.10
• B) -8.10
• C) 5.40
• D) -5.40

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Definitions:

Operating Cash Flow

An accounting measure representing the money generated from a company's daily business operations, indicating its ability to generate cash from sales.

Fixed Costs

Fixed Costs are business expenses that remain unchanged regardless of the level of production or sales activity, such as rent, salaries, and insurance premiums.

Fixed Costs

Expenses that remain constant regardless of the amount of goods produced or sold, including lease payments, wage expenses, and insurance fees.